How to Protect Your Business from Microsoft 365 Price Increase in March
Office 365 price increase, if you haven’t heard yet, Microsoft is raising prices for Microsoft 365 in March. This price increase will be the first major one since its launch. While there have been occasional UK price changes in the past, these were usually linked to fluctuations in currency markets. However, this upcoming adjustment looks set to be much more significant, reports suggest the increase could range from 20-40% based on recent figures released for the US market.
But this change is not just about price hikes. Microsoft is overhauling how it offers Microsoft 365 to businesses like yours, and understanding the ins and outs of this shift is crucial.
Why the Microsoft 365 Price Increase Is More Than Just a Cost Hike
For many businesses, Microsoft 365 is an essential tool, powering your day-to-day operations. Whether it’s Word, Excel, Teams, or OneDrive, Microsoft’s suite has become indispensable for productivity. However, with this price increase, you might be left wondering how this will impact your budget, especially if your organisation is already working within tight financial constraints.
Here’s the deal: Microsoft is not only raising prices, they are also changing the way they offer Microsoft 365. Previously, businesses could opt for a pay-as-you-go model, where you could adjust licenses as needed, such as downgrading when employees were placed on furlough. But this flexibility is disappearing, and with it comes a change in how your billing and subscription renewals will work.
What’s Changing with Microsoft 365 Pricing?
1. Monthly vs. Annual Subscriptions
Starting in March, you will face a choice between sticking with a monthly subscription or committing to a 12-month contract. Here’s a breakdown of how each option works:
- Monthly Subscriptions: These will remain available, but they will be subject to price increases.
- 12-Month Subscription Commitments: By committing to a 12-month agreement, you can lock in your price for the entire year. This option can provide more stability in your costs, but it comes with some important caveats.
While you’ll be locked into your current pricing for 12 months, you won’t be able to reduce licenses during that period if your business shrinks, such as in the case of staff reductions. This could be a problem if you experience unexpected changes in staffing levels, but at the same time, you can add more licenses as your business grows.
The Risks of Committing to a 12-Month Plan
While the 12-month contract can help lock in prices, there are some downsides you should consider:
- No License Reductions: If you experience a decrease in staff, you will still be required to pay for the number of licenses you initially signed up for until the end of your contract. This is a significant change, as businesses used to be able to adjust their licenses based on fluctuating staffing needs.
- Limited Change Window: Microsoft is allowing only a 72-hour window at your renewal to make changes to your subscription. This could catch businesses off guard, especially if the renewal period coincides with a bank holiday or a busy season. Missing this window could lock you into the same number of licenses for another year, regardless of any changes to your staff size.
How You Can Lock in Your Microsoft 365 Price Now
While the new pricing changes may feel like a heavy blow, there are still ways to protect your business and ensure you’re not paying more than necessary:
Act Early: Prepare for the Changes
We’ve been working closely with Microsoft for several months to understand these changes. As part of this effort, we’ve already updated our internal systems to alert our account managers five days before the renewal date. This proactive approach allows us to discuss any necessary changes with you before the 72-hour window starts, helping you avoid being locked into the wrong plan for another year.
Consider Committing to a 12-Month Plan
If you’re confident that your business will maintain or increase staffing levels, committing to a 12-month plan could offer a stable pricing structure, avoiding the upcoming price increase. However, if you anticipate a potential reduction in staff, you might want to wait until the last minute before committing to a new contract to assess your needs more accurately.
Stay Flexible with Your IT Provider
If your Microsoft 365 subscription is billed through an IT provider like us, you may be limited in your ability to transfer your license to another provider during the contract period. This makes it even more important to review your options carefully and work with a provider who can guide you through the transition smoothly.
Should You Act Now?
The upcoming Microsoft 365 price increase could be a game-changer for your business. Whether you’re sticking with the monthly plan or opting for the 12-month commitment, it’s important to carefully assess your needs and make sure you’re prepared for the changes that are coming.
Before making any decisions, we recommend having a conversation with your IT provider to discuss the best course of action for your business. At Commercial Networks, we’re ready to guide you through the transition and help you lock in the best pricing structure before the changes go into effect.
If you’d like to discuss the changes with Mat or Steve, feel free to schedule a Teams meeting with us at a time that suits you here.
