If you weren’t already aware, this is the biggest change to billing that Microsoft have introduced in the history of their 365 product, and the first time they have ever increased the price.
Bottom line, you will be paying a few quid more for your Microsoft 365 services, however there are steps you can take to minimise the cost increase.
Let’s be clear, at Computercentric, we’re as thrilled about this announcement as you are. In all honesty, we’re kind of OK with the small price rise. Microsoft have added massive amounts of functionality to the Microsoft 365 platform over the last few years, so we feel the price rise is reasonable.
However Microsoft are also encouraging customers to move from a purely monthly billing model, where you can even licence services for a couple of days at a time, to an annual model, where you are incentivised to commit to an annual licence, at a reduced price. This move we don’t like. We know that our customers like flexibility, and we know they don’t like being lured into an annual contract, when the monthly model has been working fine until now. Regardless, it’s coming, so we have to deal with it, and help our customers deal with it.
The price rise will affect the following popular services:
Microsoft 365 Business Basic
Microsoft 365 Business Premium
In addition to the above, the update will affect Office 365 E1, Office 365 E3, Office 365 E5 and Microsoft 365 E3.
As we understand it, Microsoft Business Standard, which is our most popular 365 Service, is NOT affected, although I would not be surprised if this changes in the near future. We also understand that charity and not-for-profit licences will not be affected too.
These changes will be effective from 1st March 2022.
The monthly price for the above services will increase by 20% from 1st March.
The price rise is coming alongside a move to how Microsoft sells its services, In typical marketing style, this called the “New Commerce Experience”.
Essentially, this represents an effort to encourage customers to move from flexible monthly pro-rated billing, to an annual commitment.
If you choose to commit to an annual agreement, there is a discount available to you which will go some way to offset the price increase.
You will be able to have a mix of licences, for example you can keep a “core” of licences on a 12 month term, and have a smaller pool of licences on flexible monthly billing, at a higher price, which can be removed or added at any time to suit changes in staffing numbers.
If you choose to switch some or all of your licences to an annual agreement, not only will you benefit from a discounted price, you will also be able to lock in the current pricing, before the price rise on 1st March. This way you can effectively postpone the price rise for 12 months. Depending on your quantities and types of licences, this could actually result in a net price reduction in your 365 costs for the next 12 months.
Note this is an annual agreement, however you can still pay monthly, with no additional cost. You can ADD licences to the annual agreement at any time, but you cannot REMOVE them until the 12 month agreement renewal date.
How will this affect me?!
The answer depends on how many of the different licence types you have in use. If you’re a Computercentric customer, we recommend you look at your monthly invoice, or give us a call, to confirm what licences you have in use.
- If you have Microsoft 365 Business Standard, you will not see a change in pricing to these products. However you can choose to move to an annual billing model and you will make a small saving.
- If you have Educational or Charity licences, you will not see a change in pricing to the products.
- If you have Microsoft 365 Business Basic or Business Premium (or E1, E3 or E5) licences, then you have two options:
- If you do nothing, your subscription will continue as normal, however you will be billed for these licences at the higher price.
- Our recommendation, is that you contact us, and we split your licences into a pool of annual and monthly licences. This way you will retain the flexibility of having a number of licences that you pay for month-to-month, to cater for changes in staff numbers. You will retain a core of licences on a cheaper annual subscription for the numbers that you know will not be changing over the course of the year.
- If you move a core of licences to annual agreements BEFORE 1st March 2022, the price you agree to on the annual agreement will be at the current lower price for 12 months, meaning you can “lock-in” the current pricing for a year, and effectively postpone the price rise.
The best solution for you will depend on your requirements, for that reason we encourage you to give us a call.
