Tag: price

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Microsoft increase Cloud Services pricing inline with Global Pricing and FX

April 23 Price Increase

In what Microsoft call “price harmonisation”, it has been confirmed that Microsoft will be aligning the pricing of their Cloud products and services (for example Microsoft 365) by introducing consistent global pricing for its services across the globe. For many regions, such as the UK and EU, this means price rises as the dollar has continued to fall in recent years again the Euro and Pound.

What and why are prices changing?

Microsoft are aligning costs (like they do today with Azure) to US dollar FX rates which means that customers will have consistent pricing reflected by the exchange rate of the local currency to the US dollar (USD), which is reviewed twice a year.

While a price increase is never well received, it is worth noting that this latest increase relates to their commercial cloud products such as Microsoft 365. Azure is already priced by on regional FX rates and is not affected by this announcement. Microsoft are simply aligning their commercial pricing in line with their competition and their other cloud services.

Countries that use the Great British Pound (GBP), the Danish Krone (DKK), the Euro (EUR), the Norwegian Krone (NOK), and the Swedish Krona (SEK) will all see a price increase from April 1, 2023.

“In the future, Microsoft will assess pricing in local currency as part of a regular twice-a-year cadence, taking into consideration currency fluctuations relative to the USD.

This will provide increased transparency and predictability for customers globally and move to a pricing model that is most common in our industry.

The Microsoft Cloud continues to be priced competitively, and Microsoft remains deeply committed to the success of its customers and partners.”

Microsoft

How much are prices increasing by?

Microsoft has confirmed that the price increase for the following currencies will be:

  • GBP: +9%
  • DKK, EUR and NOK: +11%
  • SEK: +15%

Microsoft have said they are committed to continuing to invest in their cloud services to “enable customers to innovate, consolidate and eliminate operating costs”.

Thoughts and Actions

While a price increase is never well received, it is worth noting that this latest increase relates to their commercial cloud products such as Microsoft 365. Azure is already priced by on regional FX rates and is not affected by this announcement. Microsoft are simply aligning their commercial pricing in line with their competition and their other cloud services.

This therefore represents a good time for organisations to do some “house keeping” to keep licenses and costs in check. For example:

  • Check 3rd party duplicate products you can displace (and use the services included in your Microsoft 365 subscription)
  • Check if you need the tier of license you are using. Would Microsoft 365 E3 deliver what you need? Do you need the same licenses for everyone?
  • Ensure you leverage Fast Track services or your partner to help you adopt and get best value of your investment in Microsoft Cloud
  • Speak to your licensing provider or Cloud Solution Provider to ensure you get the best commercial costs
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Microsoft 365 E5 becomes more “cost efficient” as non E5 SKUs get first price increase in years..

Microsoft’s have annouced the first ‘substantive’ price increase for many of its commercial Office 365/Microsoft 365 subscription plans is coming in March 2022.

On March 1, 2022, Microsoft will be increasing prices for most of its commercial Office 365 and Microsoft 365 subscriptions with the exception of consumer, education and also Microsoft 365 E5, which will not be increased.

The increases will range from $12 per user per year more for Microsoft 365 Business Basic, to $48 per user per year more for Microsoft 365 E3. In some cases, Microsoft is increasing prices to match those of the competition (read, Google), officials said. In other cases, it is adjusting prices to reflect the considerable value added to the Office 365/Microsoft 365 suites over the past several years, they added.   

Microsoft have said in a blog post that since the introduction of Microsoft 365 four years ago, they has added 24 apps to their Office 365/Microsoft 365 suites, including Teams, Power Apps, Power BI, Power Automate, Stream, Planner, Visio, OneDrive, Yammer and Whiteboard as well as over 1,400 new features to its the core products across Microsoft 365 subscriptions over the past decade.

How much are the increases?

I’ve only seen the US$ pricing so far, but price increases range from $12 pupm for Microsoft 365 Business Basic, to $48 pupm for Microsoft 365 E3. In many cases the reason for these increases is to reflect the considerable amount of value added services added to the Office 365/Microsoft 365  over the past few years.

Microsoft 365 Business Basic up $1 to $6pupm

Microsoft 365 Business Premium up $2 to  $22 pupm

Office 365 E1 up $2 to $10 pupm

Office 365 E3 up $3to $23 pupm

Office 365 E5 up $3 to $38 pupm

Microsoft 365 E3 up $4 to $36 pupm

Microsoft 365 E5 No change at $57 pupm.

Microsoft 365 F SKUs – No change.

Jared Spataro, Microsoft Corporate VP for Microsoft 365 said “Microsoft believes the changes in prices may make the Microsoft 365 E5 SKU even more attractive” to customers”.

Take but give back..

Microsoft also said (more quietly) that that will be adding unlimited dial-in capabilities for Teams meetings across all its paid enterprise, business, frontline worker and government suites over the next few months (after offering free conferencing on a limited time for the last 12 months). This will help drive more people towards audio dial in (and presumably voice services) within Microsoft Teams and allows meeting participants to dial-in and join a Teams meeting from any device. Without needing the Teams client installed.

Read more….

For the official annoucement (US only at time of writing), read the official blog here.

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