Massive Changes to Microsoft 365 Pricing
On March 1, Microsoft will modify pricing and policies for several Microsoft 365 services. In addition, Microsoft is launching a new/reworked licensing program in early 2022. We investigated this in detail, and although many answers are yet to be determined we wanted you to know these important points as presented to us.
Per Microsoft:
- All "paid monthly" licenses always have been an Annual term, with Microsoft allowing everyone to pay monthly
- Microsoft will now enforce the Annual contract term as a commitment to pay
- A new Monthly term will be available, for 20% additional per license
- A new Three-year term will be available, for an as-yet-unspecified discount
- Cancellation/decrease of license count is only allowed in the first 3 days after renewal or initial purchase
- We think this applies to the new Monthly term as well
- The day of the initial purchase counts as the first day (even at 11:59 pm)
- After 7 days, no refunds, no exceptions, even for clients changing Microsoft Partners (was 3 days, Microsoft changed it to 7)
- Monthly licenses provide no partial credit for mid-month cancellations
- Unclear yet whether the Monthly window is on the day ordered or the first of each month
- Additional licenses (e.g., one mailbox) can be added any time
- Will co-term with the original subscription
- New products, notably add-on products, are considered new subscriptions will have their own annual term/renewal
- Some products can be "upgraded" to lower cost products, limited to Microsoft's approved upgrade list
- Terms can coexist, for instance 15 Annual plus another 10 Monthly, to account for seasonal or expected workforce changes
- Annual or Three-year terms will lock in current pricing for the duration
These changes are not specific to ITS or other Microsoft Partners, they affect direct purchases with Microsoft as well. As of this writing it is unclear when exactly the change to Monthly will take effect. It may depend on when the current subscription renews.
January 2022 Update: Not all services/plans will be available on a Monthly basis, notably email-only plans and several add-on plans.
For Clients Licensing Through ITS
When appropriate, ITS will convert all existing licensing purchased through ITS to the new Monthly term unless a client requests we use an annual term. Please see our email about this for details, or contact us.
For Clients Licensing Directly WITH Microsoft
You may wish to review your license selections, once the new options are available in 2022. Eventually all licenses will convert to the new platform and be subject to price increases and term enforcement.
Price Changes
The below products increase in price on March 1. This is Microsoft's first U.S. price increase in ten years, aside from minor adjustments of a few cents up or down. As noted above all Monthly contract terms will be another 20% additional, for all products.
Office 365 E1: $10 (from $8)
Office 365 E3: $23 (from $20)
Office 365 E5: $38 (from $35)
Microsoft 365 Business Basic: $6 (from $5)
Microsoft 365 Business Premium: $22 (from $20)
Microsoft 365 E3: $36 (from $32)
Nonprofit: No changes to nonprofit pricing or purchasing methods (except the 20%)
Note Microsoft is not changing pricing for Microsoft 365 E5 or Microsoft Business Standard.
December 2021 (upd. Jan 2022, April 2022)
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