Microsoft changes as of March 2022
Microsoft have decided to rip off the sticking plaster opting to issue a product price increase to some of their Microsoft and Office products and change their global payment model across the Microsoft board, at the same time.
Microsoft price increases were overdue
There haven’t been any price increases to Office 365 (now including Microsoft 365) for over a decade. The announced payment changes to the Microsoft pricing model are not unique. The vast majority of any annual services/charges when offered on monthly payment terms, comes with a premium. Think car insurance, or car tax. Other subscription services have ONLY ever been available as a monthly subscription and already have the increased costs in administration and cancellation, built in. Think Netflix, think Amazon Prime.
Changes to the Microsoft Payment Model
Before the published changes
Whether Microsoft users have contracted directly with Microsoft or via their CSP, there has been the option to pay monthly in advance or annually in advance. Licensing per seat has been the same whichever payment option has been chosen. There has been the flexibility to add or remover licences to and from your plan and swap out a licence type for another to suit your staff’s changing needs.
After the published changes
From March 2022, all Microsoft customers will pay a premium to retain the monthly, in advance payment option. This applies to Microsoft 365, Office 365 and Dynamics 365.
A 20% premium is expected on the price of each named licence to pay monthly in advance. This model will still provide the flexibility to add or remove licences to your plan and swap out a licence type for another to suit your staff’s changing needs.
When customers pay annually in advance, there will be no monthly payment premium, merely any product price increases if these licence types are within your plan. However, whilst you can ADD licences to your plan and ALLOCATE licences to different users to accommodate staff turnover or changing job roles, you cannot:
- Cancel a licence from your plan for a pro rata refund
- Upgrade a licence for a pro rata refund
- Downgrade a licence for pro rata refund
Example
Barry has worked in the warehouse for 15 years and has a Business Basic licence. Barry has worked extremely hard and developed his skill set and has been promoted to warehouse manager. Barry now needs the additional functionality of Business Standard licence to support this promotion.
Barry’s Business Basic licence can be reallocated to Jeff who is taking his place but cannot be cancelled from your plan until renewal if Barry’s post is not filled.
Barry will need a new subscription for Business Standard. This will be an additional licence to your annual plan until adjustments can be made at your next renewal.
Microsoft Product Licence Price Increases
| Product Hierarchy | Description | Increase Expected + |
|---|---|---|
| Microsoft 365 | Business Basic | 20% |
| Microsoft 365 | Business Premium | 10% |
| Microsoft 365 | E3 | 12% |
| Office 365 | E1 | 25% |
| Office 365 | E3 | 15% |
| Office 365 | E5 | 9% |
Microsoft 365 Business Standard & Dynamics 365 Business Central
As at the date of publishing Microsoft 365 Business Standard & Microsoft Dynamics 365 Business Central, will NOT be subject to a price increase, but will be subject to the monthly payment premium along with all other Microsoft SaaS products.
When do the changes affect me?
Your contract renewal date is the key regarding product price increases.
Your licence cost, per seat and your current payment method will not be affected until your next renewal.
Tip; Consider your preferred payment model now
Would you prefer to remain on monthly payments and pay the premium for that facility or pay annually to keep the cost of your Microsoft licensing as keen as possible?
Your CSP (cloud solution provider) will support you through these changes
Your choice of payment option and detailed licensing requirements for your next renewal year, need to be discussed and agreed with your CSP in good time prior to your renewal so that the renewal is seamless and mirrors your precise licensing requirements and payment preference.
Now, more than ever, the service from your CSP will be invaluable (or it should be, anyway)
How Qi will support its CSP customers
Aside from notifying all our CSP customers that these changes are coming, we will be contacting each of our CSP customers individually, to make ready for the product price increases and the payment model changes.
When we contact our customers for their individual Microsoft licensing review, we will rely on the fact that the importance of the licensing changes will ensure that participating in the Qi Microsoft Review service is considered a priority.
We will ensure that general messaging is available via our website and signpost our customers to pertinent updates as they are published by Microsoft.
Is Microsoft still the right vendor for me?
In a nutshell and in our opinion, most definitely – yes!
Microsoft have highlighted the following:
At launch in June 2011, Office 365 included Word, Excel, PowerPoint, Outlook, Lync, Exchange, and InfoPath. We’ve since expanded to add other apps – in whole or in part – and entirely new capabilities including: Access, Bookings, Delve, Forms, GroupMe, Kaizala, Lens, Lists, OneDrive, OneNote Class Notebook, Planner, Power Apps, Power Automate, Power BI, Publisher, SharePoint, Staff Hub, Stream, Sway, Teams, To-Do, Visio, Whiteboard, and Yammer.
Microsoft 365 Delivers Flexible working options
Unlike its competitors, Microsoft 365 has a download option. All Microsoft 365 business apps are also available as desktop versions if required (and if licensed for this) and can be installed directly from the cloud on local devices and used offline.
Let’s consider Microsoft Teams & SharePoint as examples
Even pre-pandemic, the value of Teams and SharePoint for businesses globally, was demonstrable. The Forrester report from 2019 can be accessed here.
Since March 2020, the need for and use of online communication and collaboration tools has grown exponentially resulting in new and durable working habits. Microsoft Teams supports these digital transformations in the best way possible and businesses are now using Teams for shift management, clocking in and clocking out, walkie-talkie voice communication across larger working spaces (factories for example).
Think Approvals and Task Planner, Power BI and Power Automate. The list isn’t endless, because no list is but to say that the list of core benefits and apps Microsoft Teams has to offer is comprehensive – fails to do it justice.
No price increase is ever welcomed
In the round we all have to consider whether the price we pay for goods and services returns on its investment.
Thought for the Day
Consider whether you are making the best use of your Microsoft licensing. Could and should you be making more use of the powerful tool kits you already have access to? Call Qi to find out how.