Microsoft has recently announced plans for two significant changes to the Microsoft 365 and Office 365 product platform. As a Microsoft Gold Partner, The Scarlett Group is working with Microsoft to learn about these changes and will be continually communicating important information to our clients as it is made available. As of now, what we do know is that most clients will see an increase in their Microsoft 365 subscription costs along with changes to the subscription terms. Those changes are outlined below. Let’s jump right in.
Change Number 1 – Microsoft New Commerce Experience (NCE)
Since it’s inception 20 years ago, Microsoft’s “Office 365” product has been governed by a 12-month subscription term. For various reasons, Microsoft has never really enforced this term, allowing users to terminate a subscription early with no penalty or additional costs. Beginning in March of 2022, subscriptions for Microsoft 365 and Office 365 products will be governed by new guidelines that Microsoft is calling the “New Commerce Experience.” Going forward under the NCE, Microsoft will enforce the 12-month commitment for new subscriptions to Microsoft 365 / Office 365 products. Clients will still be able to pay for their annual subscriptions on a monthly basis but will be responsible for the entire 12-month term.
Additionally, these annual subscriptions cannot be made coterminous, meaning that adding users and subscriptions throughout the year will require managing multiple subscription renewal dates.
Understanding that some organizations require flexibility, Microsoft will still provide a month-to-month subscription option for Microsoft 365 and Office 365; however, these licenses will incur a 20% (approximate) price increase over the monthly subscription costs.
Change Number 2 – Microsoft 365 Pricing Changes
Along with (but separate from) the subscription changes outlined in the New Commerce Experience, Microsoft has announced upcoming price changes for some Microsoft 365 products. The pricing changes will go into effect on March 1, 2022, for the following products:
- Microsoft 365 Business Basic - $5 increased to $6
- Microsoft 365 Business Premium - $20 increased to $22
- Microsoft 365 E3 - $32 increased to $36
- Office 365 E1 - $8 increased to $10
- Office 365 E3 - $20 increased to $23
- Office 365 E5 - $35 increased to $38
This pricing increase reflects the myriad enhancements and innovations around communication and collaboration, security and automation that have been added throughout the years.
Microsoft is offering a 12 month “lock in” at current pricing for clients that purchase subscriptions between January 2022 and March 2022. Additionally, Microsoft has offered a 5% discount for those clients who sign up before March 2022.
The Scarlett Group will be working with our clients to navigate these changes. Look for additional information on this blog, via email, and via direct contact from our Microsoft Licensing specialists.