Microsoft recently announced two significant changes that have an impact on most of its customers. First, the commercial pricing for some Microsoft cloud products will increase. The second important update is New Commerce for CSP seat-based offers. New Commerce introduces several significant changes to the existing CSP program. Both these changes will be effective on March 1, 2022, which allows you enough time to understand how your company may be impacted and to research your options.
According to Microsoft, while Office 365 has grown to over 300 million commercial paid seats, there has been no substantive price update since Office 365 was launched. The only changes that Microsoft has made in the past few years were related to conversion rates. Therefore, the new price reflects the increased value Microsoft delivers to its customers.
On March 1, 2022, Microsoft will update the pricing for the following commercial products:
| Product | Price Change - $ | Price Increase - % |
|---|---|---|
| Microsoft 365 Business Basic | From $5 to $6 per user | 20% |
| Microsoft 365 Business Premium | From $20 to $22 | 10% |
| Office 365 E1 | From $8 to $10 | 25% |
| Office 365 E3 | From $20 to $23 | 15% |
| Office 365 E5 | From $35 to $38 | 8.57% |
| Microsoft 365 E3 | From $32 to $36 | 12.50% |
New prices will apply globally with local market adjustments for certain regions. There are no scheduled changes to pricing for Microsoft 365 E5, Education and Consumer Products (at this time).
In addition to the price increase as stated above, Microsoft will introduce several significant changes to the existing CSP program, specifically New Commerce for seat-based offers including Microsoft 365, Dynamics 365, Power Platform and Windows 365. This includes the following changes:
The most significant change is that the annual term subscription cannot be decreased any longer. Customers who are using the CSP model to increase and/or decrease subscription amounts on a monthly or even daily basis have one of two options:
The current CSP model will be available to new and existing customers through February 2022. Although the New Commerce model is launching on October 1, 2021, customers will not be required to move to New Commerce until March 1, 2022.
Depending on the contract selected, there are several strategies to make the initial price increases more favorable. There is an opportunity to reevaluate the options to look at product/service bundles with SoftwareOne to offset price hikes, and lastly that evaluating contracts for the right balance of stability and flexibility can be done. As your Microsoft expert partner we are currently analyzing what this means for you, the CSP customer, and will be providing information, educational webinars and free consultations for you to look at your options.
Depending on which contract you select, there are a few strategies to make the initial price increases more favorable. Do you want to find out which one is the best for you?
Depending on which contract you select, there are a few strategies to make the initial price increases more favorable. Do you want to find out which one is the best for you?
