Microsoft’s 2022 Pricing Update

On March 1st, 2022, Microsoft will officially change its commercial pricing structure. These pricing adjustments were established as part of Microsoft’s New Commerce Experience for Office (NCE).

Microsoft’s 2022 Pricing Update: Everything Winston-Salem Businesses Need To Know

On March 1st, 2022, Microsoft will officially change its commercial pricing structure. These pricing adjustments were established as part of Microsoft’s New Commerce Experience for Office (NCE). While pricing adjustments will vary based on location and subscription terms, many commercial subscribers could face a 20% rate increase in addition to individual increases in Microsoft 365 plans. Below is an in-depth look at Microsoft’s pricing update and the steps you can take to prepare for the price increase.

Microsoft 2022 Pricing Update

Who Is Impacted By The Price Increase?

Customers across the globe who have a commercial Office 365 or Microsoft 365 subscription will be impacted. There are no plans to change price structures for education and consumer products at this time. Here is a look at how license prices will be impacted:

  • Microsoft 365 Business Basic: User rates will rise from $5 to $6.
  • Microsoft 365 Business Premium: Rates will rise from $20 to $22.
  • Microsoft Office 365 E3: Rates will rise from $32 to $36.
  • Office 365 E1: Rates will rise from $8 to $10.
  • Office 365 E3: Rates will rise from $20 to $23.
  • Office 365 E5: Rates will rise from $35 to $38.

In addition to these increases, some customers could face an additional 20 percent price hike. Customers subject to this additional 20 percent hike are those who choose to remain on their existing monthly subscription plan. Customers who decide to switch to an annual subscription plan will not be subjected to the 20 percent price increase.

Why Is Microsoft Increasing Prices?

“Since its launch a decade ago, Office 365 has grown to over 300 million commercial paid seats. Along the way, we have continuously re-invested to meet the changing needs of our customers. Four years ago, we introduced Microsoft 365 to bring together the best of Office, Windows, and Enterprise Mobility and Security (EMS).” –  Jared Spataro, Corporate Vice President for Microsoft 365

In his Microsoft 365 price update announcement, Jared Spataro, Corporate Vice President for Microsoft 365, calls the price increase, “The first substantive pricing update since we launched Office 365 a decade ago.”

Spataro went on to say the higher price structure “reflects the increased value we have delivered to our customers over the past 10 years,” and said he believes the price change will make Microsoft 365 E5 SKU “even more attractive” to customers. In a nutshell, these comments suggest there are three key reasons for the price increase:

  • Reason One: It is time for a price increase. Microsoft 365 had not raised prices in 10 years, so executives note the increase is warranted.
  • Reason Two: Improvements warrant the increase. The addition of Microsoft Teams and 23 other apps justify the upcoming increase.
  • Reason Three: More customers will move to Microsoft 365 E5. Currently, only 8 percent of customers are using this best-in-class product.

What Steps Can Your Business Take To Contend With These Price Increases?

For many small to medium-size businesses who are already struggling to contend with inflation, these price increases are a tough pill to swallow. However, there are some measures you can take to minimize the financial impact to your organization. Here are three steps you can take to contend with Microsoft’s looming price increases.

Carefully Review Your Options

The path to a rewarding Microsoft experience begins with a clear understanding of their licensing plans and a comparison of their monthly and annual commitment options. If you have questions or need help deciphering the changes, do not be afraid to ask a Microsoft expert. With a strong working knowledge of the upcoming changes under your belt, you can make an informed decision for your business.

Consider Switching To An Annual License Commitment

Many budget-conscious business owners in North Carolina like the flexibility that Microsoft’s monthly commitment offers. However, Microsoft’s updated pricing is designed to reward customers who commit to an annual license commitment. You can receive a 20 percent discount by opting for an annual license commitment instead of a monthly commitment.

If you decide to switch to an annual license commitment, time your switch carefully, as you will be locked in using your existing license count. Also, annual commitments auto-renew, so make sure you track the date you make your switch.

Schedule A Microsoft 365 Checkup With Parkway Tech

Navigating Microsoft’s looming pricing changes is not easy – especially for small business owners grappling with a host of other operational challenges. The single best step you can take is to reach out to a trusted Microsoft software expert for guidance and support.

As Winson-Salem’s most trusted Microsoft partner, Parkway Tech can help you understand how the upcoming rate changes will impact your business. During your Microsoft 365 Checkup, you can expect the following:

  • Custom guidance from an experienced team of proficient Microsoft software experts
  • Determine whether your business is getting the most out of your Microsoft 365 experience
  • Assess what type of Microsoft 365 license is best for your business moving forward
  • Ensure you have the necessary firewalls and antivirus software in place
  • Answer any lingering questions you may have about Microsoft’s rate increases

By the end of your checkup, you should feel confident in your subscription choice and confident about moving forward with the plan you choose. Should you have any questions at all moving forward, the Parkway Tech team is always available to respond to your Microsoft support needs.

The Bottom Line

Microsoft remains a dominant force in the cloud software market. With a price increase scheduled to take place on March 1, 2022, Microsoft Executives are reaching out to customers to outline the price increases and provide a rationale for the price increase. Whether you decide to stick with your existing subscription or change your plan, be sure to maintain a record of your subscription activity and remember Microsoft’s annual commitments will renew automatically.

For more information on Microsoft’s upcoming price increases, we invite you to contact us at Parkway Tech. We look forward to delivering the Microsoft guidance you need at a price you can afford.

Thanks for our friends at Orion Networks for their help with this article. Discover more about the Orion Network IT services programs for businesses in Maryland.

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