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Microsoft 365 Is Set For a Price Increase – Here’s What You Should Know

Calculating the cost of license price increase

We have some news to share from Microsoft, and we're afraid to say it's not good news for most of our customers.

First of all, Microsoft recently announced that there will be a global price increase across a number of its popular cloud service products. These price increases are coming to effect from 1st March 2022. New prices are currently only being listed in US dollars so we aren’t sure of how much UK customers will be charged yet, one reason we've not mentioned it before. According to Microsoft, the new increased charges are related to the worldwide rise in home working throughout the last two years, which Microsoft have supported with a host of new features that help remote workers - such as the addition of Teams to the Office suite, one of the 24 apps that have been added over the last 10 years.

Which products are affected?

  • Microsoft 365 Business Basic
  • Microsoft 365 Business Premium
  • Office 365 E1
  • Office 365 E3
  • Office 365 E5
  • Microsoft 365 E3

For clarity, the following suites are not increasing at this time: 

  • Microsoft 365 Business Standard  
  • Microsoft 365 E5 

Those customers who qualify for the education and non-profit pricing will not incur a price increase at this time.

In addition to the general price increases, Microsoft have also announced changes to the subscription model, and are removing the ability for customers to reduce or downgrade licenses for the duration of their agreed contract, which can be either monthly, annual or multi-year, with price incentives offered for longer committment (which locks in pricing too), and a premium paid for the flexibility of monthly agreements. 

So, for example, if a customer signs up to an annual agreement of 100 E5 licenses, they won't be able to remove any of those licenses, or downgrade to E3, until the end of that 12-month period. With the caveat being that after adding a licence you have a 3 day period in which you can cancel or change it. You can increase or upgrade licenses at any time, but there’s no getting out of your commitment early. Customers will be able to blend monthly and annual agreements to meet their needs - benefitting from the annual pricing, whilst still retaining the flexibility they need.

The changes will come into effect during the first half of 2022, with existing contracts being honoured. However, Microsoft are offering discounts to move over to the new model sooner rather than later, which will be the best option for most of our customers. With each customer being affected differently we plan to talk to each one individually to help them make the best choice moving forward. At this stage, we don't anticipate our customers seeing any price rises beyond those products above, as a result of these changes.

As we’ve said, UK prices aren’t available yet, but in the meantime please feel free to get in touch if you have any questions about your package with us. Once we have further information from Microsoft on the exact dates new terms will be available, and the new pricing, we'll update this post.

About the author


Fuse is a Microsoft Gold Certified Partner, based in Northampton. We help organisations of all sizes to maximise IT efficiencies through the use of Microsoft cloud computing solutions.

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