There is a two-part price increase coming from Microsoft beginning on your February invoice. This price increase happens for most sku’s. It has been 10 years since Microsoft increased the price of Microsoft 365, so this increase is not unexpected. Over the last 10 years the feature set has dramatically increased as well. Microsoft 365 is now a full line of business application that can run your entire business. And to think it started off as just email. The security needs of businesses have changed entirely for businesses over that same 10 years and Microsoft has kept up. This price increase wasn’t really a surprise to us when it was announced. That price increase is about 20%. For example the Microsoft 365 sku goes from $20 to $22.
While it’s not specifically an offset to the price increase, the timing it right to consider it one. Microsoft is adding Defender for EndPoint, an additional security package that was previously sold separately for $9 per user. This will now be included. Microsoft is also adding audio conferencing to all licenses. This allows your meeting participants to dial into your online meetings using a phone number. You can start taking advantage of this now, under a free trial, and then in March it becomes part of the official licensing package. Previously this was sold separately for $4 per user.
In short, Microsoft has increased the cost of the license by $2 but also added $13 worth of new product and features to it. As the first price increase in 10 years, that’s not a bad deal.
However….licensing terms change too
What is a surprise for us is how Microsoft is also changing the terms of the license. Currently everyone is on a monthly term. Meaning, you can change your licenses at any time, in any month, up or down, without penalty. We send in your payment to Microsoft monthly. Now, however, if you’d like to keep that flexibility, there will be a surcharge. We don’t know that number yet. We may not know it until March. Rumor is that it is an additional 20% of the license cost. If this is true, and we suspect that it is, then that would bring the monthly license cost to $26.40.
Where does that leave the net increase? Microsoft has gone from $20 to $26.40 for a $6.40 increase. However, they have also added $13 of value to the suite, which we will help you take full advantage of. The security additions are very much needed and the audio conferencing will provide immediate value. Looked at this way, we are still $6.60 ahead of the game.
I’m an optimistic person by nature. I always look on the bright side. I’m extremely happy that we’re going to have these additional security features. To me that makes this whole thing much easier to swallow. Though I do realize that price increases are always difficult to manage.
Our costs increase too
Of course this means that our costs to obtain the licensing in order to manage your tenant are going to increase too. We are currently reviewing the tools and services that we require to manage networks. When we’ve completed that we’ll have more information for you.
Questions about these changes should be directed to Ted or Amy. Our techs, while very helpful capable individuals are not burdened with keeping up with licensing and pricing changes.
