Microsoft are changing the way in which their Office 365 licenses can be purchased as well as announcing significant price increases for some of their Office 365 licenses. Here we give you the facts and tell you how to avoid these increases.
What are the price increases?
From 1 March, Microsoft are raising the pricing of six of their most popular products in the market. The main 6 products affected by the change, as well as the current estimated increases are below. Pricing in pound sterling will be made available at the start of February.
Furthermore, on 1 July Microsoft will apply a 20% premium to not only the 6 products that have been subject to price increases, but to all licenses purchased on a monthly payment plan.
| License Type | Price Increase on 1 March | Additional Premium for Monthly Plans on 1 July | Total Increase |
| Business Basic | 20% | 20% | 44% |
| Business Premium | 10% | 20% | 32% |
| Office 365 E1 | 25% | 20% | 50% |
| Office 365 E3 | 15% | 20% | 38% |
| Office 365 E5 | 8.5% | 20% | 30.2% |
| Microsoft 365 E3 | 12.5% | 20% | 35% |
Avoid the increases and save money with Westlake IT
The good news is that if you move to an annual payment plan with Westlake IT, we can save you money. We will not only be able to fix your current pricing for one year, but we will also be able to offer you a 5% discount on all your Office 365 licences.
What are the pros and cons of the monthly and annual payment plans?
It’s important you make an informed choice, so we’ve summarised he core pros and cons below:
Monthly Term Option
You can downgrade or deactivate your licenses in a 72-hour window once per month.
You can upgrade or add new licenses at any time
You pay a 20% price premium on ALL licenses purchased monthly
You can move IT license provider with a month’s notice
There is no price protection guarantee
We can only pro rata license downgrades or deactivations to the month. There is no daily billing.
You cannot purchase Exchange Online and other license types monthly. (See below)
Annual Term Option
You can downgrade or deactivate your licenses in a 72-hour window once per month.
You can upgrade or add new licenses at any time
You pay a 20% price premium on ALL licenses purchased monthly
You can move IT license provider with a month’s notice
There is no price protection guarantee
We can only pro rata license downgrades or deactivations to the month. There is no daily billing.
You cannot purchase Exchange Online and other license types monthly. (See below)
Not all licenses to be available to purchase on the monthly plan.
You will no longer be able to purchase the following licenses on a monthly plan. They will only be available on annual terms:
- Exchange Online Plan 1 (Email)
- Project Online Plans
- Enterprise Mobility & Security (E3 & E5)
- Microsoft Defender
- Intune
- Microsoft 365 Business Voice and Calling and Audio Plans
You can’t move provider
Another significant change is that businesses will not be allowed to move to a different license provider midterm. For businesses choosing to pay annually for their Office 365 licenses, you must remain with your provider for the whole year, so it’s important you choose the right IT partner.
In summary
This is Microsoft’s first price increase in over 5 years. Microsoft say the price increases reflect the investment they have made developing new features and capabilities such as the addition of 24 Apps to the Microsoft 365 product suite and new security and compliance measures to help businesses defend against cybercrime.
We understand Microsoft’s reasoning, but we also believe the increases to be inordinately high and the changes to be ill-timed. As we emerge from a global pandemic that has adversely impacted so many businesses, we believe these changes will be difficult for many businesses to absorb.
Westlake IT stand ready to support businesses in choosing the best option for them. Call us now on 02392 007850 to find out how we can help you.
