Microsoft will increase the price UK business customers pay for its services by 9% in April 2023.
I would like to share three tips on how you can manage the impact of that price increase.
Firstly some background, why is Microsoft increasing the price by 9% in April 2023?
It is due to a decision taken to provide consistent global pricing for the Microsoft Cloud. Each region will have its own price in local currency and business customers will pay that new price which will be reviewed every 6 months. You can read the announcement from Microsoft here:
https://news.microsoft.com/europe/2023/01/05/consistent-global-pricing-for-the-microsoft-cloud/
So that is a price increase of 9%, however there is a second price increase introduced in March 2022 which may catch business customers by surprise. You can read the article here:
Cloud licences such as Microsoft 365 Business Basic and Standard were sold on monthly subscription and prices had not changed for ten years. Although these were annual contracts they could be paid for annually or monthly and could be ceased at any time for a pro rata refund. They could also be added to whilst preserving the same annual renewal date. It was a simple process to scale subscriptions to meet current user count and businesses could ensure they were not overpaying.
Those legacy licences were discontinued for new purchases from March 2022 and since then the New Commerce Experience (NCE) has been the route for new business. Just like the legacy subscriptions NCE has an annual renewal date and options for monthly or annual payment. However a big difference is that the commitment period which can be one month or one year is enforced, so if you reduce the number of subscriptions during the commitment period there is no refund.
What is the difference between monthly and annual commitment for Microsoft 365 subscriptions?
Monthly commitment is 20% more costly than annual.
Should I take Microsoft 365 licences on annual or monthly commitment? You can buy both types, annual licences for those licences you will need for the full year and monthly for any others.
Our staff numbers vary during the year, do we have to purchase annual Microsoft 365 licences for everyone? You can buy annual licences for permanent staff and monthly for temporary staff.
How does the 9% increase affect the Microsoft 365 prices?
The increase is not applied for licences in a commitment. For annual commitment price would be locked until the current commitment (renewal date) had passed. For monthly commitment price would increase on the next monthly renewal date after 1st April. Legacy subscriptions increase from 1st April 2023 as they are not in a commitment and can be cancelled at any time.
Thank you for reading so far, I will now give you the 3 tips I promised and a bonus tip:
Tip Number 1 Check licence quantities including seasonal adjustment
Tip Number 2 Check licence type, you can mix and match
Tip Number 3 Set the appropriate commitment period and order before 1st April 2023
Bonus Tip Contact Plum Communications for a free review and to order your licences
I hope that you found this useful, if you still have questions or want a review please contact me
We will not charge for the review and we can order the licences for you.
Peter Savic
Plum Communications
For more information on the changes and how they will affect you please contact Plum Communications.
Microsoft 365 – Business Communications – Plum Communications
