Your Guide To Microsoft License Rate Increases (Effective March 1st)
Are you aware of the pricing increase Microsoft is implementing for their services starting March 1st, 2022, as a part of their New Commerce Experience (NCE)?
Per-license rates will go up, and there will also be changes to monthly and annual commitment structures. Make sure to review the following price increases and other details so you know what to expect on your invoice in March.
Why Is Microsoft Changing Their Rates & Models?
Primarily, Microsoft is endeavoring to both simplify the way their plans work and to offer flexibility to businesses like yours where needed. NCE offers a far less complex system of plans and rates than Microsoft’s previous model and allows for businesses to better harness the exact services they need.
Furthermore, these rate changes reflect a number of developments—25 new apps and over 140 features—Microsoft has introduced to their platform over the past few years:
- Microsoft Teams, a comprehensive communication platform with meetings, chats, calls, and collaboration features.
- Implementation of data loss prevention (DLP) capabilities for documents and emails and messaging.
- Use of AI-supported capabilities to automate user’s tasks, gather critical information, and support communication.
How High Are The New Microsoft Rates?
| Microsoft 365 Plan | Old Rate (per license) | New Rate (per license) |
| Business Basic | $5 | $6 |
| Business Premium | $20 | $22 |
| E3 | $32 | $36 |
| Office 365 E1 | $8 | $10 |
| Office 365 E3 | $20 | $23 |
| Office 365 E5 | $35 | $38 |
How Do The New Microsoft Rates Work?
Up until now, you have purchased Microsoft 365 licenses under what is called “Legacy CSP”. This arrangement has offered a lot of flexibility, allowing you to cancel licenses whenever you like.
Starting March 1st, 2022, Microsoft is launching the “New Commerce Experience”. This program is designed to provide a consistent and standardized purchasing experience. Here’s what you need to know about it:
- Monthly subscriptions will come at a 20% premium price when compared to annual subscriptions, which are less flexible.
- Licenses that are canceled mid-month will be billed for the full month.
- After a 72-hour cancellation period, the client is committed to the full term of the agreement with no early cancellation.
- Clients cannot move subscriptions to a different provider while committed to a term.
Is A Monthly Or Annual Commitment Better?
An important consideration is whether you opt for a monthly or annual license commitment. If you prefer the flexibility of changing license counts monthly, you will pay a 20% premium compared to the annual commitment rate.
However, it’s important to note that the commitments auto-renew, so you will want to track when you opt-in so you can review prior to the renewal date. Furthermore, when you agree to an annual commitment, you are locked in at your current license count as a minimum. If you happen to dip below that number, you will not receive any discounts or money back within the one-year period.
How Does Microsoft Justify The New Rates?
Microsoft says it is adjusting the prices to reflect the massive value and enhancements it has added to the Office 365/Microsoft 365 suites over the past several years. Since introducing Microsoft 365 four years ago, the company has added a total of 24 apps to its Office 365/Microsoft 365 suites, including Power Apps, Teams, Power BI, Stream, Planner, Visio, Power Automate, Yammer, OneDrive, and Whiteboard.
Notably, while some of these apps are available free of charge, such as the Power Platform family of products, others require additional licenses and subscription fees. Additionally, Microsoft has also added over 1400 new features to its Office 365 subscriptions targeting three key areas:
Communication And Collaboration
Microsoft Teams is providing over 250 million monthly active users across the world a new front end across work, life and learning. Microsoft launched Teams in 2017 as an integrated solution that allows users to meet, chat, call, collaborate, and automate business processes within the flow of work. The following are some of the enhancements that Microsoft has added to Teams in recent times:
In 2020 Microsoft released more than 300 new Teams capabilities. These features include Together Mode, Live Reactions, Breakout Rooms, Large Gallery View, Raise Hand, Background Effects, Fluid Components, Live Captions with speaker attribution and more.
Microsoft also introduced top-notch collaborative tools in Teams designed for the productivity of organizations and workforces in hybrid work environments. The collaborative applications leverage deep integrations with Power Platform, Whiteboard, Lists, Planner, Shifts, Forms, and SharePoint to empower people and teams for hybrid work.
The company has also introduced real-time collaboration in PowerPoint, desktop apps, Excel, and Word. Microsoft is leveraging capabilities such as Auto-Save, Modern Comments, Assign Tasks, and @Mentions to streamline the collaboration experience. The company has also expanded the Exchange Online mailboxes and OneDrive cloud storage.
Security And Compliance
In 2020 cyber-attacks were rated as the fifth top-rated risk, which is fast becoming the new norm across public and private sectors. This trend is expected to grow in 2021, with studies revealing 30% of all Canadian companies suffer up to 20 cyberattacks in a 12-month period. Microsoft has added new attack surface reduction capabilities to Microsoft 365 designed to help organizations and businesses minimize exposure to ransomware and other threats. Some of the specific security additions include:
- Message encryption to help keep crucial data within the organization
- Data loss prevention (DLP) for email and documents
- Powerful compliance capabilities to eliminate or reduce risks and meet the increasing regulatory requirements
- Built-in mobile device management (MDM) and Microsoft Endpoint Manager to enable admins to support remote and hybrid workforces
AI and Automation
In the last ten years, Microsoft has integrated a set of AI capabilities on their productivity and collaboration applications that help organizations and teams achieve more with little. Some of the notable additions under this category include:
- AI-powered innovations that empower users to be better presenters, designers, and writers
- A cloud-powered solution that can automatically create charts, maps, and tables in Excel. The solution also helps sort out emails and eliminate clutter in Outlook.
- AI-powered real-time translation, captions, and transcription solution that enables engaging and accessible collaboration and communication
- Microsoft Is Adding Unlimited Dial-in Capabilities for Teams
In addition to the new price increases, Microsoft has also revealed it is planning to add unlimited dial-in capabilities for Teams meetings across its paid enterprise, business, frontline worker, and government suites over the next six months.
The unlimited dial-in capabilities allow more people to dial in and join a Microsoft Teams meeting from anywhere and via any device. It is designed to enable the users to access a dial-in number and utilize Teams like Conferencing Bridge. This means that users won’t have to download the app to join meetings over the Internet.
Want To Harness Microsoft 365’s Benefits?
Don’t settle for a sub-par cloud experience, and don’t think you have to be the one managing it. The ExcalTech team can take that off your plate for good, allowing you to take advantage of its optimized user experience and focus on your work.
Questions about these new rates? Get in touch with the ExcalTech team.
