Making Sense of the Microsoft 365 Price Increase

Author: Craig Pollack Date: Feb 03, 2022 Topics: General Business Owner Blogs, Cloud, Technology Trends

Microsoft has announced that it will be increasing the cost of Office 365 and Microsoft 365.

There, I said it. Now let the angst begin!

Naturally, the first question is - What does this mean to you and your business? Our goal here is to flush this out and try to make sense of things.

Before we get into the mechanics of the price increase, a little background...

Since its inception a decade ago, Office 365 has grown to exceed 300 million commercial paying seats and all the while Microsoft has re-invested along the way to satisfy shifting needs of their consumers.

Microsoft 365 was created four years ago to combine the best of Office, Windows, and Enterprise Mobility and Security together (EMS). That same year, Microsoft Teams was introduced as the only integrated solution that allows you to meet, chat, phone, collaborate, and automate business processes while leveraging the Microsoft suite of products. Teams is the new front end for over 250 million monthly active users across business, life, and learning.

Since the launch of Microsoft 365, 24 additional apps—Microsoft Teams, Power Apps, Power BI, Power Automate, Stream, Planner, Visio, OneDrive, Yammer, and Whiteboard—have been added to the suites, totaling over 1,400 new features and capabilities.

Microsoft continues to develop real-time and asynchronous collaboration technologies. They offer real-time collaboration in the Word, Excel, and PowerPoint desktop apps, as well as a growing range of collaboration features like @mentions, assign tasks, modern comments, and auto-save. Additionally, OneDrive online storage and Exchange Online mailboxes have been introduced and increased along the way as well.

In addition, the cybersecurity environment now is more complicated than ever before. With the increasing volume, sophistication, and scale of cyberattacks, security and compliance is a must. Microsoft has added additional attack surface reduction features to Microsoft 365 to assist with defending against ransomware and other attacks. To assist protecting important data within an organization, they've included features like data loss prevention (DLP) for email and documents, sensitivity labels, and message encryption. They've also included robust compliance features like Content Search, eDiscovery, and fundamental Litigation Hold to help firms reduce risk and respond to growing regulatory requirements.

Why now?

A great many of these updates have been added at no additional cost, so organizations have enjoyed more capabilities without having to pay extra for them. Some of the apps as well as some of the enhancements to existing M365 apps have even allowed companies to save money by dropping other paid subscriptions.

One example of this is the recent addition of webinar registration and sign-up page capabilities in Microsoft Teams. Many companies had previously used a different service for scheduling and conducting webinars. With Teams adding that capability, it eliminated that additional service need.

But… the bill for all those value-adds is about to come due. Microsoft is introducing a price increase that it describes as “the first substantive pricing update since we launched Office 365 a decade ago.

When is the price increase going into effect?

The price increase will go into effect on March 1, 2022 or if you're currently on an annual contract, it will be at your next renewal date.

Are all plans affected?

No, all users will not experience a price increase on March 1st. For example, home and educational users will not be included, those prices will stay the same for now.

Also, not all commercial plans are increasing either. For example, Microsoft 365 Business Standard Users are not having their subscription prices impacted.

which plans are affected & by how much?

The following commercial plans will be getting an increase. This is going to be anywhere between $1 to $4 per user per month, depending on the subscription plan.

The increase is global, being adjusted for each currency. The plans being impacted are as follows:

In addition, and not to confuse things further, Microsoft has decided that the flexibility that month-to-month billing allows should require an additional surcharge. So if you're not on an annual plan, you'll now be charged an additional 20% to go month-to-month.  Luckily, a great majority of our clients should be unaffected by this part of the change as most are on annual billing plans.


Like everything else these days, we see inflation touching so many aspects of our lives - and online services such as Microsoft 365 is no different.  

We will be working closely with our clients to help navigate this change.  And if you're currently NOT a client of FPA, feel free to give us a call to see how we can help you as well.

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Craig Pollack

Craig Pollack

Craig is the Founder & CEO of FPA Technology Services, Inc. Craig provides the strategy and direction for FPA, ensuring its clients, business owners, and key decision makers leverage technology as efficiently and effectively as possible. With over 30 years of experience building the preeminent IT Service Provider in the Southern California area, Craig is one of the area’s leading authorities on how small to mid-sized businesses can best leverage and secure their technology to achieve their business objectives.