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February 12, 2022

Microsoft announces price increase and new commerce experience

Microsoft has announced price increases for some Office 365 and Microsoft 365 services. The price increases will affect commercial and government users of Microsoft’s software as a service (SaaS) offering starting March 1st, 2022. From March 10th 2022, all new subscriptions will be procured through Microsoft’s New Commerce Experience, which has been developed with the goal to reduce licensing complexity.

Our guide below helps you better understand what these changes mean for your organization and what you can do to be prepared.

What services are included in the price increase?
Microsoft’s updated annual and multiyear pricing will go into effect on March 1st, 2022*:

  • Microsoft 365 Business Basic (from $5 to $6)
  • Microsoft 365 Business Premium (from $20 to $22)
  • Microsoft 365 E3 (from $32 to $36)
  • Office 365 E1 (from $8 to $10)
  • Office 365 E3 (from $20 to $23)
  • Office 365 E5 (from $35 to $38)

Why the changes?
In short, Microsoft’s price increase – a decade after introducing Office 365 – is due to the increase in value over the years. Since the launch of Microsoft 365, our partner has added several much-loved apps to Microsoft 365 and Office 365, such as Teams, Power BI, and OneDrive, and not to mention countless new security features and automation capabilities.

Licensing simplified
Microsoft is also introducing a more simplified approach to licensing: the New Commerce Experience (NCE) for online services such as Microsoft 365, Dynamics 365, Power Platform and Windows 365. The NCE licensing model is built on an annual or multi-year commitment, aligned with the other Microsoft agreements (Enterprise Agreement, Open Value Agreement).

Here are the key highlights to the transformed CSP program:
Since March 2022, all new commercial product subscriptions are only made available via the NCE licensing model. Starting November 2023, public sector (academic, government community cloud, not-for-profit/charity) offers will be available in new commerce for new and renewing subscriptions. From January 2024, Microsoft will begin automatic migration of all renewing commercial and public sector customers to the NCE. You can find your subscription renewal dates on the Subscription page in the Inova Customer portal.

Key benefits:

  • Cost savings and price protection when purchasing an annual or multiyear subscription, compared to the more flexible monthly subscription
  • Licenses can be decreased or cancelled within 168 hours of being purchased or alternatively at the end of the subscription term
  • Mid-subscription seat increase will be invoiced prorated for the remainder of the subscription

Multi Geo is now available. This service allows organizations to provision and store data in various geolocations, making it easier for them to meet data residency requirements.

What to do next?
Evaluate your current and future business needs. Schedule a call with your trusted Inova Solutions account manager, who can guide you through the options and opportunities available to help you manage the upcoming changes. We will help you plan optimal use of your current IT resources, while assisting you in making valuable future investments.

*Above prices are per user per month, based on annual or multi-year billing through the NCE. The announced price changes are currently not applicable to education products.

Source: Microsoft


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