Microsoft 365 prices are set to increase by up to 25% on 1st March 2022, before increasing a further 20% for monthly subscribers in July 2022.

Microsoft 365 Price Increase
© Windows / © IMS Technology

In August of last year, Microsoft announced that it would be changing the prices of many of its products in 2022, including most Microsoft 365 tiers. Then in December, they announced they would be rolling out the New Commerce Experience, bringing further premiums to users without annual subscriptions.

What we know about the increases so far

Despite it now being several months since Microsoft made the March increase announcement, and with the change date fast approaching, there has yet to be any confirmed prices for markets outside of the US. Because of this, the US prices are the only prices we have to go by, though typically the prices for the UK run relatively parallel when converted.

In their announcement, Microsoft included the following price changes:

Product
Current Price
Price From 1st March
% Increase
365 Business Basic
$5.00
$6.00
20%
365 Business Premium
$20.00
$22.00
10%
Office 365 E1
$8.00
$10.00
25%
Office 365 E3
$20.00
$23.00
15%
Office 365 E5
$35.00
$38.00
8.6%
Microsoft 365 E3
$32.00
$36.00
12.5%

Microsoft also stated that “these increases will apply globally with local market adjustments for certain regions.”

This means by increasing the UK prices by the same percentages as their corresponding US prices, we can (albeit roughly) estimate what the new prices will be. Of course, this will not be exact due to the tendency for prices to be rounded and adjusted, and because conversion rates have changed since the current prices were set several years ago.

The following prices are speculation and are only for illustrative purposes:

Product
Current Price
Price From 1st March (est.)
365 Business Basic
£3.80
£4.56
365 Business Premium
£15.10
£16.61
Office 365 E1
£6.00
£7.50
Office 365 E3
£17.60
£20.24
Office 365 E5
£30.80
£33.45
Microsoft 365 E3
£28.10
£31.61

In addition to these price increases, Microsoft will be adding a 20% premium to all business and office products registered via monthly subscription. This will apply to products included in the March increase, as well as those excluded.

How to avoid paying more

By acting quickly, businesses can avoid both price increases, for the time being.

First and foremost, switching to an annual subscription and avoiding the 20% price premium for a monthly subscription is going to make a huge difference. Small business owners may of course feel apprehensive about being locked into a 12-month deal, but the good news is they can still choose to pay monthly on an annual subscription.

Furthermore, by switching to an annual subscription before 1st March, business owners can pay the current fees, meaning the March price increase can be avoided for a year.

Example: In July a business that has a monthly subscription for 10 x 365 Business Premium licences will pay approximately £2400 per year, whereas switching to an annual subscription would cost approximately £2000. Alternatively, if they changed to an annual subscription before 1st March, they will pay approximately £1800 per year for the subsequent 12 months. Doing this will save them £600, or 25%, compared to their new monthly subscription cost.

It is, therefore, our recommendation to change to an annual subscription this February, which is why we are offering early renewals to our customers.

If you are looking to take advantage of this, or simply have an enquiry regarding Microsoft 365, don’t hesitate to get in touch. One of our expert advisors will be more than happy to give an in-depth, no-obligation consultation to discuss Microsoft 365 with you.

Interested in learning more?