Microsoft 2022 price increase
Late last year Microsoft announced the first major pricing update that the company has implemented since they launched Office 365 10 years ago, reflecting the increased value delivered over the past decade.
Four years ago, Microsoft introduced Microsoft 365 to bring together the best of Office, Windows, and Enterprise Mobility and Security (EMS). Since introducing Microsoft 365, 24 apps have been added to the suites such as Microsoft Teams, Power Apps, Power BI, Power Automate, Stream, Planner, Visio, OneDrive, Yammer, and Whiteboard.
The good news is that the 15 – 20% price increase set to come into effect on the 1st March 2022 will not affect all Microsoft individual products.
Exchange Online Plan 1 and Business Standard licenses, which many Databias customers use, will not be affected by this specific increase. It does, however affect the Business Basic license, which many customers are finding attractive as it now includes Teams, which is no longer free.
What will come as a shock to our customers is the fact that Microsoft has also informed all managed service providers (MSPs) such as Databias, that they will be launching a New Commerce Experience for Office in March, revamping the way customers buy its software through business partners. While Microsoft hasn’t publicly announced a specific price change as yet, it has informed partners that organizations paying by the month will face a 20% hike unless they move to annual subscriptions.
This means that in effect the monthly Business Basic license cost will increase by around 40%, while the EOL Plan 1 and Business Standard licenses will go up by at most 20%.
As a Microsoft Partner, one of our greatest value propositions has been that we were able to offer you Microsoft products at a competitive rate with built in flexibility, however going forward, the flexibility is something that customers will need to pay more for.
By pushing more users to annual subscriptions, Microsoft will have better visibility into its revenue and reduce concerns about customer churn.
This obviously has massive repercussions for us all, but at Databias we believe that we should take the opportunity to look at how our customers use their licenses and make recommendations on a per customer basis as to how to manage their licensing mix going forward. Databias remains confident that the Microsoft offering remains the most professional work solution for the savvy business in a time where remote has become the norm.
Have you got the CAPEX to purchase all your licenses up front and commit to using these licenses till March 2023?
We will be reaching out to all of our customers during the month of February to strategize a way forward while we wait for Microsoft to finalize and communicate their proposed changes. In the meantime, please do begin to think on how you use your licenses and how best to manage your budget in 2022.
Perhaps, you wish to purchase some annual licenses, and then have a few more flexible licenses that you pay a premium for.
We will only be able to update our pricing once we have actual price changes from Microsoft. As soon as we learn more we will communicate with you, our valued clients. We commit to keeping the increase as low as possible.
If you have any queries or need to speak to someone about your account, please contact accounts@databias.co.za