https://www.channelfutures.com/wp-content/themes/channelfutures_child/assets/images/logo/footer-new-logo.png
  • Home
  • Technologies
    • Back
    • SDN/SD-WAN
    • Cloud
    • RMM/PSA
    • Security
    • Telephony/UC/Collaboration
    • Cable
    • Mobility & Wireless
    • Fiber/Ethernet
    • Data Centers
    • Backup & Disaster Recovery
    • IoT
    • Desktop
    • Artificial Intelligence
    • Analytics
  • Strategy
    • Back
    • Mergers and Acquisitions
    • Channel Research
    • Business Models
    • Distribution
    • Technology Solutions Brokerages
    • Sales & Marketing
    • Best Practices
    • Vertical Markets
    • Regulation & Compliance
  • MSP 501
    • Back
    • MSP 501 Rankings
    • NextGen 101 Rankings
  • Intelligence
    • Back
    • Galleries
    • Podcasts
    • From the Industry
    • Reports/Digital Issues
    • Webinars
    • White Papers
  • Channel Futures TV
  • EMEA
  • Channel Chatter
    • Back
    • People on the Move
    • New/Changing Channel Programs
    • New Products & Services
    • Industry Honors
  • Resources
    • Back
    • Channel Futures 20: Top Tech Providers
    • Advisory Boards
    • Industry Organizations
    • Our Sponsors
    • Advertise
    • 2023 Editorial Calendar
  • Awards
    • Back
    • 2022 MSP 501
    • Channel Influencers
    • Circle of Excellence
    • DE&I 101
    • Technology Advisor 101 (TA 101)
    • Channel Leaders Lists
  • Events
    • Back
    • 2023 Call for Speakers
    • CP Conference & Expo
    • MSP Summit
    • Channel Partners Europe
    • Channel Partners Event Coverage
    • Webinars
    • Industry Events
  • About Us
  • DE&I
Channel Futures
  • NEWSLETTER
  • Home
  • Technologies
    • Back
    • SDN/SD-WAN
    • Cloud
    • RMM/PSA
    • Security
    • Telephony/UC/Collaboration
    • Cable
    • Mobility & Wireless
    • Fiber/Ethernet
    • Data Centers
    • Backup & Disaster Recovery
    • IoT
    • Desktop
    • Artificial Intelligence
    • Analytics
  • Strategy
    • Back
    • Mergers and Acquisitions
    • Channel Research
    • Business Models
    • Distribution
    • Technology Solutions Brokerages
    • Sales & Marketing
    • Best Practices
    • Vertical Markets
    • Regulation & Compliance
  • MSP 501
    • Back
    • MSP 501 Rankings
    • NextGen 101 Rankings
  • Intelligence
    • Back
    • Galleries
    • Podcasts
    • From the Industry
    • Reports/Digital Issues
    • Webinars
    • White Papers
  • Channel Futures TV
  • EMEA
  • Channel Chatter
    • Back
    • People on the Move
    • New/Changing Channel Programs
    • New Products & Services
    • Industry Honors
  • Resources
    • Back
    • Channel Futures 20: Top Tech Providers
    • Advisory Boards
    • Industry Organizations
    • Our Sponsors
    • Advertise
    • 2023 Editorial Calendar
  • Awards
    • Back
    • 2022 MSP 501
    • Channel Influencers
    • Circle of Excellence
    • DE&I 101
    • Technology Advisor 101 (TA 101)
    • Channel Leaders Lists
  • Events
    • Back
    • 2023 Call for Speakers
    • CP Conference & Expo
    • MSP Summit
    • Channel Partners Europe
    • Channel Partners Event Coverage
    • Webinars
    • Industry Events
  • About Us
  • DE&I
    • Newsletter
  • REGISTER
  • MSPs
  • VARs / SIs
  • Agents
  • Cloud Service Providers
  • Channel Partners Events
 Channel Futures

Cloud


Shutterstock

Microsoft 365

Microsoft 365 Price Increases Now in Effect After Last-Minute Rush

  • Written by Jeffrey Schwartz
  • March 1, 2022
Customers who commit to annual terms receive discounts, but they can’t cancel mid-term.

The Microsoft 365 price increases that the software giant announced last summer are now in effect. Microsoft’s pricelist on Tuesday started reflecting the higher rates, which jumped by 10-20% depending on the plan.

Microsoft alerted partners in August that it planned to raise M365 pricing for commercial customers effective March 1. It’s the first price hike for Microsoft’s core SaaS portfolios since the company released Office 365 nearly 11 years ago. In the months leading to the price increases, partners encouraged customers to lock in the old rates for another year. The increases apply to both new subscriptions and renewals.

Predictably with any price increases, customers will re-assess their needs, while some will just absorb the higher costs. Because of the various M365 and Office 365 plans, partners said customers could downgrade or reduce the number of licenses.

As subscriptions start coming due, look for that process to start accelerating. Complicating matters is the fact that some customers will face higher increases than others, depending on their mix of subscriptions. The new prices in effect for commercial products include:

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

New Customer Experience (NCE)

The Microsoft 365 price increases coincide with the rollout of the company’s New Customer Experience (NCE) seat-based offers promotion. NCE went into effect in January. Under that program, customers can commit to a full year and pay upfront for those subscriptions for a 20% discount. But the caveat is customers can’t cancel those subscriptions in the middle of the year after an initial 72-hour window.

Red River's Frank Lusko“So you’re stuck with whatever you commit to at that point for the entire year,” said Frank Lusko, VP of sales and service at Red River, a Chantilly, Virginia, MSP. Also, organizations that now budget their software as operational expenses may not have the capital to lay out. For large organizations, it could amount to an outlay of hundreds of thousands of dollars or more, Lusko said.

Customers who agree to annual term commitments can pay monthly if they use a Microsoft partner. That partner can pay monthly for the customer. But if the customer stops paying during the term of the contract, the partner is responsible for the amount due.

“We don’t have huge collection issues and we don’t have a lot of customers that go out of business or quit paying, so we’re going to absorb that risk,” said Zac Paulson, CEO Of TrueIT, an MSP based in Fargo, North Dakota. “If it becomes a problem in the future, we will have to figure something out.”

Paulson said he hasn’t heard much backlash about the price increases, but many are questioning the annual commitments.

“The problem, according to every provider I’ve talked to, is really that annual term commitment,” he said. “It’s just not how Microsoft has ever operated before. It’s very, very foreign to us. We all can understand they’ve expanded the platform and we all understand that costs go up. But we’re just not thrilled about the fact that clients have to commit to an annual subscription.”

Microsoft said customers who require more flexibility should stick with monthly plans. Tony Guidi, senior VP of strategic partnerships at Core BTS, said some clients are willing to make that commitment for the price savings.

“We have been working with our clients to move them into NCE before the price increase, so that at least pushes off any price increase for them for another 12 months,” Guidi said.

Last-Minute Rush

A Microsoft promotion that offered partners a 5% discount for submitting NCE annual subscriptions created a last-minute rush. Partners able to transact NCE deals before the price increases took effect also didn’t have to pay the 20% premium.

Paulson said the volume of last-minute deals caused Microsoft’s site for managing the transactions to go down Monday night. Microsoft is now giving those partners until March 14 to transact those deals and take advantage of the incentive. Pax8, TrueIT’s MSP support provider, noted the grace period in an update on Tuesday to its NCE post from November.

Microsoft hopes that it is lessening the blow of the price increases by including Teams calling with most plans. The company said it is adding unlimited dial-in support for Teams meetings with its enterprise, business, frontline and government suites.

“It absolutely softens the blow,” Guidi said. “They were paying for that voice add-on and that gets incorporated into the new license.”

Want to contact the author directly about this story? Have ideas for a follow-up article? Email Jeffrey Schwartz or connect with him on LinkedIn.

 

Tags: MSPs Cloud Service Providers Telephony/UC/Collaboration Cloud Technologies Vertical Markets

Most Recent


  • Making Waves
    7 Channel People Making Waves This Week at AWS, Cisco, Snyk, CrowdStrike, More
    Earlier this year, ServiceNow made a $25 million strategic investment in Snyk. This followed Snyk closing a $196.5 million funding round.
  • AppDirect-TBI, latest channel M&A
    Latest Channel M&A: ReliaQuest, IBM, Broadcom, Amplix, More
    Absolute Software, Procure IT and Qlik were among other companies wheeling and dealing in May.
  • CwCJ with Palo Alto Networks
    Coffee with Craig and James Episode 124: Palo Alto Networks
    Cybersecurity is on the agenda, as we talk threats, channel program and more.
  • Motus talks mobility workforce management on CFTV
    Motus: Partners Grasping Mobile Workforce Management Opportunity
    Motus wraps its experience at CP Expo and explains why partners should consider mobile workforce management.

Leave a comment Cancel reply

-or-

Log in with your Channel Futures account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related Content

  • Top 20 stories
    Top 20 Stories in February: Google Cloud, Microsoft, Dell, More
  • Making Waves
    7 Channel People Making Waves at HPE, Mandiant, Microsoft, More
  • Conversational AI in action
    Microsoft Closes Nuance Acquisition, Plans to Advance Conversational AI
  • Cloud security
    Ermetic Partners Get New Synergia Partner Program for Cloud Security

Upcoming Events

View all

Channel Partners Europe

June 13, 2023 - June 14, 2023

Channel Futures Leadership Summit

October 30, 2023 - November 2, 2023

Channel Partners Conference & Expo

March 11, 2024 - March 14, 2024

Galleries

View all

7 Channel People Making Waves This Week at AWS, Cisco, Snyk, CrowdStrike, More

June 9, 2023

Latest Channel M&A: ReliaQuest, IBM, Broadcom, Amplix, More

June 9, 2023

Images: Channel Partners Conference & Expo Best in Show Awards

June 9, 2023

Industry Perspectives

View all

Identity Is Increasingly Valuable – and Targeted

May 18, 2023

Gaining a Competitive Advantage through AV Managed Services

May 10, 2023

How to Build an Organization That Attracts and Retains Talent

May 1, 2023

Webinars

View all

From Problem to Profit: Mastering the Science of Selling Using Business Outcomes

May 9, 2023

Meet the 2023 Channel Futures Channel Influencers

April 13, 2023

DE&I Dialogue: How the Right DE&I Initiatives Can Propel Your Business

April 5, 2023

White Papers

View all

6 UCaaS Reseller Challenges and How Real World Businesses Solved Them

February 1, 2023

Frost Radar: North American UCaaS Market, 2022

February 1, 2023

The Complete Guide to White-Label UCaaS for Reseller Success

February 1, 2023

Channel Futures TV

View all

Coffee with Craig and James Episode 124: Palo Alto Networks

Motus: Partners Grasping Mobile Workforce Management Opportunity

June 9, 2023

Coffee with Craig and James Episode No. 123: MartinWolf M&A Advisors, CP Expo Preview

April 24, 2023

UScellular Takes On Rivals with Partner Program Simplicity

April 21, 2023

Twitter

ChannelFutures

Channel people making waves include @mnair1, @George_Kurtz, @mike_at_vulcan, @jzoblin, @jpatel41 and more.… twitter.com/i/web/status/1…

June 9, 2023
ChannelFutures

.@motusdotcom wraps its #CPExpo experience, talks mobile workforce management opportunity in the channel.… twitter.com/i/web/status/1…

June 9, 2023
ChannelFutures

Find out why #companyculture is significant when planning a merger or #acquisition. dlvr.it/SqR4ks https://t.co/gAUxiEW4yE

June 9, 2023
ChannelFutures

Great conversation with @Tom_D_Evans of @PaloAltoNtwks talking #cybersecurity, channel, more.… twitter.com/i/web/status/1…

June 9, 2023
ChannelFutures

The latest channel M&A includes @ReliaQuest, @IBM, @Broadcom, @AmpliXIT and more. dlvr.it/SqQntD https://t.co/DektC1Xmz9

June 9, 2023
ChannelFutures

Find out why everyone is talking about generative AI and cloud in this exciting new article >>… twitter.com/i/web/status/1…

June 9, 2023
ChannelFutures

In just 4 days, #ChannelPartners will come together in #London for #ChannelEurope. Professionals from the IT & Tele… twitter.com/i/web/status/1…

June 9, 2023
ChannelFutures

Kicking off a multi-part series, get the inside scoop on what changes are taking pace in the channel. In this galle… twitter.com/i/web/status/1…

June 8, 2023

MSP 501

The industry's largest and most comprehensive partner awards program.

Newsletters and Updates

Sign up for The Channel Report, Channel Futures Update, MSP 501 Newsletter and more.

Live Channel Events

Get the latest information on the next industry-leading Channel Partners event.

Galleries

Educational slide shows and images from live events.

Media Kit And Advertising

Want to reach our audience? Access our media kit.

DISCOVER MORE FROM INFORMA TECH

  • Channel Partners Events
  • Telecoms.com
  • MSP 501
  • Black Hat
  • IoT World Today
  • Omdia

WORKING WITH US

  • Contact
  • About Us
  • Advertise
  • Newsletter

FOLLOW Channel Futures ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookie Policy
  • Terms
Copyright © 2023 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.
This website uses cookies, including third party ones, to allow for analysis of how people use our website in order to improve your experience and our services. By continuing to use our website, you agree to the use of such cookies. Click here for more information on our Cookie Policy and Privacy Policy.
X