8 things to know about Microsoft’s price increases

Beginning March 1, 2022, Microsoft will change its licensing model

Microsoft is increasing its prices, and switching to a new licensing model change will impact every business user, so you must understand your options in the future. True IT is here to help you navigate these waters. Here is what you need to know.

Microsoft announced this change on August 19, 2021

Microsoft New Commerce Experience: Evolving Licensing

Microsoft will sell subscription licenses to businesses through the new commerce experience in 2022. Previously, Microsoft 365 and Dynamics 365 were offered as per-user licenses, but they are now sold by seat. The per-seat license allows a single user to utilize the licenses on as many devices as they choose. Azure subscriptions have also been altered to be packaged into a single plan. As a result, subscriptions purchased under the old subscription model must migrate to the new Azure Plan.

Change 1 – Fee Increases

Microsoft is increasing its license pricing beginning March 1, 2022. But given the rising price of goods and services in the economy, it’s unlikely that Microsoft’s announcement comes as a great surprise.

Microsoft is allowing the opportunity for everyone to lock their current pricing in for a 12- or 36-month term. However, if you decide that a long-term agreement isn’t for you, there’s some additional information you need to know. Microsoft has stated that not only will month-to-month licensees receive the impending 15-20% price increase, but they will also receive an additional 20% premium increase. This additional premium means you could end up paying 40% more than what your current rates are!

 Change 2 – License Management Changes

Microsoft is also shifting its licensing management model. Currently, subscribers can add or reduce licenses at any time. After March 1, 2022, Microsoft will allow partners like True IT to add licenses at any time but will be permitted to reduce your quantity of licenses only at renewal. This licensing model is commonplace among Software as a Service (SaaS) companies. However, if your workforce fluctuates seasonally and you’re concerned about not decreasing licenses as needed, Microsoft has afforded you an alternative option. From now on, you will be able to maintain a combination of both annual and month-to-month licenses.

8 things to know about Microsoft’s price increases – FAQ

Q: Will my prices increase?

A: Yes, Microsoft is raising the price for everyone by 15 – 20% beginning on March 1, 2022.

Q: Can I still go month-to-month?

A: Technically, yes, but you will be subject to the 15-20% price increase PLUS an additional 20% premium increase. This choice means you could end up paying 40% more than you are paying now!

Q: Can I lock in my current pricing before the increase?

Yes, you can lock in your current pricing for a term of either 12 or 36 months. These terms mean you won’t see the increase you’re locked in for the entire time.

Q: If I upgrade some or all of my licenses, will a new 12- or 36-month term begin?

A: No, the new licenses will be co-termed to your original subscription renewal date.

Q: If I lock in my pricing now, will I be able to add or decrease the number of licenses as my team fluctuates?

A: You can add new licenses, but they won’t get the exact “locked-in” pricing you agree to upfront. On the flip side, once you specify the number of licenses for the upfront pricing, you cannot decrease that number.