What Changed and How Does it Impact You?

The Latest Microsoft Updates

The Latest Microsoft Updates – What Changed and How Does it Impact You?

Microsoft recently announced two significant changes that have an impact on most of its customers. First, the commercial pricing for some Microsoft cloud products will increase. The second important update is New Commerce for CSP seat-based offers. New Commerce introduces several significant changes to the existing CSP program. Both these changes will be effective on March 1, 2022, which allows you enough time to understand how your company may be impacted and to research your options.

Microsoft Price Increase – Why, When & How Much?

According to Microsoft, while Office 365 has grown to over 300 million commercial paid seats, there has been no substantive price update since Office 365 was launched. The only changes that Microsoft has made in the past few years were related to conversion rates. Therefore, the new price reflects the increased value Microsoft delivers to its customers.

On March 1, 2022, Microsoft will update the pricing for the following commercial products:

Product Price Update - $ Price Update - %
Microsoft 365 Business Basic From $5 to $6 per user 17%
Microsoft 365 Business Premium From $20 to $22 9%
Office 365 E1 From $8 to $10 20%
Office 365 E3 From $20 to $23 13%
Office 365 E5 From $35 to $38 8%
Microsoft 365 E3 From $32 to $36 11%

Increases will apply globally with local market adjustments for certain regions. There are no scheduled changes to pricing for M365-E5, Education and Consumer Products (at this time).

Microsoft New Commerce (CSP)

In addition to the price increase as stated above, Microsoft will introduce several significant changes to the existing CSP program, specifically New Commerce for seat-based offers including Microsoft 365, Dynamics 365, Power Platform and Windows 365. This includes the following changes:

  • Introduction of annual term subscriptions that will offer price stability
  • Introduction of premium priced monthly term subscriptions that offer true flexibility to increase & decrease monthly
  • Mid-term subscription upgrades with automatic seat assignment
  • Multi-year billing plans that will provide flexibility and long-term price stability
  • A stricter cancellation policy that will make purchase decision more permanent

The most significant change is that the annual term subscription cannot be decreased any longer.

Customers who are using the CSP model to increase and/or decrease subscription amounts on a monthly or even daily basis have one of two options:

  1. They will need to change to the monthly premium offer, increase of 20% or
  2. They will need to subscribe for the annual term against the normal pricing.

The current CSP model will be available to new and existing customers through February 2022. Although the New Commerce model is launching on October 1, 2021, customers will not be required to move to New Commerce until March 1, 2022.

How SoftwareONE can support

Depending on the contract selected, there are several strategies to make the initial price increases more favorable. There is an opportunity to reevaluate the options to look at product/service bundles with SoftwareONE to offset price hikes, and lastly that evaluating contracts for the right balance of stability and flexibility can be done. SoftwareONE as your Microsoft expert partner is currently analyzing what this means for you, the CSP customer, and will be providing information, educational webinars and free consultations for you to look at your options.

Reevaluate Your Options to Make the Best of Microsoft Changes

Depending on which contract you select, there are a few strategies to make the initial price increases more favorable. Do you want to find out which one is the best for you?

Learn more

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Chris van der  Zwan

Chris van der Zwan

Western Europe Business Owner

Microsoft Advisory Services

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