News

Microsoft Announces Price Hikes for Office 365 and Microsoft 365

• By Kurt Mackie
• August 20, 2021

Higher subscription costs are coming to Office 365 and Microsoft 365 business users next year.

Microsoft announced Thursday that it plans to raise the per-user, per-month subscription costs for all business plans -- except for the Microsoft 365 E5 plan -- starting March 1, 2022. The price hikes will vary per plan. The Microsoft 365 E3 plan will have the highest increase, up an extra $4 per user per month.

Only business subscribers will be affected by this round of price increases. Microsoft said in its announcement it isn't changing the costs for education and consumer products users "at this time."

Here are the specific cost increases coming in March for Office 365 and Microsoft 365 business subscribers:

• 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), and
• Microsoft 365 E3 (from $32 to $36).

The price increase was described as "the first substantive pricing update since we launched Office 365 a decade ago." Microsoft had added 24 apps since launch, along with 1,400 new features.

Microsoft previously announced back in February that users of the "perpetual-license" Office products (Office Professional Plus, Office Standard and individual apps) would get a 10 percent price hike with the next product release, along with a cut in product support by five years. Perpetual licensees buy the product once instead of subscribing, and they don't get the new features that the subscription-based licensees receive.

Microsoft's price hike announcement also described plan changes with respect to the Teams Audio Conferencing capability. Microsoft will add Audio Conferencing with "unlimited dial-in capabilities" to more subscription plans than just the current Microsoft 365 E5 and Office 365 E5 plans. This Audio Conferencing feature addition will arrive "over the next few months" for users of the "enterprise, business, frontline and government suites," Microsoft indicated.

Audio Conferencing is a feature just for people who start meetings. It lets them use their phone to do so. It's conceived as a perk for those occasions when people might be on the road and without the bandwidth for a Teams session.

Microsoft had offered a one-year free trial of Audio Conferencing to Teams users back in Sept. 2020, and was still promoting that offer in 2021. Audio Conferencing is getting added to plans other than E5 because "we have come to see dial-in as an important part of the complete Teams experience," the announcement explained.