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Top-Tier Office 365 Subscription Pricing Set at $420 per Year

The top-tier SKU of Office 365, which Microsoft executives have estimated will open up tens of billions of dollars in greenfield opportunities, will cost $420 per user per year when it goes on sale Dec. 1.

Microsoft released pricing Monday on Office 365 E5, which replaces E4 as the top suite, with significantly more capability and a price tag nearly 60 percent higher than E4 (see the chart below). The new E5 suite also costs 75 percent more than the Office 365 suite's workhorse enterprise SKU, E3. On a per-user per-month basis, E5 costs $35, E4 is $22 and E3 is $20. E4 will continue to be available until the end of Microsoft's fiscal year in June 2016.

[Click on image for larger view.] Source: Microsoft

With the Dec. 1 availability, Microsoft squeaks by on a promise to offer E5 in calendar year 2015. Unveiled at the Microsoft Worldwide Partner Conference in July, E5 adds cloud-based calling and conferencing, business analytics and advanced security capabilities to Office 365.

"We think what that does is more than double the available market for Office 365," said John Case, corporate vice president of Office Marketing for Microsoft, in an interview at WPC. "The number that I put on the slide [in a WPC keynote] was a $56 billion addressable market. We think we're less than half that today with services like e-mail and the Office client."

Microsoft CEO Satya Nadella also used a $50-billion-plus figure in a call with financial analysts in describing the E5 opportunity a week later.

Case at the time promised E5's pricing would be aggressive relative to individual components. He cited Power BI as a $10 per user per month product, while arguing that Advanced Threat Protection, Lockbox and Web conferencing will compete with products that other vendors charge a lot of money for.

"When you add all that up, we'll be able to give a significant advantage to those that buy from one vendor for something like E5," Case said in the interview.

Exclusive to E5 among the Office 365 subscriptions are Equivio Analytics for eDiscovery, secure attachments and URLs, access control, Power BI Pro, Delve Analytics, and, via Skype for Business, both Cloud PBX and PSTN Conferencing.

A new feature set that E5 and E3 now share is archiving, rights management, data loss prevention and encryption. Meanwhile, E1, E3 and E5 all now have several new social and collaborative features, including Skype Meeting Broadcast, which allows virtual meetings via browsers and devices for up to 10,000 attendees.

Microsoft is also now offering PSTN calling as an enterprise plan add-on for $12 per user per month for domestic-only calling plans or $24 per user per month for domestic plus international calling.

Posted by Scott Bekker on November 30, 2015 at 1:53 PM


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