Navigating the March 2022 Microsoft Price Increase

After March 1st, you may notice an increase to your bill for your Microsoft Office subscriptions purchased through Thrive or elsewhere – a change you’ll be familiar with if you tuned in to our webinar on the topic. As Microsoft moves away from their cloud-based service provider (CSP) model to the updated New Commerce Experience (NCE), these price changes affect monthly costs for their six “Modern Workspace” plans while also establishing three subscription tiers: monthly, yearly, and three-year terms. Additionally, flexible plan changes such as seat decreases during the plan term, seat plan downgrades, and even Microsoft partner swapping will come at a premium under the higher-priced monthly plan offered under the new NCE. 

Microsoft Subscription Model Updates

Microsoft is now offering three subscription models under NCE- monthly, annual, and three-year terms. The details of the three-year plans have yet to be released, but what we do have are the details of the monthly and one-year plans, as described below.

Price Increase

Subscribers to monthly plans who did not opt into a yearly plan prior to March 1st will see a several dollar per-seat price hike on their next invoices. Those who committed to  annual subscriptions prior to March 1st won’t notice any difference in their bill for the next 12 months. 

Monthly costs for the six Modern Workspace plans will change as follows:

Office 365 E1: $8 $10

Office 365 E3: $20 $23

Office 365 E5: $35 $38

Microsoft 365 Business Basic: $5 $6

Microsoft 365 Business Premium: $20 $22

Microsoft 365 E3: $32 $36

Plan and Seat Downgrades

Under the CSP model, yearly commitment users had the ability to downgrade seat plans and even reduce the number of seats they held on a month-to-month basis. Under the NCE plan, yearly or three-year committed seats are not eligible for downgrades or reductions. The ability to freely remove seats and downgrade subscriptions during the plan period is still an option available under a monthly plan, but it comes at a 20% premium.

What Do I Do Next?

If you missed the window of opportunity to lock in your current pricing, don’t panic. While there is no way to reinstate the lower pricing your organization enjoyed previous to this month’s price hike, you do have time before your plan renewal period (or before July 1st, whichever is sooner) to strategize and decide what’s best for your business. If your organization has a relatively stable number of users throughout the year, it might be best to choose a plan(s) for those seats and commit to a yearly contract through the NCE – that way, you will be protected in the event of any future increases or plan changes that happen throughout the year. If your organization has a seasonal influx of workers, it may make sense to keep a portion of your seats on a monthly plan – while the flexibility associated comes at a premium, it wouldn’t make sense to pay for those seats for an entire year when they’re only utilized for a few months. Here are the key dates to keep in mind as Microsoft moves all users to NCE plans:

March 10th: All new subscriptions must be NCE Monthly, Annual, or Three-Year Terms

June 30th: Last day to renew CSP subscriptions for a maximum of 12 months

July 1st: All renewals of existing subscriptions must be done with an NCE plan. 

Your Trusted Microsoft CSP

Thrive knows that budgets are tight, but access to Microsoft’s software and services is vital to the success of your company. Thrive’s team of experts is here to help you navigate these plan changes and price increases to choose the combination of subscriptions that works best for you. Contact us today.