Effective 1st April 2025, Microsoft will implement a 5% price increase on all Microsoft 365 licenses. This adjustment affects monthly billing plans for annual subscriptions, aiming to standardise pricing structures across all purchasing platforms.
It’s important to note that this change is being implemented directly by Microsoft and applies universally to all customers, partners, and resellers worldwide. Unfortunately, this adjustment is beyond our control.
Understanding the Changes
These products will experience a 5% price increase for monthly billing plans on annual subscriptions, effective April 1, 2025.
- Microsoft 365
- Office 365
- Enterprise Mobility + Security
- Windows 365
- Dynamics 365 Services
- Power Platform
- Teams Phone Standard
- Power BI Pro
- Power BI Premium Per User
Additionally, standalone licenses for Teams Phone Standard, Power BI Pro, and Power BI Premium Per User will see price adjustments starting on the same date.
Billing Structures:
- Monthly Billing for Annual Subscriptions: Starting 1st April 2025, monthly billing plans for annual subscriptions will incur a 5% price increase compared to annual billing options.
- Annual Billing: Opting for annual billing allows you to lock in current pricing, avoiding the upcoming increase and providing cost predictability for the year ahead.
Who Is Affected by the Microsoft 365 Price Adjustment?
- All Microsoft 365 Customers: This includes businesses and organisations using Microsoft’s cloud-based services, such as Teams, Power BI Pro, and Enterprise Mobility + Security.
- Monthly Billing Customers: Organisations currently on monthly billing plans for annual subscriptions will be affected by the pricing adjustment.
- Charities: While free licences will remain unaffected, paid licences will see the 5% increase.
Implications for Your Business
- Increased Costs: If you continue with monthly billing for annual subscriptions, expect a 5% increase in your Microsoft 365 licensing costs starting 1st April 2025.
- Opportunity to Save: Switching to annual billing before the price adjustment takes effect can help you avoid the increase and provide financial stability through predictable, upfront payments.
Why Is Microsoft Implementing This Change?
Microsoft aims to standardise its billing structure across all platforms, ensuring consistency and transparency. This adjustment is part of Microsoft’s broader strategy to align pricing globally and continue delivering value through its services.
Benefits of Switching to Annual Billing
- Cost Savings: Annual subscriptions often come with discounts compared to monthly payments, saving your business up to 20% over the course of a year.
- Budget Predictability: With a single annual payment, you can simplify financial planning and avoid monthly fluctuations in expenses.
- Simplified Licence Management: Annual commitments reduce the administrative burden of monthly renewals, allowing your IT team to focus on strategic initiatives.
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*Prices listed are indicative and subject to change; please contact us for the latest details.
How to Avoid the Price Increase
To minimise the impact of the upcoming price increase, consider transitioning to an annual billing option before April 1, 2025. By doing so, you can:
- Lock in Existing Pricing: Secure current rates before the increase.
- Achieve Budget Stability: With a single annual payment, you can simplify financial planning and avoid monthly fluctuations in expenses.
- Avoid the 5% Price Hike: Protect your organisation from the impending increase for the duration of your annual term.
While annual billing requires upfront payment, it is an effective way to maintain your current pricing and avoid the impending price adjustment.
What’s Next?
- Review Current Subscriptions: Assess your existing Microsoft 365 licences to determine which plans are on monthly billing for annual terms.
- Consider Switching to Annual Billing: Transitioning to annual billing before 1st April 2025 allows you to maintain current pricing and avoid the 5% increase.
- Plan for the Transition: Coordinate with your IT department or managed service provider to ensure a smooth switch to annual billing.
Final Thoughts
While this price adjustment is mandated by Microsoft and beyond our control, proactive steps can help mitigate its impact on your organisation. By reviewing your current licensing agreements and considering a shift to annual billing, you can maintain cost efficiency and budget stability.
If you’d like to learn more about how these changes may impact your business, our experts are here to help.
Contact Us
Feel free to reach out to us at accountmanagement@totalgroup.co.uk for personalised advice and assistance with your Microsoft 365 licensing needs.
