Microsoft 365 Price Change Announcement

Microsoft 365 Pricing Update

Microsoft has announced a 5% price increase for all Microsoft 365 licences, effective 1 April 2025. This adjustment impacts all monthly billing plans for annual subscriptions and is part of Microsoft’s effort to align pricing structures across all purchasing platforms.

 

What’s changing?

Starting 1 April 2025:

  • Monthly billing plan costs: Monthly billing plans for annual subscriptions will increase by 5% compared to the annual billing option.
  • Standardised pricing: This adjustment standardises Microsoft’s billing structure across all platforms.
  • Switching to annual billing: Customers can opt for annual billing at their next renewal date to maintain the lower price.

 

Impact on customers

  • Monthly billing increases: Staying on a monthly billing plan will result in a 5% cost increase.
  • Annual billing advantage: By switching to annual billing before your renewal date, you can lock in the current pricing and avoid the increase. Although annual billing requires upfront payment, it ensures price stability for the subscription term.

 

Who will be affected?

  • All Microsoft 365 customers: Businesses and organisations using Microsoft’s cloud-based services, such as Teams, Power BI Pro, and Enterprise Mobility and Security.
  • Monthly billing customers: Organisations on monthly billing plans for annual subscriptions.
  • Charities: Free licences remain unaffected; however, paid licences will see the 5% increase.

 

How to avoid the price increase

To minimise the impact of this change, we recommend transitioning to an annual billing option before 1 April 2025. This allows you to:

  • Lock in existing pricing.
  • Ensure cost predictability for the year ahead.
  • Protect against the 5% increase for the duration of your annual term.

While annual billing requires upfront payment, it is an effective way to avoid the slight price rise associated with monthly billing plans.

 

Exchange rate adjustments

Please note that Microsoft has also announced a global alignment of its Cloud product pricing to reflect local currency exchange rates against the US dollar. Initially, it was anticipated that these semi-annual reviews would occur in April and October.

However, the next adjustment is set to take effect on 1 February 2025, with a reduction in GBP pricing for Cloud products ranging between 5% and 6%. This decrease will not apply to on-premise pricing.

 

Next Steps

We understand that this pricing update may cause concern, but it is important to reiterate that Microsoft is implementing this change globally, affecting all partners and customers. Our team is here to support you in finding the most cost-effective solution for your organisation.

For more details, refer to the official article from Microsoft: Flexible Billing for Microsoft 365 Copilot; Pricing Updates for Annual Subscriptions and Teams Phone.

If you have any questions or need further clarification, please don’t hesitate to reach out to your Account Manager.