Posted by in Business, Office 365 on

As previously advised in this newsletter, SpireTech has been tracking Microsoft’s upcoming price increases.  There are two types of increases, and effective dates for these increases.

The first price increase is effective March 1, 2022 affects six popular M365 packages listed below:

PackageOld PriceNew Monthly Term PriceNew Annual Term Price (Billed annually x 12)
Microsoft 365 Business Basic$5$7.20$6
Microsoft 365 Business Premium$20$26.40$22
Office 365 E1$8$12$10
Office 365 E3$20$27.60$23
Office 365 E5$35$45.60$38
Microsoft 365 E3$32$43.20$36

The second price increase takes effect July 1, 2022 and is a 20% increase to all packages with a monthly term and payment.  In part, this increase is due to a change in contract term enforcement behavior with Microsoft.  Until now, it was widely practiced in the industry to use the annual discount price (billed monthly) and allow customers to change/cancel/downgrade their subscriptions without penalty.  Moving forward, Microsoft is enforcing annual terms on customers that select this option and early terminations will not be allowed.

Therefore, SpireTech will move customers currently paying monthly to the new monthly rate – in general, this represents a 20% increase across all subscription types.  Clients wishing to receive the Microsoft annual discount must pay annually and will need to contact us to select this plan, effective date, and contract term.  Annual payments, which may be substantial, will need to be paid prior to the invoice due date.

Annual licenses are “locked in” and cannot be reduced in quantity during the contract term, but can be increased in quantity.  Monthly accounts can be increased or decreased at will on full-month boundaries (no pro-rates are given for partial months).  However, you can mix and match both types of licenses for maximum flexibility.  For example, if you have a stable headcount and only a few temporary employees, you might select annual terms for your stable level of employees and monthly for your temps.

There are a few more “gotchas” with annual terms that make them less appealing:

  1. Annual renewals are automatic.
  2. There is only a 72-hour window for changes at your anniversary renewal to decrease or cancel.
  3. You cannot change your Microsoft Cloud Service Provider (CSP) during the annual term.
  4. Honest mistakes will not be tolerated, and met with inflexible and unforgiving financial liability.

For the above reasons, we are recommending monthly terms for most clients. Customers using these packages will notice an increase on their statements for the dates listed above.  We may issue a prorate if necessary to capture the increase.  Thank you in advance for understanding.