“From 1st April 2025, Microsoft will be increasing the prices for the Annual Subscription / Monthly Billing model by 5%.“
Back in November, Microsoft announced some increases to their pricing which will come into effect on 1st April 2025. In anticipation of this structure we’re giving advance notice of how we’ll align our pricing from that date, and how we’re also aligning the agreement and billing terms for our customers.
Before we dig in to the price increases, lets just restate the three ways you can currently purchase and pay for the most commonly used Microsoft 365 subscriptions:
Monthly Subscription / Monthly Billing – A rolling monthly contract where the number of licences you have (and the price you pay) can go up or down each month. This is the most flexible option, but the licences cost more than an annual commitment, and you can be exposed to price increases more quickly than you would be were you in an annual subscription.
Annual Subscription / Monthly Billing – An annual contract where the number of licences you have (and the price you pay) is fixed to a minimum for a 12 month period. For example you can start out with 10 licences, and will need to pay for those licenses for a whole year at the same price even if you don’t need them all. You can also increase the number of licences during the 12 month period (and pay extra pro-rata), but cannot downgrade until the end of the 12 month term – i.e it’s a ratchet clause. Even though you are committed for a the 12 month period, you can be billed monthly.
Annual Subscription / Annual Billing – An annual contract where the number of licences you have (and the price you pay) is fixed to a minimum for a 12 month period. This can also be upgraded as described above, and are committed for a the 12 month period, but are billed for the whole 12 months in advance.
So, what’s changing?
From 1st April 2025, Microsoft will be increasing the prices for the Annual Subscription / Monthly Billing model by 5%, leaving the pricing on the other billing models the same; this is effectively discouraging use of the Annual Subscription / Monthly Billing model and getting customers to switch either to a monthly subscription model or pay up front for the next 12 months worth of services.
As a result of this change, from 1st January 2025, we will no longer offer the Annual Subscription / Monthly Billing model which puts the financial risk of agreements onto us, rather than Microsoft. If you have a subscription like this you’ll be able to convert this to Monthly / Monthly or Annual / Annual, or a mixture of the two.
From the 1st April 2025, we’ll be aligning our prices for Microsoft 365 services with the official RRP. Our current prices are little different to the RRP (some slightly below, some slightly above) , but we’ll track the Microsoft RRP. We make very little money on Microsoft 365 licences (sometimes less than 50p!) and so it doesn’t make sense to differ. The actual prices you pay will be published in the User Success Centre early next year.
Of course, customers who are using alternative solutions such as Zimbra or Hosted Exchange remain unaffected, as do qualifying Non Profit Customers who benefit from FREE Microsoft 365 licences. See the Community Technology Programme for more details.
Remember too that if you are using Microsoft 365 services, you can save cash by ditching Microsoft Teams – see our recent article: New Cost-Effective Microsoft Licensing Options Following EU Ruling