Microsoft 365 has set a standard of modern work including many modules over the years — now, Microsoft announced a new pricing for the various plans.
„The market is saturated and the obvious is going to happen“ may be the first thought of many reading this announcement. After Microsoft 365 and especially tools like Microsoft Teams lead us through some stages of COVID 19-related home office-slots, it is hard to imagine a modern workplace without Redmond’s suite of applications. Users and enterprises are dependent from the recurring services and after being adopted from and to the Cloud, taking the emergency exit is a quite difficult task. Does Microsoft now milk the paying customers, using the collaborative power behind Microsoft 365? While many will answer with „Yes“, there is always the other side of the coin.
The reverse of the medal
Personally my answer would be „No“ — users are dependent now but considering that this is the first change to commercial pricing for Microsoft 365 after ten years, we shouldn’t judge too fast. The world has changed (not just with COVID) and the IT has changed, too: Of course paying customers rent software and services on a recurring, mostly monthly basis — exiting this scenario is quite difficult and often just doesn’t make sense. While monthly payments are made, there is no invest in on-premises hardware, electricity, administrative tasks or local backups: Microsoft also takes care of this and while even these services must be administrated somehow, the model of shared responsibility addresses the whole service platform to Microsoft on behalf of the customer’s needs.
Now, ten years after launching Office 365 and even some years before I had the first gaze on Exchange Online as part of the Microsoft Online Services, customers are now facing the first updated pricing in this time and, according to Redmond, reflects the increased value Microsoft believes to have delivered to its customers over the past ten years. Over 300 million commercial paid seats deliver a solid customer-base that also needed Microsoft to continuously re-invest into its platforms to further meet the constantly changing needs of the customers. To sum it up, Redmond states that, since introducing Microsoft 365, it has added 24 apps and released over 1400 features and capabilities in the three key areas.
Communication and Collaboration
Even if I still dislike the Electron-packed performance of Microsoft Teams which still feels a little alien even on Windows-systems, Teams is the tool that had — without a doubt — the biggest triumphal procession of all apps of its kind during the last two years: It helped me and our company to keep contact with each other, collaborate and talk with customers we couldn’t visit in person. Surely one of the biggest profiteer of the pandemic, 250 million active users work with Microsoft Teams month by month. Being launched in 2017 and maturing month by month, there is still a way to go from the software-side (I am curious how the integration in Windows 11 will look like) but Microsoft Teams has, in my eyes, set a new standard — wether you like it or not. Various plugins, third-party-services and a full integration into SharePoint and OneDrive brought the solution nearly full circle and there are more features to come!
Security and Compliance
„With great power comes great responsibility“: Moving on-premises workloads into the Cloud must always match the same grade of security you would assume in a local deployment — or an even better one. Therefore, the cybersecurity landscape is more complex than ever. With all the technical acceleration, increasing number of cyberattacks and cloud-only-scenarios, new vectors for defense must compete with the new standards and needs in terms of security and compliance. Microsoft 365 has, for example, capabilities like data loss prevention (DLP) for E-Mails and documents, sensitivity labels (Azure Information Protection) or message encryption to help keep important data within the organization. Features like Content Search, eDiscovery and core Litigation Hold were implemented, too, while a built-in mobile device management and other management tools like Microsoft Endpoint Manager were created to help administrators to support the growth of remote and hybrid workforces.
AI and Automation
Over the past decade, many aspects have changed and so did the field of Artificial Intelligence (AI) that, for example, is being used to schedule focus time based on our behavior in terms of E-Mails and Calendars. AI helps to save times just by seeing that, with a meeting of 30 minutes instead of 60, many people can be more productive by using the spare time for other projects. Getting in line as well, Cloud-powered AI now automatically creates maps, charts and tables in Excel, sorting E-Mail and removes clutter in Outlook. Additionally, AI-powered real-time translation, captions, and transcription make collaboration and communication more accessible and engaging for everyone.
The pricing changes Microsoft announced on August 19th will go into effect in six months. On March 1, 2022, the list pricing for the following commercial products will be updated as follows: Microsoft 365 Business Basic (up from $5 to $6 per user), Microsoft 365 Business Premium (from $20 to $22), Office 365 E1 (from $8 to $10), Office 365 E3 (from $20 to $23), Office 365 E5 (from $35 to $38) and Microsoft 365 E3 (from $32 to $36). These increases will apply globally with local market adjustments for certain regions outside the US. As for now, there are no changes to the pricing for education and consumer products at this time so the Educational A-plans or Microsoft 365 Home/Family won’t be touched at the time of writing.
In my humble Opinion…
Summarizing all elements of this announcement, the new pricing may offend many users, implying that Microsoft now tightens the reins after a solid user base has been created. Does Redmond now take advantage of its SaaS-monopoly? Personally I think „No“ as, by all means, this impression may appear but looking at the development of the last years without any pricing change in harmony with constantly-increasing features, this move was — love it or not — long overdue. Microsoft 365 is a symbiosis of many great tools and the bargain comes with each additional service you use: In my case, I am not only using Exchange Online, Microsoft Teams or OneDrive but also the Office-desktop apps on various devices and even Power Automate — and with the possibilities given, the new pricing is something I can live with.
Of course, everything depends on your use case and once you just need any desktop app and no singe Cloud-service, Microsoft 365 may be the wrong product for you anyway. In my eyes, ten years of improvement and constant development now come with a justifiable pricing change and unless this happens every year now, I’m fine fine with it. Depending on your organization and use case, the impact on your monthly bill will (of course!) be different and I’m looking forward to the discussions with current customers which are about to happen.
The value-for-money ratio is, anyway, still okay for me — how do you see Microsoft’s latest announcement? Feel free to leave your comments!