As the economy recovers, demand for numerous commodities is outpacing supply, pushing up prices of goods like building materials, power, semiconductors, and food products. Subscriptions to Office 365 will soon go into this list.
In August 2021, Microsoft announced that its Office 365 offerings will be rising in price by up to 20%. This move will affect consumers irrespective of their yearly or monthly subscription to Office 365. However, those who choose monthly subscriptions will be subject to an extra Microsoft levy, which appears to be geared towards encouraging people to go with the annual option.
While larger firms have profited from huge discounts and bargains over the last decade, small businesses will suffer the effects of a price hike as the economy picks up from the pandemic. Still, Microsoft has incorporated OneDrive, Microsoft Teams, and SharePoint, among more than 20 applications since inception.
Those who wish to keep Office 365 on a month-to-month basis will face a 20 percent price increase, which means an extra charge atop the original cost increase. According to internal Microsoft paperwork seen by CNBC, Microsoft will require subscription fees even if a customer wants out in the middle of a term.
Office 365 has grown to exceed 300 million corporate paying customers since its inception a decade ago. Microsoft has continually re-invested to satisfy their consumers' shifting needs; they created Microsoft 365 four years ago to combine the finest of Windows, Office, and Mobile Computing and Security combined. That same year, Microsoft introduced Microsoft Teams as the only comprehensive solution that allows you to connect, chat, phone, cooperate, and automate enterprise processes as you go along.
According to the CNBC report, many businesses are unhappy with the scenario and its repercussions for customers who desire or need the freedom of monthly subscriptions. According to CNBC reporting, as a direct consequence of the price hike pushback, partners have had "heated discussions" with Microsoft.
The challenge is whether the price spike will be enough to lure existing and potential users to Google's productivity package. Another danger Microsoft has is scaring off prospective cloud clients who see how the business is managing its pricing structures and don't seek to risk being impacted due to the rise.
However, one thing is obvious: Microsoft is attempting to persuade businesses to spend more to save more, as price increases on full-feature (and more pricey) packages will be lesser, narrowing the cost differential between Office 365 and Microsoft 365 raising the appeal of higher support levels.
Because purchasers may often get attractive offers from sales personnel shortly before Microsoft's fiscal year ends, June is a preferred month to renew or update Microsoft contracts. However, you risk running out of time if you wait until the pricing list adjusts on March 1 to start negotiating.
Even organizations who have just extended a three-year contract with Microsoft should factor the price rise on their agenda for their next meeting with Microsoft to let them know they will be seeking a better deal.
Some businesses have secured price safeguards for renewal terms in their contracts, regulating how providers can raise prices. Regrettably, most businesses lack such safeguards, meaning, when their present negotiated bargain expires, they'll face the twin blow of a revert to list price — plus a rise in that list price.
However, pricing will not be the first topic of conversation. Microsoft will most likely start by discussing all of the additional applications and utilities it has introduced to Microsoft 365 over the ages, as it did in its blog entry on the adjustments.
Microsoft has leveraged its additional and richer features on the price hike. Pushback in negotiating requires thorough, precise data regarding the features your company employs. In every subscription, emphasize that your business observes what each person utilizes at a feature level. However, it's a lengthy process, with many companies beginning it a year before their contract ends. So, ensure you start early.
You need an unassailable indication of defection to raise in negotiations with Microsoft, and while some people believe Office is an inescapable expense of running a business, there are substitutes. Numerous desktop replicas are available, including open-source bundles like LibreOffice, where enterprises can select their own service provider.
There are cloud-based options as well: the most well-known is Google Workplace (previously Google Docs and G-Suite), but there are more. Zoho's productivity applications, CRM, service desk, accountancy, and other enterprise solutions. Salesforce is also involved in this field: It has integrated Quip's features within its CRM solution, allowing salespersons to no longer depend on a separate productivity package.
However, the biggest leverage you have is not shifting your desktop expenditure away from Microsoft but switching your other spending away from Microsoft — for instance, shifting clouds or pitting Microsoft's OneDrive against Dropbox or Egnyte.
Use the Microsoft 365 Online Edition
The online platform is available for free. Using the free version saves money but may not be a great fit for businesses seeking to grow.
Try Out Standalone Office Applications
Standalone applications are a possibility but could be inadequate for companies looking to innovate and start out on their digitization path.
Identify a Cost-Optimization Partner
Collaborating with a partner is the greatest way to cut IT costs while maximizing your portfolio. Partners have eons of Microsoft expertise and will get you situated.
Many organizations have been pushed to the Cloud sooner than expected because of Covid-19. It's time to take stock of how things are going and track how much you're spending. Are you spending on storage and licenses that you don't need?
The Orbis Solutions team is well-positioned to deliver the IT assistance and client service your company needs to manage today's dynamic business environment. At this time, you should stay focused on your company and clients rather than being bothered by the technology. Our Las Vegas managed IT services team will help you look through your entire IT framework to optimize your spending and cut off the fluff. Reach out to us today.
Thanks to our colleagues at Velocity IT, a Dallas IT company we are so lucky to have in our circle of IT friends. They helped with the research into this article.