Upcoming Microsoft Licensing Changes

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Upcoming Microsoft Licensing Changes

Microsoft has announced some upcoming changes that will impact how businesses obtain per-seat licensing. These changes will potentially affect both the price customers pay for their licensing and the way customers will need to approach the term for which licenses are purchased.

Price Increase

March 1, 2022:

The first change Microsoft has announced will go into effect on March 1, 2022, and is relatively straightforward. Prices are increasing across the Microsoft catalog for many Office 365 and Microsoft 365 licenses.

New Pricing Model Microsoft 365

*All prices listed are per license per month

For those of us in the industry, these cost adjustments are not unexpected. Microsoft hasn’t increased its prices in years and has continued to steadily increase the features and capabilities of these products.

We know you have budgets and that this information results in direct financial adjustments for many of you. Get ahead of the curve by letting Summit Technology review your organization’s licensing needs and see what we can do to help you lock in your current rate before these changes take effect.

Added Premium

July 1, 2022:

The second change Microsoft announced will occur 4 months later, taking effect on July 1, 2022.

In addition to the price increases that will take effect in March, Microsoft will be adding an additional 20% premium to licenses that are purchased on a month-to-month subscription term.

How it Can Affect Your Budget

Between the price increase in March and the premium for month-to-month subscriptions in July, the costs for your Microsoft licenses could significantly increase this year. Take the example below of 100 users of Microsoft 365 Business Premium. That’s an increase of 32%.

Budget Microsoft 365 Licensing

Annual Subscription Term

Licenses acquired with a 1 or 3-year term will not be subject to the above 20% premium. Licenses acquired in an annual subscription can be increased during the term and will co-terminate on the anniversary date. However, licenses acquired in an annual subscription cannot be decreased during the term.

For Example

If you have 100 employees, each of whom utilizes a Microsoft 365 Business Premium license, you can utilize an annual term to avoid paying the 20% premium for a month-to-month term that will begin in July. However, if the number of employees requiring a Microsoft 365 Business Premium license regularly fluctuates between 75 and 110, you might end up paying for licenses on annual contracts for employees that are only there for a couple of months. A better way to optimize your licenses might be to purchase 75 licenses on an annual term and supplement that with monthly term licenses for employees that fluctuate.
Scenarios like this may be familiar to businesses that have temporary employees, seasonal workers, or high employee turnover.

Let Us Help You Save Money

If your company is utilizing Microsoft licensing, it is almost certain that one or both of these changes will impact you, and it is important to review your licensing options now to minimize their financial impact in the near future. Summit Technology can review your organization’s licensing needs determine the best path forward including locking in your license price before these pricing changes take effect.