Microsoft have announced a range of pricing changes coming this year - many of which appear to be slightly confusing or unclear. So, we're here to make it all a little simpler and lay out what the changes are, what your options are, and when is the best time to make a change for your business.
Scroll down for a handy graphic showing an example of what your pricing will look like depending on which option you choose.
What's happening?
Microsoft are moving everyone over to the new Commerce Experience platform, and increasing the prices of all Microsoft subscriptions.
If you make a change to the new model now (rather than waiting for your renewal date), you can lock in a lower price point and avoid the price rises for up to a year.
You'll have annual or monthly contract options, which will have different prices and different levels of flexibility.
What are the new pricing models?
There are two new pricing models - monthly or annual. Within the annual plan, you have the option to pay monthly or annually, so ultimately both plans have a monthly payment option.
The differences between the annual contract and monthly contract are as follows:
- Monthly contracts provide complete flexibility - you can decrease your license numbers each month if necessary
- There is a premium price for this flexibility, which is significantly higher than the annual plan - the monthly price will be up to 44% higher than you're paying currently
- The annual plan also includes a price increase compared to today's pricing, but this is much lower at 20%
- With the annual plan, you won't receive a discount or credit if you reduce your license numbers.
If you move to the new pricing models now, there are discounts available to bring this price down...
When is the change happening? And what impact does this have on the prices?
You have some control over when this happens, but the costs will increase the longer you leave it.
If you move to the annual plan before 31st March 2022, you will lock in today's price and get an additional 5% discount, making your plan cheaper overall for the next 12 months.
If you move to the monthly plan before 30th June, you'll get a discount to match today's pricing until 1st July, at which point the pricing will revert to the new monthly pricing.
If you wait until your renewal date, you will remain on your current pricing until that time, before switching straight to the new pricing with no discounts. If you remain on the legacy pricing, we would not be able to order you any new subscriptions after 10th March 2022.
What's the best option for my business?
We've run the numbers and for the vast majority, moving immediately onto the annual plan (paying monthly) is the most cost-effective option. With this, you get to keep today's pricing, plus a 5% discount, so you're paying less for the next 12 months than you would have been.
For cashflow reasons, paying monthly rather than annually makes the most sense for the majority, though you need to be aware that you do still have that annual commitment.
If your concern is flexibility, and you have a lot of fluctuation in your user numbers, we can help you combine the two plans - for example, you could have 80% of your licenses on the annual plan with the lower pricing, and 20% on monthly so you can maintain some flexibility.
The proportions that work best will vary depending on your business, so it's worth talking to your MSP (e.g. us) to find out the best split for your business.
Should I just wait and see?
Because there are significant incentives for moving to the new models, waiting until your renewal date to make a change is the least appealing option for almost every business. The discounts available when you move now are enough to make a big difference.
Locking in today's prices, especially with an additional discount, can add up to a £4 per license monthly difference. If you have 100 licenses, that's £400 per month you wouldn't need to be spending.
I'm still not sure which is the best option
No problem, we can help. If you buy your licenses through SpiderGroup, we can sit down with you and work out exactly what the cost implications of all of the different options are, what will provide you with the best price, and what flexibility (if any) you need to build into your plan.
Reach out and we'll book in some time to support you with the changes.
