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Microsoft have announced that they will be making some changes to their commercial price plans for 365 – this will be the first substantial price rise since Microsoft Office was first launched over a decade ago so it is a big deal.

As annoying as it is when prices get increased, arguably Microsoft have justified this one with the increased value they continually deliver to their customer base with their range of tools, when you consider the changes that have been implemented in Microsoft’s range of tools over the last decade the differences are huge.

 

Why are Microsoft Increasing their pricing?

It isn’t just a case of a large corporation getting greedy. Microsoft is really trying to draw attention to the value they have added to their product suites over the years to justify the increase in price – you need only look at some of the key tools that we use in our everyday lives, how much they have changed, improved, and generally become more functional, to see where they are coming from.

But let’s forget about the value added for a minute as that is completely subjective. Business Office 365 subscriptions make up 20% of their quarterly revenue stream (according to their FY Q4 earnings report ¹), and they would undoubtedly like to grow this.

These changes won’t be unique to Microsoft, as all Cloud providers are expected to raise prices as they are focusing on their average revenue per user. This is a good way of ensuring they not only provide better service but also make what they feel is necessary from the different subscriptions they offer.

The price rises indicate that Microsoft are trying to tempt you into converting to the Microsoft 365 E5 or E3 bundle. For those that don’t know, the E3 bundle comes with a full license to install the desktop version of Excel, Word, Outlook, OneNote, and Publisher. E5 offers the same tools but with Microsoft Advanced Threat Protection software that guards your company against malicious threats in email messages, attachments, and links.

Microsoft have been very clever about the way that they are making the price rises. They are making the Microsoft 365 E5 bundle more appealing because the gap in worth between the E1 and E3 bundles is much smaller in comparison. They have also closed the cost gap between the E3 and E5 bundles by increasing only the E3 bundle and keeping the E5 bundle the same, making it much more appealing to customers and not seem quite so financially out of reach.

 

Your role in the lead up to change

As a customer, you need to take your time assessing your use of the products at your disposal in order to find out the actual value you are receiving from your subscription. This includes looking at the future – ask yourself, ‘if me or my team haven’t used this for a while, are we ever going to?’

Microsoft justifying the increases with added value through more features that are better equipped is all well and good, but only if those features are being used to their full potential. If they are then the bitter pill to swallow about price increases isn’t quite so bad.

The main problem is that most Microsoft customers quite simply aren’t using all the tools at their disposal. Most have a variety of different tools from different vendors – even though Microsoft have an alternative that can be used as part of their plan.

You need to be familiar with – at the very least – the main tools that you use in order to be sure you are getting best value from them. If you aren’t then changes can be made either to your plan with Microsoft or the way you are using them to make them cost effective. Microsoft will also not leave you with tools that don’t do what they are supposed to, so show Microsoft that their tools aren’t being utilised to their full potential and they may provide something different that can be.

Don’t get us wrong; we know how vast the features Microsoft offer are, but only a small percentage of businesses are getting every ounce of value they can out of the platform. Using every feature isn’t the aim or the only way to get value, because just using enough tools in the right way will achieve the same goal.

It is good that Microsoft had the decency to warn their customers about the price rises – this gives you time to be prepared. To do this you must ask yourself, ‘am I getting the added value that Microsoft say I’m getting’ and if the answer is no, do something about it.

In the following article we will do just that. We will explore the tools you may be using in your organisation and the Microsoft 365 alternatives that can take over from them, in the process helping you force all the value possible out of your Microsoft 365 plan to justify the rise in price.

 

We’re Netplatforms.

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0207 993 9035 or hello@netplatforms.co.uk.

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