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This March, Microsoft is increasing its subscription prices for Microsoft 365 (formerly Office 365). Despite Microsoft constantly adding new features, this is the first price increase rise for a decade.  Even with the 20-40 % price increase, it’s still a terrific value for businesses.

Unfortunately, the price isn’t the only thing changing.  The way Office 365 is sold is also changing, though I’m not sure it’s for the better.

You can keep your subscription on a monthly basis, or you can move to a 12-month agreement.  Microsoft is touting that the annual agreement will lock your pricing in for a year.  If you go with the assumption that MS won’t change their pricing again for quite a while, this is a moot issue.  I don’t think they would start changing pricing regularly without risking losing a lot of customers to Google.

The downside if you go with the annual agreement is that you’ll lose flexibility in your licensing.  You can always add licenses during the year, but if your employee count goes down, you’ll be stuck paying for licenses no longer used until the end of that term. Another potential downside is that you’ll also be locked into your IT support company during that 12-month term.  Good news for the resellers and managed service providers (MSPs), not necessarily for the customer.

I think for many businesses, having the flexibility to change licenses as needed will be worth paying extra for, especially in the long run.

If you want to talk through which option’s going to be best for you, do give us a call.