Microsoft has plans to increase Monthly subscription for Microsoft Office 365 by 20%

[German]Microsoft seems to have informed its sales partners that it wants to make Microsoft Office 365 subscription customers pay a bit more. Customers can expect a price increase of up to 20% if they continue to insist on monthly payments. The only way to avert this is with an annual subscription. This emerges from a report in a US medium.

Microsoft wants to force its customers into subscriptions, and the sale of one-time purchase licenses is actually to be phased out. I remember when the first Office 365 subscriptions were introduced, what people raved about. You could sign up for these subscriptions on a monthly basis, so you'd get exactly what you needed. In the back of my mind at the time was: and what happens if a receiver takes over the company and stops payments? Then people won't be able to use Office from one month to the next.

Microsoft turns the price screw

Microsoft is just using its market dominance in the productivity software space to force some customers with an Office 365 subscription into annual contracts. Microsoft has announced in August 2021 a raise in prices for Microsoft 365 and Office 365 on March 1, 2022. The biggest price increase is for the Microsoft 365 E3 subscription, which will become $36 more expensive per year per user. However, the consumer, education and Microsoft 365 E5 subscription versions of Microsoft 365 are expected to remain the same in price

Now comes the next news about price increases for subscriptions, which CNBC picked up on in this article. In 2022, Microsoft will introduce what it calls the "New Commerce Experience for Office" for its partners to re-sell. No concrete information about price changes has been announced yet. But Microsoft has already informed its partners that companies paying monthly can expect a 20 percent price increase. Customers can only prevent this price increase if they switch to annual subscriptions.

It is rumored that Microsoft will make it easier to account for revenue from such Office subscriptions. It also potentially ties customers more firmly to the subscription, reducing the risk of churn. The latter seems to be a critical element in the subscription business. Many companies therefore offer discounts to subscription customers for annual contracts. Microsoft takes the approach that monthly subscriptions are simply more expensive. It is also said that it will be more difficult for customers to switch from an annual subscription to shorter terms for Office 365 or Microsoft 365 subscriptions.

Some customers who have monthly subscriptions are upset about this, and there is anger. The question remains whether people will switch to Google or other providers, switch to open source, or continue to see Microsoft Office 365 as the only alternative.