Microsoft 365 and the add-ons cost trap

[German]It looks like Microsoft's sales department has bagged its sheep (aka customers) clean. Everything is jumping on the Microsoft 365 subscription solution to get in on the action. And now they are being milked – despite the subscription, many components in Microsoft 365 are only available for an extra charge, as has now been discovered.


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Office 365: the all-inclusive promise

I still vaguely remember the introduction of Microsoft Office 365 (now called Microsoft 365), when nobody really knew what to do with it. After all, you could buy an Office package and, depending on what you bought, you had everything on board for the lifetime of this Office version. Office 365 was then advertised as always having the latest functions and "everything you need". The user only had to choose the "right subscription".

Sorry, unfortunately this is optional

Mary Joe Foley has taken a look at the current situation with Microsoft 365 for Directions on Microsoft, and comes to a devastating conclusion in the article Paid add-ons to Microsoft 365 are multiplying rapidly. What's a customer to do? comes to a devastating conclusion. The costs for additional functions, applications and licenses that are no longer included in the basic Microsoft 365 E3 and E5 subscriptions are increasing by leaps and bounds. In the last four years, these components, for which companies or users have to pay separately, have increased more than fourfold.

In the above tweet, Foley makes reference to Copilot, which is not the only add-on that Microsoft offers to M365/O365 users. Copilot, like many other features, is a paid extra that is not included in the basic Microsoft 365 E3 and E5 subscriptions. The chart above shows that the number of paid Microsoft 365 extras has more than quadrupled in the last four years. Mary Foley lists in her article:

  • Features that may be required to meet security, compliance and management requirements, such as Defender Vulnerability Management, Priva Privacy Risk Management and Microsoft 365 Cross Tenant User Data Migration;
  • Premium features that go beyond the basic features included in the Microsoft 365 suites, such as Microsoft 365 Copilot, Power BI Premium and Teams Premium;
  • Licenses for devices and service accounts that are not covered by the Microsoft 365 suites, such as Exchange Online Plan 2 (for shared mailboxes; Teams Shared Devices

as paid add-ons. In December 2019, there were still 14 such available add-ons that cost extra. In December 2023, the Directions team found 61 paid add-ons. You should let that melt in your mouth: A company leaves Microsoft a whopping 700 US dollars per year and user on the table for an E5 plan for a Microsoft 365 subscription in order to be allowed to use the basic functions in question. On top of this, there are also paid add-ons for Microsoft 365 customers, regardless of whether they have a private subscription or a company subscription.


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I don't have the costs on my radar, but German blogger Martin Geuß writes here on the subject that the monthly subscription prices per user for Microsoft 365 E3 are 35.70 euros and E5 57.70 euros. However, these subscriptions do not include many functions that can be used as add-ons. Martin mentions Teams Premium, which is offered for around ten euros per user per month and offers additional functions. The game is similar with Microsoft Copilot, for which business customers also have to fork out around 30 euros per user per month. I had already pointed this out in the blog post Copilot Pro: Microsoft's subscription model for its products.

In addition, there are further costs that go beyond the add-ons themselves, according to Mary Foley. When it comes to security add-ons, Foley cites an example that no one is talking about: "Who is going to evaluate, implement and manage all these new security tools in Microsoft customers' organizations?" she quotes Michael Cherry, analyst at Directions on Microsoft.

"Microsoft and other cloud providers have promised that the cloud would help reduce IT costs, not only in terms of on-premise hardware and software, but also in terms of IT headcount. Now it looks like the cloud will add significant new costs, at least in the area of security. The main cost is likely to be acquiring the expertise, either through training or hiring new staff with the skills to use these tools effectively." says the summary.

While Microsoft publicly claims to help customers do more with less, they are trying to maximize the average revenue per user through paid add-ons. It looks as if Microsoft now has its fingers permanently in users' wallets in order to make additional money. Or have I misunderstood something – I often hear that there is no alternative and that everything is extremely inexpensive.


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