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Breakwater IT Logo on T-Shirt with Windows Laptop in the Background

From March 1st Microsoft are making changes to some of their business licenses. This includes a price increase and changes to the license agreement.

Changes to Microsoft 365 Pricing – March 2022

There are six Microsoft licenses that will be hit by a price rise. Microsoft has advised that the increase will be roughly 20%, however we are waiting on the exact figures for UK pricing.

This increase will affect all new or renewed agreements from 1st March. The licenses affected are:

  • Business Basic
  • Business Premium
  • M365 E3
  • O365 E1
  • O365 E3
  • O365 E5

New Commerce Experience (NCE) Update

As well as a price increase, Microsoft are change the way the license works.

Going forward, there will be two ways to license 365 licenses:

Annual agreement with monthly payments

The initial order that is placed at the beginning of the agreement is fixed. You will be able to add licenses or upgrade the plan. However, you will be unable to drop the license count. The only exception to this is within a *72-hour window after purchasing a new license (this is not business hours).

*As of the 18 March 2022, the 72-hour window has been increased to seven days. Read more here.

Monthly agreement with monthly payments

This agreement will give you more flexibility in your license quantities. You will be able to add or remove licenses and the end of each calendar month. If you remove a license mid-month, you will still have to pay for the license for the full month.

Whilst this option sounds better, it comes with a major drawback. There is an approximately 20% increase on the price for this agreement. Therefore, if you were to choose this agreement option, you would see a 40% price increase overall.

Our Recommendation

To keep pricing down, we recommend taking out the annual agreement with monthly payments now. This allows you to be protected from price increases from 1st March.

We understand that you may have some spare licenses to cover new starters/leavers, however the ability to keep the price at its current rate should allow for this, particularly with the 40% increase on a month-by-month agreement.

Video Update

Our Managing Director, John Gostling, has recorded a 5-minute update on the Microsoft license changes. Watch below:

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