A Complete Guide: Upcoming Changes to Microsoft 365

Microsoft Office software has gone through many generations and updates throughout the years, but big ones are happening this year and next. Find out how the one-time purchase 2021 version of Microsoft Office differs from previous versions and how the Office 365 price increase may affect you in 2022.

Microsoft Office 365 Price Increase

The Microsoft team announced on August 19, 2021, that there would be price increases for Office 365 in addition to a name change to Microsoft 365. There haven’t been any significant upgrades in pricing in 10 years, so the company has been careful to explain all the key features, developments, and deliverables to reflect this change.

The current Office Suite includes 24 apps, accessible as a subscription-based service (Microsoft 365) or as a one-time purchase, known as Office 365. 

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Price Increase in 2022

While the Microsoft 365 price increase isn’t a major one, it affects its range of commercial products. Here are some price changes you can expect to see starting March 1, 2022.

• Microsoft 365 Business Basic: 15-20% increase
• Microsoft 365 Business Premium: 10% increase
• Office 365 E1: 25% increase
• Office 365 E3: 15% increase
• Office 365 E5: 5-10% increase
• Microsoft 365 E3: 10-15% increase

These are the global price changes for commercial products. Microsoft has announced that there won’t be any changes to consumer or education products and that local market adjustments may affect these prices in different regions.

Why Microsoft 365 Prices Are Increasing

Microsoft identifies three areas of improvements that prompted the price increases: 

• Automation
• Communications and Collaboration
• Security and Compliance

These three changes add value for all commercial users, and increased value means increased cost. Whether you choose to use the new collaboration functionality or enjoy the improved safety features, you’re accessing innovative tools that Microsoft has specially crafted with their customers’ needs in mind.

Changes to Microsoft 365

Microsoft 365 currently has over 300 million paid seats for its commercial product. Both Microsoft 365 and Microsoft Teams were introduced four years ago to streamline workflow for businesses. In its press release about the upcoming changes, Microsoft highlighted three main pillars:

AI-Enhanced Productivity

Modern AI capabilities have dramatically improved over the past decade, whether you’re creating maps, sorting emails, organizing tables, or transcribing videos. These features help you achieve your goals in less time and with fewer tedious tasks.

Improved Security and Compliance Features

Across industries, businesses need to remain safe and comply with various regulations. For example, the medical field is preoccupied with the HIPAA Security Rule when it comes to collaborative technology. Data loss prevention, message encryption, mobile data management, and other powerful features are ubiquitous technology needs that help you stay up-to-date with the latest security. 

Microsoft 365 is aware that your business is at risk if personal health information, data storage, and safety features fail to meet the minimum compliance standards. They have continually adjusted security measures and capabilities to comply with regulations, reduce the risk for your organization, and beat cybercriminals. 

Dynamic Communication and Collaboration

Microsoft Teams is the cornerstone of collaboration in the Office suite. There are many more collaborative applications you can take advantage of, however, including the following:

• SharePoint
• Planner
• Power Platform
• Forms
• Shifts

How This Affects Small Businesses and MSPs

Both small businesses and managed service providers, or MSPs, will be particularly affected by these changes. There are two key ways that these changes will affect these organizations:

1. Cost may become a limiting factor.
2. Enhanced features will be available.

Even these small increases in Microsoft 365 are significant for small business owners and MSPs. The cost can add up if you’re signing up dozens or hundreds of commercial users.

Both small businesses and MSPs, however, will benefit from the enhanced features. The AI integration and collaborative tools alone could create the workplace efficiency needed to cover the cost, and greater levels of security help businesses stay compliant.

Office 365 Versus Microsoft 365

Another significant change besides the Microsoft 365 price increase is the introduction of flat pricing. Microsoft has been using both Office 365 and Microsoft 365 names to describe the same subscription-based bundle of tools, but now they’re rebranding the service. Office 365 is available as a one-time purchase as of October 5, 2021, while Microsoft 365 will remain the cloud-based subscription service.

One-Time Purchase vs. Cloud-Based Approach

Office 365 is a one-time purchase that offers a Long Term Servicing Channel, or LTSC, option for commercial users, as well as a personal use option.

The cloud-based version, even with the increased pricing, may be more beneficial for some users. Choosing the subscription approach ensures you always have the latest version, including the latest safety features. It will continue to update to work with newer versions of Windows and includes a whole host of features.

Choose Office 365 if you’re looking for a more affordable approach that doesn’t require continual payments. If your organization only uses a limited range of tools and features, Office 365 may be a more affordable solution than Microsoft 365.

Find Out How the Changes Will Affect Your Business

From the Office 365 price increase to the enhanced compliance and collaboration tools, there are a lot of changes occurring in 2021 and 2022 for your company. If you’re feeling overwhelmed with the latest features of Microsoft 365, or want to learn more about the pros and cons of both models, contact us at Terminal B for more information.