Microsoft has announced changes to its annual Microsoft 365 subscription pricing, set to take effect on 1st April 2025. These changes will primarily impact small to medium sized businesses who purchase licenses through enterprise agreements or cloud solution providers (CSPs).
In this blog, we’ll summarise what’s changing, why Microsoft is changing their pricing structure, and what steps you can take to lessen the impact on your organisation.
Why are the prices increasing
The pricing changes are primarily attributed to Microsoft integrating further AI tools such as Microsoft Copilot, which can help to drive productivity and collaboration across 365 applications. Microsoft have also made investments into enhanced security features to help organisations fight against increasing cyber threats.
What are the changes
Annual New Commerce Experience (NCE) customers with monthly billing will see a 5% price increase from 1st April 2025.
It’s worth noting that there were some price reductions of approximately 5-6% for UK customers from 1st February due to favourable changes in the British pound exchange rate, which may help to offset some of the price increases.
Important dates and renewals
From 1st April 2025, if you renew your annual NCE plan and pay monthly, your renewal will be subject to a 5% price increase. If your renewal date is before 1st April, you won’t see the price increase until your next renewal; for example, if your renewal is March 2025, your pricing won’t increase until March 2026.
Is it possible to avoid the price increase
Yes. If you opt to switch to an annual payment plan, you will avoid this price increase. Annual payment commitments are not subject to a price increase.
How it will impact organisations
Whilst these licensing changes may have a negative impact on your budget, there are ways to manage and lessen the impact, even if you choose not to switch to an annual payment. Watch out for our upcoming blog post about how to optimise your Microsoft 365 licenses.
If you need help or advice navigating Microsoft licensing, contact our team who’ll be more than happy to help. We can advise on cost-saving strategies and ensure you’re getting the most from your licensing.