Executive Summary
- Microsoft will (once again) be increasing prices for its Microsoft Cloud business and enterprise products starting from 1st April, 2023.
- The price rise is aimed at all including those with Microsoft 365 for Business license subscriptions. For UK subscribers, the initial price rise will be +9%.
- The increase is being made as a response to local currency fluctuations against the US dollar, and future pricing will be pinned against the USD price of Microsoft products with pricing reviews twice per year.
Introduction
Pricing for Microsoft products has always been a somewhat confusing topic.
If you’re a long-term Microsoft user, you may know that licenses for core software have often been available at radically different prices across retailers, websites, and geographies – leaving it unclear exactly how much things should really cost.
Now that most of its services are available via its flagship Microsoft 365 subscription, Microsoft is set to redress the pricing balance.
To bring a bit more consistency to their pricing across the world, Microsoft has announced that – as of 1st April, 2023 – it will be increasing the price of its Microsoft Cloud products, including Microsoft 365 Business Basic, Microsoft 365 Business Standard, Microsoft 365 Business Premium, and Microsoft 365 Apps for Business.
How are Microsoft 365 prices changing?
From the 1st April, 2023, the price of the following subscriptions under the Microsoft Cloud banner will be increased by 9% in the UK.
To be more specific, here’s what the new pricing will look like compared to existing plans following 1st April, 2023:
| License | Current Price | New Price |
| Microsoft 365 Business Basic | £4.50 | £4.90 |
| Microsoft 365 Business Premium | £16.60 | £18.10 |
| Microsoft 365 Business Standard | £9.40 | £10.30 |
| Exchange Online (Plan 1) | £3.00 | £3.30 |
| Exchange Online (Plan 2) | £6.00 | £6.60 |
Why is Microsoft increasing 365 prices in the UK?
In the short announcement posted in early January 2023, Microsoft explained its reasoning behind making this latest price rise.
In short, the tech giant is seeking to reduce the impact of currency exchange rate fluctuations on its pricing model. As mentioned above, it’s been possible to source licences for various Microsoft products from other regions for a much lower price by taking advantage of exchange rate differences.
With the April change, Microsoft will effectively be tying all pricing to its US dollar prices. This means customers in other geographies will pay the local equivalent of the US subscription price, meaning UK customers will see a 9% increase to their monthly or annual cost.
This isn’t the first time a tech company has adjusted pricing based on currency fluctuations. Apple, for example, raised the price of its iPhones in the UK in 2016, citing exchange rate fluctuations as the reason for the increase. Similarly, Adobe increased its Creative Cloud prices in the UK in 2017, again citing exchange rate volatility as a factor.
Will my pricing change if I’m already a 365 subscriber?
If you’re already in the middle of an annual or multi-year license for Microsoft 365, you won’t be impacted by the pricing change until your next renewal.
We recommend that you check your renewal date, however, as if it falls after 1st April, 2023, you will be subject to the new price changes.
If you’re not sure about when your Microsoft 365 subscription is set to renew, just get in touch with your Get Support account manager who will be happy to help.
Will prices go up again in the future?
Because currency exchange rates are always on the move, it makes sense to assume that Microsoft are likely to make pricing changes again in the future – but will they?
In the announcement of the rise, Microsoft stated that they “will assess pricing in local currency as part of a regular twice a year cadence, taking into consideration currency fluctuations relative to the USD.”
This means that there’s the possibility of price changes at least twice per year, but it’s worth noting that prices could go down as well as up. For a heads-up on whether or not you should expect future rises or reductions, a look at the USD/GBP exchange rate would probably be a good place to start.
The key factor here is the US price of the Microsoft 365 licencing, which is the benchmark against which all local currencies will be derived.
Have a question about how the latest Microsoft 365 price rise will impact your business? Just get in touch with your Get Support account manager. Not a 365 subscriber just yet? Take a look at our range of business solutions.
