Microsoft 365 and Office 365 prices to surge by as much as 25 per cent in biggest changes in a decade

Global price hikes on commercial products to come into play in six months’ time

Microsoft has issued price hikes of Microsoft 365 with some products seeing prices rise by as much as 25 per cent.

The pricing changes, which are the largest from Microsoft since it launched Office 365 a decade ago, will come into force on 1 March 2022.

Microsoft says the changes will apply globally and will be adjusted for local markets in certain regions.

The adjustments only affect Microsoft's commercial products, with the vendor claiming there are no planned pricing changes for its education or consumer products at this time.

Pricing for Microsoft 365 Business Basic will increase from $5 per user to $6 per user - a 20 per cent increase.

Microsoft 365 Premium pricing will increase from $20 to $22 per user (a 10 per cent increase).

Business packages including Office 365 E1, Office 365 E3, Office 365 E5 and Microsoft 365 E3 are also set for price increases by the March 2022 timeframe.

This includes a 25 per cent pricing increase for Office 365 E1 from $8 per user to $10 per user. Office 365 E3 will increase from $20 to $23 (a 15 per cent increase), Office 365 E5 from $35 to $38 (8.6 per cent) and Microsoft 365 E3 from $32 to $36 (12.5 per cent).

Microsoft says that the price hikes reflect the "increased value" it has delivered through its suite of products over the last 10 years.

In a blog post, corporate VP for Microsoft 365 Jared Spataro said that Microsoft has has added 24 apps to Microsoft 365 since its launch and released 1,400 new features and capabilities across three areas: communication and collaboration; security and compliance; AI and automation.

The vendor claims it has "continuously reinvested" in its software suite, introducing Microsoft 365 four years ago to bring together Office, Windows and Enterprise Mobility and Security as well as Microsoft Teams.

It also says it will add "unlimited dial-in capabilities" for Microsoft Teams meetings over the next few months.

Microsoft made $19.1bn in operating income for its last financial quarter ending 30 June 2021, an increase of 42 per cent.

Revenues for its commercial products and cloud services business grew by 20 per cent, with commercial Office 365 revenue surging by 25 per cent year on year.