Microsoft recently announced the first Office price increase in a decade. If your enterprise uses Office, you probably know the platform has rolled out a lot of new capabilities since the last release. The company has essentially reinvented the Office platform as a cutting-edge SaaS service, setting a rate for innovation that would be difficult for many other providers to match. But while the increase appears justified against rising technology costs and upgraded feature sets, it’s still important to take the right steps to ensure your spend matches your needs and usage.
Are you ready for the Microsoft Office price hike? We’ll show you 5 ways to wrangle your Microsoft UCaaS Spend.
The new pricing structure goes into effect March 1, 2022, giving your team some time to adjust. However, Microsoft’s increase isn’t symmetrical and how your costs line up depend on your installation. The hike will be substantial for some businesses, coming out to roughly 20% in some cases and across the different SKUs and packages. According to Microsoft, the increases will apply globally but will have local market adjustments in some regions.
At the top end, the list price for Microsoft 365 E5 is the most expensive plan today. But pricing listed on the provider’s website is simply the base price to purchase a single seat. Microsoft offers very aggressive volume pricing, which depends on the customer. That puts the onus on enterprises that are renegotiating or ending their contract to know what they need, what they optimize and what they can do without.
To fully identify what your pricing may look like after the increase, you need to know which subscription your organization has right now—E3 versus E5 and Office versus Microsoft. Many companies don’t have a clear understanding of the differences between E3 and E5, so here are the differences between the two.
| Plan |
OLD Annual |
NEW Annual |
% Increase |
| Microsoft 365 Business Basic | $60 | $72 | 20% |
| Microsoft 365 Business Premium | $240 | $264 | 10% |
| Office 365 E1 | $96 | $120 | 25% |
| Office 365 E3 | $240 | $276 | 15% |
| Office 365 E5 | $420 | $456 | 9% |
| Microsoft Office E3 | $384 | $432 | 13% |
There are also a variety of add-ons that may be part of your package. You may have Microsoft’s Intune, the mobile device management (MDM) and mobile application management (MAM) platform that allows IT to manage apps, control updates and take other actions. Security and compliance features might also be included in your plan—either as part of the base cost or for an added upcharge—where recurring costs hit your budget whether you use the service or not. A thorough review of your plan agreement will help to uncover these features so you know what’s driving your current pricing level.
Unfortunately, it’s not always easy to get information on the services and features your organization is consuming. Basic reports on usage for Teams and Office can be obtained without much difficulty, but metrics such as utilization of any calling plan, utilization of bring your own carrier (BYOC) for phone services—through reports from the carrier, for example—are more challenging.
Your firm’s consumption of traditional telephony support and calling plans may also be evolving. Though it may not seem directly related to your Office spend, these services represent potential usage that could either be better positioned to further leverage the tools within Office or eliminated if they’re no longer needed to balance against the planned increase. In both scenarios, a deeper dive into your UCaaS costs with targeted tools may be necessary to ensure you have the insight you need to accurately assess your usage and identify those features of your Office plan that are crucial to your workflows and which you may be able to eliminate as a cost-optimization measure.
Controlling your Office costs post-increase is all about right-sizing your plan before the hike takes effect. But how can you do that? If you don’t take the right steps know, you can be assured your business will be spending at least 8.5% to 15% more on your Office subscriptions when you’re renegotiating your next renewal.
We’ve found that some enterprises were pushed into negotiate an E5 agreement even if they weren’t certain they needed the highest tier’s full feature set. As these organizations mature and they become more deliberate users of tools such as collaboration platforms, many realize they don’t need phone systems, domestic calling plans even their previously important BYOC. Between the availability of Teams and its robust feature set and the continued migration to long-term remote work, if your business has found different ways of communicating that can be more effective then you may be able to trim your Office cost and blunt the effect of the upcoming price hike.
For many organizations, even those on less expensive plans, there will be additional pressure to cut costs to offset the price increase. This is where Calero can help. Our expense management experts can work with you to evaluate your current package and all its features plus add-ons. We’ll help assess your consumption of the services available to you and then make recommendations around what you’re using, how you’re using it and where your business is going with using these services. If you don’t proactively take control of your Office deployment, you’ll be behind when the increase takes effect and your options to optimize your costs will greatly diminish.
If you’d like to learn more, contact a member of our team for a one-on-one consultation to get you started on the road to a right-sized Microsoft Office plan.