Microsoft will raise prices of commercial Office bundles in July

Microsoft It said Thursday that it will raise prices for Office productivity software subscriptions for commercial and government customers on July 1.

The company’s Office applications, which include Word, Excel, PowerPoint and Outlook, have faced increasing competition in recent years. Google.

“We are constantly investing and innovating our platform for the future,” wrote Nicole Herskowitz, corporate vice president of Microsoft 365 and Copilot. blog post. “Last year, we launched more than 1,100 features across Microsoft 365, Security, Copilot, and SharePoint.” He wrote that the new features add value to the suites.

Price increases on commercial Office subscriptions have been very rare. Microsoft has increased the prices of its productivity suites in 2022 for the first time since it launched its original Office 365 subscriptions in 2011. Microsoft changed the name of Office 365 to Microsoft 365 in 2020. In January, Microsoft announced a price increase for its consumer Office suites.

Microsoft offers Office 365 subscriptions for commercial use that include access to productivity apps, as well as higher-priced Microsoft 365 subscriptions that include Windows operating system updates.

Here’s a breakdown of trade price changes:

• For small and medium-sized businesses, the price of Microsoft 365 Business Basic will increase from $6 to $7 per person per month.
• Microsoft 365 Business Standard will be available for $14 instead of $12.50.
• Microsoft 365 Business Premium will continue to cost $22.
• The entry-level Office 365 E1 offering for business will still sell for $10.
• Office 365 E3 will increase 13% from $23 to $26.
• The Microsoft 365 E3 bundle, which includes Windows for business, will increase 8% from $36 to $39.
• The price of the full-featured Microsoft 365 E5 will increase from $57 to $60.
• For front-line workers like cashiers, the cost of Microsoft 365 F1 subscriptions will increase from $2.25 to $3.
• Microsoft 365 F3 will be available for $10 instead of $8.

The U.S. Department of Defense and other government customers will face similar percentage price increases.

The various subscriptions all exclude access to the $30 Microsoft 365 Copilot add-on, which leverages generative AI models. Some companies have begun to widely implement Copilot, while others have held off on expanding their deployments, CNBC reported last week.

In most cases, organizations get discounts off list prices, but Microsoft has cut back on volume deals directly for some types of customers.

Almost 43% of Microsoft’s $77.7 billion in fiscal first-quarter revenue came from the Productivity and Business Processes segment, which includes Office. In October, the company said revenue from Microsoft 365 commercial cloud services rose 17%, while seats rose 6% in revenue from products aimed primarily at small and medium-sized businesses and front-line workers.

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