Microsoft is set to raise the price of Microsoft 365 by 20 per cent for some business plans.
The changes will affect Microsoft 365 commercial subscriptions from March 1 onwards.

Microsoft said this was the first “substantive pricing update” for Microsoft 365, which was previously called Office 365, since the cloud-based suite was launched 2011.

The size of the price increase will depend on the version which businesses use, with the highest increase costing them $4 per user per month.

The changes will not impact users of the consumer or education versions of 365.

The 365 suite is one of Microsoft’s largest sources of revenue, producing over $168 billion in sales in its most recent financial year.

Microsoft still sells licensed versions of Office for on-premises use, however since 2017 the software giant has derived most of its Office-based revenue from cloud-based solutions.
Microsoft said it has over 300 million commercial Office 365 users.

The BigTech’s shares hit a record high on the news, rising 1.8 per cent to $295.96 each.
Microsoft is currently the second most valuable company worldwide, with its market capitalisation of around $2.2 trillion falling slightly behind that of Apple’s $2.4 trillion.

The price increase will be accompanied by the addition of audio-conferencing capabilities to more editions of Microsoft 365, enabling users to dial-in to meetings from their phones.

“This updated pricing reflects the increased value we have delivered to our customers over the past ten years in three key areas - communications and collaboration, security and compliance, and AI and automation,” said corporate vice president at Microsoft Jared Spataro.

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