If you’ve not heard, Microsoft are increasing their pricing by 9% on April 1st, 2023. This will affect ALL Microsoft products/services, so not to be confused with the NCE and Microsoft 365 price increases last year.
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As many of you recall, in March 2021, Microsoft change their licensing model to the New Commerce Experience (NCE). As regular upgrades take place to enhance the NCE, a further increase will take place on April 1st.
As a reminder, the NCE cost increases affected the following license types:
- Microsoft 365 Business Basic (20% Increase)
- Microsoft 365 Business Premium (10% Increase)
- Office 365 E1 (25% Increase)
- Office 365 E3 (15% Increase)
- Office 365 E5 (8.5% Increase)
- Microsoft 365 E3 (12.5% Increase)
In the future, Microsoft 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 will provide increased transparency and predictability for customers globally and move to a pricing model that is most common in the industry.
The Microsoft Cloud continues to be priced competitively, and Microsoft remains deeply committed to the success of its customers and partners. Microsoft will continue to invest to enable customers to innovate, consolidate and eliminate operating costs, optimize business performance and efficiency, and provide the foundation for a strong security strategy that customers around the world have come to rely on.
Why are Microsoft making these changes?
In some regions, Microsoft customers and partners have been able to purchase Microsoft products at up to 40% lower prices versus global US dollar levels for several months. These changes are to realign regional prices closer to USD pricing which may result in increases or decreases depending on local currency fluctuations.
What is the change being made?
Beginning in 2023, Microsoft will implement a more defined and transparent cadence to provide better Commercial Cloud pricing alignment across regions. Partners and customers with pricing in local currencies will be able to plan for pricing alignment to USD and global parity at semi-annual intervals, subject to market conditions.
Why is Microsoft changing local currency pricing at a semi-annual cadence?
Microsoft regularly assesses the impact of its local pricing for software products and online services to ensure there is alignment across regions. Moving to a semi-annual cadence will enable greater transparency for our customers on the timing of pricing adjustments and ensure a clear and consistent approach to pricing.
Does Microsoft decrease prices?
Yes, Microsoft has decreased prices most recently in New Zealand and Taiwan. As part of the new semi-annual cadence prices will be aligned up or down to maintain global pricing alignment.