It might not seem that long ago that Microsoft announced a round of general price increases, and you’d be right to think so. Back in March 2021 Microsoft introduced their New Commerce Platform (NCE), and along with this a number of M365 business and enterprise licenses increased in cost.
It now transpires that a further price rise in subscription costs is imminent, as Microsoft have announced that from the 1st April 2023 all cloud service subscription costs will increase by 9%. This is across the full suite of Microsoft cloud services, including Azure and Microsoft 365.
In this write-up, we discuss why this occurs, what it means for you, and how you can lock in pricing protection.
Microsoft is continually developing and upgrading their cloud services to provide better customer experiences, and the price increase is to align the Microsoft cloud services globally, providing a consistent cost structure reflecting the exchange rate to the US dollar.
Further to this, Microsoft will now assess pricing in local currency twice a year, and this will take into consideration currency fluctuations relative to the USD. This move by Microsoft sees them align with the way of how the industry is set up.
Microsoft comments ‘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.’ Source – Microsoft.com
As mentioned in our introduction, the price increase for GBP subscriptions will rise by 9% from 1st April.
Microsoft’s price increase will affect their entire suite of cloud services with the two most common services being Microsoft Azure and Microsoft 365.
Whether you purchase via Microsoft directly, or a CSP (cloud solution provider) and depending on what subscription service you are aligned to, expect to see an increase in your monthly invoice.
This is a fantastic moment to check your licensing and see if you have extra licenses to remove.
As mentioned, check your current licenses to see whether you have any licenses that you don’t require, and depending on your subscription remove them.
If we take Azure as an example, there are two NCE subscription structures:
If you are on Microsoft’s PAYG model, then your price will increase on the 1st April 2023. If you are tied into a commit plan, then your price is protected for the duration of the commitment up until the renewal date, at which point an increase will occur.
For M365 licenses, there are three NCE subscription structures:
The monthly/monthly provides you with the highest price point per license, however allows you the most flexibility in adding and removing M365 licenses when you want to. The downside, is that you pay the highest licenses costs and the increase is immediate as of 1st April 2023.
The monthly/annual, is a discounted annual commitment paid monthly. The number of licenses you commit to in this term is locked in and cannot be reduced, however you pay less per subscription licenses and price increases won’t occur until your annual renewal date.
The annual/annual provides the same as monthly/annual, however you pay for your licenses upfront at the start of the agreement. Again, you are protected against the price increases until your annual renewal date.
It’s important to understand the underlying structure for purchasing your M365 licensing, as it can save you money on your subscription costs, and it puts you in a position to choose how you want to deal with this current price increase.
Now you understand the licensing options within NCE, you can start to plan how you can protect your business and delay the current price increases.
The following checklist will help:
Microsoft Azure:
M365:
If you decide that switching to a committed or annual subscription service is best, not only will you offset the 9% increase on 1st April 2023 to a later date, you will also reduce your subscription costs as Microsoft discounts their pricing for longer term commitments.
Deciding to use a Microsoft partner for your Azure and M365 subscriptions is a great way to get the most out of the Microsoft services that you use. Microsoft partners can provide expertise and IT support services to help your business reach its goals.
Partnering with baseMSP is simple – as a Microsoft CSP who provides IT support services in Hampshire, we can help you streamline your Microsoft purchasing and introduce you to Microsoft technologies that will really help drive your business forward.
You can schedule a call with us or contact us at services@basemsp.co.uk.
Microsoft are set to increase their cloud services cost by 9% for UK businesses due to alignment of global costs to the USD. What we also know further ahead, is that pricing will be reviewed every 6months to re-calculate against any fluctuations in the USD rate.
As discussed, now is a great time to review current licenses, consolidate down on them, and look to commit to a long term agreement before the 1st April to protect your business from any imminent price increases.
baseMSP can discuss all the options with you, and provide guidance and support on what is best for you and your business. Call us today on 01252 268552.