January 11, 2022
min read

Change, dramatic change, is coming to the many enterprises that rely on Microsoft’s 365 productivity suite. Last summer, the industry giant announced a noteworthy price increase. Corporations have until March 1 to make changes that will limit the impact it will have on how much they pay for their enterprise software. Implementing a strong software license management solution will help them make the transition smoothly.

On August 19, 2021, Microsoft said that pricing for Microsoft 365 suites would increase March 1, 2022, by 9% to 25%. The change will impact many businesses’ technology budgets because the productivity suite is very popular. In fact, the industry giant is the clear market leader with 89.2% market share, according to Gartner Inc.

Organizations’ spending on such solutions has been rising for a variety of reasons. More business processes are being digitized, so enterprises are replacing paper documents with digital data. The pandemic forced many corporations to provide employees with one solution set for the office and a second when they work at home.

In addition, collaboration is becoming more common as businesses must connect employees working at home with new solutions. Microsoft Teams has become the primary user application within Microsoft 365 that supports such remote work. With 91% of Microsoft’s clients are currently using or plan to use Teams, according to Gartner.

Therefore, productivity software suite revenue grew 18.2% during 2020. As evidence of its importance, the Office suite is Microsoft’s largest money maker and has more than 300 million users.  

How to Manage the M365 Price Increase

Given that the solution set is becoming more expensive, what steps can corporations take to manage the pricing rise? First, they need a clear picture about their current license usage. That requires sounds obvious and simple, but in many cases, licensing information is scattered across a number of different applications. Collecting the data requires that employees copy and paste information from department spreadsheets and Power BI pro dashboards, a cumbersome, sometimes error-prone process.  

A license management system offers them a better option. It empowers a company to streamline licensing data input. In addition, the solution provides them with dashboards that enable executives to synchronize license demand with their licensing options.

CoreView helps companies determine what licenses are used and unused, so firms eliminate unnecessary provisioning of M365 services. They leverage its metering tools that outline the last activity date per software product for every licensed user. With it, they identify unused licenses. For instance, the users are no longer with your organization or whose job requirements have changed. The company can then reclaim and reuse those licenses, cutting down on unnecessary expenditures.

Correlate User Needs to Licensing Options

They also align individual and department users to the best-fit license type. The increases are coming unevenly. The solutions with the lowest prices, Business Basic and E1, have the highest increases at 25% and 20%. The most expensive option, E5, has the lowest bump.

So, companies want to be sure that employees have the appropriate solutions. In essence, not all staff needs Microsoft 365 Apps for Enterprise, the rich-client (Windows and macOS) Office suite that comes with O365 E3/E5 and M365 E3/E5. They can instead opt for web versions of the productivity tool, especially if they do not work with PowerBI Pro. Making such changes reduces licensing expenditures, often quite dramatically.

Beat the Price Hike Deadline

A company can also delay the price increases by talking with Microsoft and renewing its current licensing agreement before the March 1 deadline. Subscriptions, such as a current Enterprise Agreement or a 12-month Cloud Solution Provider subscription, change on their renewal dates and not March 1.

With the tool, a company assesses the impact of the price hike, which will come eventually. Therefore, an enterprise needs to conduct an internal usage assessment and determine the degree that their costs will change for each licensed user. They need to then create a funding path that moves them forward with the new pricing model.

In preparation for the renewal, customers renewing their agreements after March 2022 should review the new pricing to ensure that their budget estimates are accurate. They need to engage with their IT and finance teams, determine how the changes will impact their budgets, and then plan accordingly.

Change is certainly coming in regard to Microsoft M365 licensing. Businesses need to start preparing for it now, so they can manage the transition proactively. They do not want to be caught unaware when the price hikes are implemented. The first step in the process begins with deploying a robust license management solution, like CoreView; entails conducting a close examination of their current usage patterns, and finally mapping out a plan to fund the additional costs.

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Created by M365 experts, for M365 experts.