Microsoft 365 Price Raised as Much as 20 Percent, to Take Effect in 6 Months

Microsoft on Thursday said it will raise prices as much as 20 percent for a bundle of software called Microsoft 365 that includes popular apps like Teams and Outlook.

The increases will take effect within six months, Microsoft said in a blog post announcing the change.

The Microsoft 365 suite is the cornerstone of the company's productivity and business process segment, which had sales of $53.9 billion (roughly Rs. 4,01,128 crores) in its most recent fiscal year, about a third of Microsoft's overall $168 billion (roughly Rs. 12,50,268 crores) in sales.

The increases will affect commercial customers and are the first since Microsoft rolled out the service a decade ago. Jared Spataro, corporate vice president for Microsoft 365, said the company has added two dozen apps to the suite since it launched.

"This updated pricing reflects the increased value we have delivered to our customers over the past 10 years," Spataro said in the post.

At the low end, Microsoft 365 Business Basic plans will rise 20 percent from $5 (roughly Rs. 372) per user to $6 (roughly Rs. 446), while the highest-end versions of the suite — Microsoft 365 E3 — will have a smaller rise of 12.5 percent from $32 (roughly Rs. 2,381) to $36 (roughly Rs. 2,680) per user.

Microsoft said it is not changing prices for the consumer or education versions of the software.

Shares of Microsoft hit a record high on Thursday and were last up 1.8 percent at $295.96 (roughly Rs. 22,026).

© Thomson Reuters 2021