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Microsoft to raise prices for Office 365 and Microsoft 365 in March 2022

This marks the first "substantive" price increases to Office 365 since it was launched a decade ago

Microsoft's Office 365 apps on a smartphone

Microsoft has announced price increases for both Office 365 and Microsoft 365 services that will come into effect in March next year.  

The changes will apply to its commercial and business services, with consumer and education subscriptions remaining the same. 

The increase will also apply globally, with local market adjustments for certain regions, however only US pricing is available at present: Microsoft 365 Business Basic is going up from $5 to $6 per user and Microsoft 365 Business Premium will increase from $20 to $22. Office 365 E1 will rise from $8 to $10, Office 365 E3 will jump up from $20 to $23, Office 365 E5 will move from $35 to $38 and Microsoft 365 E3 changes from $32 to $36. 

These are the first "substantive" price increases to Office 365 since it was launched a decade ago, according to Microsoft, with only minor changes to the suites coming in over the last ten years. The reasoning for hiking them up now is partly to do with the higher demand for cloud-based services brought about by the pandemic, according to Jared Spataro, the corporate vice president for Microsoft 365.

"As leaders around the world look to empower their people for a more flexible, hybrid world of work, it's clear that every organisation will need a new operating model across people, places, and processes," Spataro wrote in a blog post. "We're committed to building on the value we've delivered over the past decade to continuously provide innovation that helps our customers succeed and thrive today and well into the future."

The changes follow a period of immense growth for Microsoft and its cloud services; the firm recently surpassed the milestone valuation of $2 trillion and it has more than 300 million paid seats for Office 365. The tech giant has also added more than 20 apps to Office 365 since it originally launched, including Microsoft Teams, OneDrive and SharePoint.

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