Everything You Need to Know About Microsoft’s Upcoming Price Increase and Updates
Collaborating with an ITAM Managed Service provider enables software asset management (SAM) and IT Procurement teams to leverage the knowledge of subject matter experts dedicated to staying abreast of all updates, license changes, contract changes, and price increases for the software vendors in their remit. Through this service, clients can focus on high-value SAM activities supported by experts to inform them of actions required to remediate risk and optimize spend.
On October 1, 2024, Microsoft Dynamics 365 pricing is going up by 9-14% for both on-premises and cloud. Preparation will be required to respond to the substantial impact on budgets this price increase will have.
Mandi Sue Bleau, Anglepoint’s Global Practice Lead, Microsoft has nearly 25 years of experience with this software vendor and has shared the impact of some of these changes that you should be prepared for.
Prices for Dynamics 365 on-premises customer engagement and operations products will increase by the same percentage as the respective cloud versions. Pricing for cloud products, such as Microsoft Dynamics 365 Business Central, will remain unchanged. These software price increases will apply globally to new and existing customers (upon renewal as of October 1, 2024), and the products will be priced comparably in other currencies. To comply with local regulations, U.S. government list prices for the same products will increase by 10% effective October 1, 2024, followed by another smaller increase effective October 1, 2025, to bring parity with commercial pricing outlined above.
This table details the changes you can expect to see:
Unbundling Microsoft Teams
To provide global consistency and clarity for clients, Microsoft has updated the licensing structure for Microsoft 365, Office 365, and Teams, outside of Europe. These changes align with recent updates in the European Economic Area (EEA) and Switzerland. This change comes because of antitrust concerns and regulatory pressure as it was deemed that the bundling gave Microsoft an unfair advantage in the market. It effectively means Teams will no longer be included in the Enterprise agreement as an additional purchase.
Microsoft explains how customers may be :
- Customers who currently subscribe to any of the suites involved will have new options. They can continue to use, renew, upgrade, and add seats to their current plans as usual. Or, if they wish to switch to the new lineup, they can do so on their contract anniversary or renewal. Read more
- Net new subscribers to Office/Microsoft 365 Enterprise Suites outside the EEA and Switzerland who wish to provide their end users with Teams will need to purchase two SKUs: one Microsoft 365 (no Teams) or Office 365 (no Teams) suite and Microsoft Teams Enterprise.
See details of the new lineup in the table below:
Changes to Frontline Suites
Frontline Suites from Microsoft are designed to cater to the needs of frontline workers who primarily interact with customers while staying connected to the rest of their organization. Current Frontline Suites will coexist with this new lineup.
Customers can choose between the existing Microsoft 365 F1, Office 365 F3, and Microsoft 365 F3 Suites with Teams included, or the new versions of those suites without Teams. Be sure to identify your Frontline Suites within your EA.
See details of the new lineup in the table below:
Changes to Microsoft 365 Business Suites
Microsoft 365 Business Suites offer various level options, each with different feature offerings. These will also coexist with the new lineup. Customers will be able to choose between the existing Microsoft 365 Business Basic, Microsoft 365 Business Standard, and Microsoft 365 Business Premium Suites, either with Teams or the new versions of those suites without Teams.
See details of the new lineup in the table below:
Azure changes
Azure has also undergone some changes. The compute reservation exchanges for Azure Virtual Machine, Azure Dedicated Host, and Azure App Service have been extended until further notice. This was originally planned to end on January 1st, 2024, but you can now continue to exchange your compute reservations for different instance series and regions until at least July 1st, 2024.
Any future changes will be announced with at least 6 months’ warning to allow remediation. This extension will enable organizations to assess future spend and optimization opportunities more effectively. These exchanges are only changing for the above-mentioned services (Azure Virtual Machine, Azure Dedicated Host, and Azure App Service) so any other reservations will remain unaffected by the policy changes (e.g., Azure AWS).
Reservations purchased before July 1st, 2024, will reserve the right to exchange one additional time after the grace period ends. It’s also worth noting that any compute reservations purchased after January 1st, 2024, (in the extended grace period) will retain the right to one more exchange when the grace period ends. This exchange policy is not extended to Azure Virtual Machine, Azure Dedicated Host, or Azure App Service reservations, as these will have a no-exchange policy).
You can find out more about the changes to the Azure reservation exchange policy here.
How can Anglepoint help?
Anglepoint’s expert team will work with your organization to provide an accurate view of your Microsoft estate and ensure that you are prepared to address these changes and price increases. Through accurate forecasting, industry benchmarking, and building an accurate Bill of Materials for your renewal, we ensure that you have the best commercial and contractual agreements in place to future-proof your Microsoft estate.
Get in touch with our team to make sure you are ready for these changes.
We will be hosting a webinar “Microsoft webinar Microsoft 365 License Optimization through Effective User Profile Management” on August 14th where we dive into the subject of Microsoft price increases and offer some great recommendations to optimize spend. Anglepoint’s Microsoft licensing experts, Mandi Sue Bleau and Myles Adley, will share lessons learned from helping clients optimize their Microsoft 365 profiles.
Register for the webinar here.