Microsoft announced that as of December 1st, they would be offering the option to pay monthly for an annual subscription of Microsoft 365 Copilot, Microsoft 365 Copilot for Sales, and Microsoft 365 Copilot for Service. This billing option will be priced at 5% higher than the upfront annual payment option. According to Microsoft, in order to standardize their billing structure, they will be applying the price increase to all their licenses under the same billing model in April 2025.
What Products will be Affected?
All Microsoft 365 licenses annual and triennial term subscriptions being billed monthly will be affected by the price increase including:
- Microsoft 365
- Office 365
- Enterprise Mobility + Security
- Windows 365
- Microsoft Dynamics 365 Services
- Microsoft Power Platform
- Other Online Services (Microsoft has not specified which online services will be affected)
You will not see changes to your current monthly billing until after April 1st, 2025, on your subscription renewal date. You can choose to switch to the annual billing plan at the time of renewal for a lower price.
Teams Phone & Power BI
Additionally, Microsoft has announced substantial price increases to their Teams Phone and Power BI licenses.
The Teams Phone Standard and the Teams Phone Frontline will increase 25%.
- Teams Phone Standard, currently $8 will be $10
- Teams Phone Frontline, currently $4 will be $5
- Calling plans will also be increasing by approximately $2 per user per month.
The Power BI Pro and Power BI Premium licenses will receive a 40% and 20% increase respectively.
- Power BI Pro currently $9.99 will be $14.
- Power BI Premium currently $20 will be $24.
These two licenses have not had a price increase since they’ve been released, and Microsoft claims these prices are reflective of the improvements and investments they’ve made in the software over the last few years.
Exemptions
Annual and triennial subscriptions that are paid in full at time of purchase are exempt from the price increase. Although it is worth noting that users will no longer be able to change their subscription mid-term, meaning once the purchase for the triennial subscription is made, users cannot change it to a shorter term at the one-year or two-year mark.
Non-profit organizations will continue to be eligible for the 15% discounted price. However, if the month-to-month billing option is selected, the 5% price increase will still be applied along with the discount.
The products that Microsoft has announced will keep the same pricing are Azure RI/Savings Plan, Marketplace, GitHub, AirGap, and on-premises software.
Final Thoughts
The month-to-month billing option offers users payment flexibility; however, it will now come at a higher cost. Microsoft also makes it very clear this option is still an annual subscription. This means users cannot cancel or stop paying for the subscription any time before the 12-month period ends.
All of the changes regarding Power BI and Teams Phones will not increase the price of Microsoft 365 E1/E3/E5 more than 5% with the month-to-month billing option, making buying the full suite more convenient than buying the individual licenses or smaller bundles.
While Microsoft has not officially released the prices for April 2025, users have an idea with these numbers. Users should expect to pay this increase in price from their provider in the upcoming year.
