Microsoft 365 Price Increases - 2025

If your business relies on Microsoft 365 or Office 365 subscriptions, you may have heard about upcoming price changes. Starting April 1, 2025, Microsoft is implementing a 5% price increase for certain licensing plans. This is not a Fusion Connect price increase—we are simply passing through the increases made by Microsoft.

Does this apply to you?

Microsoft is changing the price of the New Commerce Experience (NCE) licensing plans that have an annual commitment but are billed monthly (A/M). If you fall into this category, your price will increase by 5% upon renewal. However, if you are on an annual prepaid plan (A/A), your price remains unchanged.

Additionally, there’s a slight increase for Teams Phone Standard users. The price will rise from $96/user to $120/user, and if you choose an annual commitment but pay monthly (A/M), the additional surcharge of 5% will be assessed, unless you have it bundled with an E5 license (A/A), in which case your price stays the same. This is the first increase for Phone Standard since its introduction in 2017.

Finally, there are increases to Power BI Pro & Premium per User Licenses to $168/user & $288/user respectively on the Annual/Annual (A/A) and then the additional 5% surcharge will be assessed if you choose an annual commitment but pay monthly (A/M). This will be the first price update on this product since it was launched in 2015.

Why is this happening?

Microsoft has been making significant changes to how its licenses are structured, including the unbundling of Microsoft Teams from its enterprise suites. As part of this shift, Microsoft is adjusting pricing for different billing models, which is why the 5% increase is now being introduced. (Read Microsoft’s Announcement)

What can you do about it?

If you want to avoid the 5% price increase one option is to switch to an annual prepaid plan (A/A) at your renewal. This allows you to lock in current pricing when the new rates take effect.

How much will this cost?

Here’s a simple example as seen in Table 1 below:

• If you currently pay $120 per year ($10/month) on an annual subscription billed monthly, your new cost will be $126 per year ($10.50/month) after the increase.
• If you are on monthly billing for a monthly subscription, your surcharge remains at 20%, meaning you will continue paying a higher monthly rate compared to annual plans.

If your renewal date is before April 1, 2025, you won’t be affected until your next renewal cycle. However, planning ahead can help you make the best decision for your business. If you’re unsure about how these changes impact your specific licensing model, reach out to your account representative for guidance. If you're not a customer of Fusion Connect, contact us today for assistance with optimizing your licensing purchases.

In Closing

This price increase is part of Microsoft’s broader changes to how licenses are structured and billed. While Fusion Connect has no control over this change, we are committed to helping our customers navigate their options. If you have any questions or want to explore alternative billing models to mitigate the impact, our team is happy to assist.