Microsoft to hike Office 365 price upto 20%

Microsoft Corp. announced on Thursday that it would hike costs for Microsoft 365, a software bundle that includes popular programmes like Teams and Outlook, by up to 20%.

In a blog post announcing the move, Microsoft stated that the price changes would take effect in six months. Since Microsoft launched Office 365 in 2011, this is the first substantial pricing change. Microsoft has also grown Office in recent years by enlisting the help of some businesses to purchase enhanced cloud subscriptions and by enrolling front-line employees.

The Microsoft 365 suite is the centrepiece of the company's productivity and business process division, which generated $53.9 billion in revenue last fiscal year, accounting for over a third of Microsoft's entire $168 billion in revenue.

Commercial clients would be affected by the increases, which are the first since Microsoft launched the programme a decade ago. Since the suite's inception, Microsoft has added two dozen apps, according to Jared Spataro, corporate vice president for Microsoft 365. Given that the Office line is the company's top product in terms of sales, and most Office revenue is connected to business use, the price hikes will enhance Microsoft's total revenue and profit.

"This improved pricing represents the additional value we've offered to our clients over the last ten years," Spataro wrote in the blog post. Spataro stated that the bundle now includes, among other things, the Teams communication software, the Whiteboard collaboration app, and Power Platform application-development tools for non-developers.

Basic business plans will increase by 20%, from $5 to $6 per user, while the highest-end versions of the suite will increase by 12.5 percent, from $32 to $36 per user.

Microsoft has stated that the prices of the consumer and educational versions of the programme will not change.

Microsoft's stock struck a new high on Thursday, closing at $295.96, up 1.8 percent.

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