Microsoft 365 business subscribers set for price hike

20 Aug 2021

Image: © Angelov/

Tech giant Microsoft said the price increases are ‘the first substantive pricing update’ since it launched Office 365 a decade ago.

Microsoft has announced a price increase for commercial subscriptions to its Microsoft 365 software package.

The changed pricing will come into effect in March 2022, but education and consumer subscriptions will not be affected at this time.

A Microsoft 365 Business Basic subscription will go up from $5 to $6 per user per month, while Microsoft 365 Business Premium will increase to $22 from $20.

Office 365 E1, which includes web-only versions of the company’s popular apps such as Word, Excel, Outlook and OneNote, will move to $10 from $8, and Office 365 E3 will rise to $23 from $20.

Microsoft 365 E3 will jump to $36 from $32, and finally the premium Office 365 E5 tier will cost $38 up from $35.

These increases will apply to commercial customers globally, with local market adjustments.

The company’s corporate VP for Microsoft 365, Jared Spataro, wrote in a blog post that the change marked the “first substantive pricing update” since it launched Office 365 in 2011.

“This updated pricing reflects the increased value we have delivered to our customers over the past 10 years,” he added.

There are now around 300m commercial Office 365 “paid seats”, Spataro said. The company’s price increases are expected to boost its revenue and profits, as its Office line is one of its top performing products in terms of sales and most Office revenue is tied to commercial use.

At its launch a decade ago, Office 365 included Word, Excel, PowerPoint, Outlook, Lync, Exchange and InfoPath.

Since 2011, it has expanded this suite to include native apps such as OneDrive, OneNote Class Notebook, Publisher, SharePoint, Staff Hub, Stream, Sway, Teams, Shifts, Power Platform, To-Do, Forms and Bookings.

In 2017, the company launched the Microsoft Teams platform, which received a boost during the mass shift to remote working last year and is now used by more than 250m people in workplaces all over the world to chat, call and collaborate virtually.

That same year, it launched Microsoft 365 to bring together Office, Windows and other services.

Blathnaid O’Dea was a Careers reporter at Silicon Republic until 2024.