Microsoft announced on Tuesday specific price changes that will affect enterprise customers of its cloud-based subscription services. In short, the tech giant is providing a monthly billing option for annual contract customers of services such as Microsoft 365, Windows 365 and Power Platform. These changes are meant to help clients maintain “cash flow flexibility,” per Microsoft.
Microsoft 365 Copilot Monthly Billing
Beginning December 1, Microsoft will give customers with an annual Microsoft 365 Copilot agreement the opportunity to pay monthly in lieu of a single upfront fee. Until this point, Microsoft 365 Copilot costs $360 per user per year ($30 per month). The changes also affect Microsoft 365 Copilot for Sales and Microsoft 365 Copilot for Service, which currently costs $600 per user per year ($50 per month).
The new monthly billing alternative will increase these prices by 5 percent, meaning that Microsoft 365 Copilot will cost $378 per user per year ($31.50 per month) and Sales and Service each $630 per user per year ($52.50 per month).
Microsoft’s FAQ outlines a few caveats to consider.
- The monthly billing structure will not be immediately available to nonprofit organizations, but education and government customers will have access.
- Selecting the monthly billing option for an annual subscription doesn’t mean that a company can cancel its subscription at any time – there is still a one-year commitment, according to the agreement.
Price Changes are Not Just for Microsoft 365
Microsoft is also looking to standardize across other products. Starting April 1, 2025, a monthly billing option (complete with a 5% increase) will be available for Microsoft 365, Office 365, Enterprise Mobility + Security, Windows 365, Microsoft Dynamics 365 Services, and Microsoft Power Platform. Some of the products in Microsoft’s “other online services” category will also offer this pricing structure, although Microsoft has not indicated which will be included. Microsoft FAQ states: “By aligning our pricing strategy across channels and segments, we ensure consistency and transparency across all platforms.”
On-premises products, Azure Reserved Instances, Azure Savings Plans, Marketplace, GitHub, and AirGap will not be affected.
Power BI and Microsoft Teams Phone
Power BI and Microsoft Teams Phone are also subject to price changes, the first since either product launched. Beginning on April 1, 2025, the cost of an annual billing subscription to Power BI Pro will increase from $10 per user per month to $14 per user per month, while Power BI Premium Per User (PPU) will increase from $20 per user per month to $24 per user per month.
According to Microsoft, over 1,500 enhancements to Power BI have been applied over the past six years. The price hike is meant to reflect all the improvements, Microsoft said. “Since its introduction in GA [in 2015], the price of Power BI Pro and PPU has stayed unchanged,” the FAQ read. “The increase in price is reflective of all the investment in the innovation we have delivered over the years.”
That said, the pricing structure for Power BI Capacities (F SKU), Power BI Report Server, Power BI Embedded, and Power BI Free remains unchanged.
Microsoft’s Government Cloud, education, and nonprofit customers will also not be affected by the changes.
On April 1, 2025, Microsoft Teams Phone Standard will increase from $8 per user per month to $10 per user per month, while Teams Phone Standard for Frontline Workers will go from $4 per user per month to $5 per user per month.
Have Questions? Call Alliance IT
If you have questions about your Microsoft products and how these pricing changes may affect you, call the experts at Alliance IT. Managed services may be an effective solution for your organization.
