Back in August, Microsoft confirmed Office 365 business subscriptions will get a price hike, which will come into effect in March 2022. This means both monthly and annual subscriptions will become more expensive. Most customers are comfortable with this, but there is one issue that is causing some blowback amongst organizations.
Specifically, Microsoft will place a tax on Office 365 shorter subscriptions. This move seems designed to try to push customers into longer term commitments. Those wanting to stick on a rolling monthly plan will be facing a 20% extra cost on top of the price hike.
It seems organizations and customers are not too thrilled about this decision from Microsoft. According to CNBC, companies who pay for Office 365 are not happy at all because some require flexibility on how they scale their services.
The new outlet found internal Microsoft documents that suggest the company will take payments from customers (long term or short term) even if the subscriber cancels mid-way through the contact.
CNBC says Microsoft’s partners have been locked in “intense meetings” with the company trying to reach a resolution that suits customers and Microsoft alike.
It is unclear how Microsoft will respond, but the company is likely to try and ride out the storm. If there is any chance that customers will leave Office 365 for the arms of Google Workspace, Microsoft may reverse its decision.
Furthrmore, any risk to cloud user growth will also mean Microsoft could remove the short-term subscriber tax. Of course, we will report on any official response from the company.
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