Certain Microsoft Subscriptions Face 5 Percent Premium; Teams Phone, Power BI Price Increases Set

Starting April 1, Microsoft will raise by 5 percent the annual commitment, monthly billing option for all new and renewing subscriptions across Buy Online, CSP and MCA-E.

Microsoft plans to introduce a 5 percent premium on various annual subscriptions where the customer wants to pay monthly instead of once a year, starting the premium launch for some of its Copilot artificial intelligence tool plans.

The Redmond, Wash.-based tech giant will launch the premium on Dec. 1 for Microsoft 365 Copilot, Copilot for Sales and Copilot for Service annual subscriptions bought through the vendor’s Buy Online, Cloud Solution Provider and Microsoft Customer Agreement for enterprise motions, Microsoft revealed Tuesday.

Starting April 1, Microsoft will raise by 5 percent the annual commitment, monthly billing option for all new and renewing subscriptions across Buy Online, CSP and MCA-E. Customers will have the ability to switch from monthly billing to annual billing at renewal date, according to the vendor.

“This change aims to continue providing customers with cash flow flexibility while maintaining the value and benefits of our services,” according to a document for partners released by Microsoft. “By aligning our pricing strategy across channels and segments, we ensure consistency and transparency across all platforms.”

[RELATED: Microsoft Licensing, Billing Changes Hit Copilot, Enterprise Agreements]

Randy Jorgensen, managing member of South Jordan, Utah-based Microsoft partner RJNetworks, was among a group of solution providers who told CRN the new premium is not a positive change for some customers, raising similar concerns from when Microsoft rolled out a 20 percent premium on month-to-month commitments under its new commerce experience (NCE) platform.

“Most small businesses are completely trapped into using their mailboxes, and at least they could pay monthly to help swallow the cost,” Jorgensen said. “Now they have to pay more or come up with a bunch of money once a year.”

Products in the following suites should see the premium, according to Microsoft:

• Microsoft 365
• Office 365
• Enterprise Mobility+Security (EMS)
• Windows 365
• Microsoft Dynamics 365 Services
• Microsoft Power Platform

Various products not subject to the premium include:

• Azure Reserved Instances
• The Azure savings plan
• GitHub
• On-premises software

Education and government customers will also pay the 5 percent premium if they want monthly billing for annual terms. Nonprofits are not eligible for the new payment plan.

Microsoft Price Increases

Also on April 1, Microsoft will raise the price of Teams Phone by 25 percent, from $8 to $10 per user, per month for annual commitment, annual billing.

The price of Power BI Pro will grow 40 percent from $10 to $14 per user, per month for that same billing plan.

The price of Power BI Premium Per Use will grow 20 percent from $20 per user, per month to $24 per user, per month for that plan.

Customers who buy Teams Phone or Power BI through Microsoft 365 E5 or Office 365 E5 annual term subscriptions with annual billing will not see a price change, according to Microsoft.

Annual commitments, monthly billing for Teams Phone, Power BI Pro and Power BI Premium Per Use will still have the 5 percent premium, according to Microsoft. This is the first price increase to stand-alone Teams Phone offers since its launch in 2017 and first price increase to Power BI offers since the product’s launch in 2015.

Microsoft will also disallow midterm billing frequency changes for three-year offers starting April 1. Instead, customers can make billing frequency changes at renewal, according to the vendor.

Microsoft did not say in its partner document whether the price level changes will apply in EA for Copilot or whether month-to-month plans are expected for M365 Copilot.

Microsoft Offers Discounts

For solution providers selling Copilot, a 15 percent discount on M365 Copilot is available for the monthly billing, annual commitment plan. Customers must buy at least 10 licenses for the discount.

The discount expires on Dec. 31, but customers who commit to a 12-month subscription secure the discounted price for the duration and can add up to 300 licenses, according to Microsoft.

Customers who renew plans before April 1 lock in the existing price until the following renewal. A monthly bill, annual commitment renewal on March 30, 2025, for example, won’t see the price increase until March 1, 2026.

Another possible help to customers is a 15 percent discount on Microsoft 365 E5 set to run Jan. 1 to June 30 for CSP partners, according to Microsoft.

Teams Phone Price Increase

The new Teams Phone price increase will come out to $120 per user, per year, according to Microsoft.

“This price update … is reflective of the increased value we have delivered to our customers to enable flexible, smart and reliable calling natively in Teams,” according to the Microsoft document for partners. “With over 20 million PSTN-enabled users, Teams Phone is trusted for its AI-powered features that enhance communication, advanced call management capabilities keeping organizations connected, and improved reliability and survivability. … Teams Phone remains competitively priced compared to other cloud calling solutions in the market.”

Some Teams Phone bundles under annual subscription, monthly billing plans will also see price increases. Those include:

• Teams Phone Standard for Frontline Workers will grow 25 percent, from $4 per user, per month to $5 per user, per month, or $60 per user, per year.
• Teams Phone with pay-as-you-go calling for U.S. users will grow about 18 percent, going from $11 per user, per month to $13 per user, per month, or $156 per user, per year.
• Teams Phone with Calling Plan in the U.S. will grow about 13 percent, going from $15 per user, per month to $17 per user, per month, or $204 per user, per year.
• Teams Phone with domestic and international calling will grow about 6 percent, from $32 per user, per month to $34 per user, per month, or $408 per user, per year.

Customers with existing Teams Phone stand-alone licenses can have the current pricing until renewal. New customers buying Teams Phone licenses after April 1 will pay under the new pricing plans.

On Microsoft’s latest quarterly earnings call Oct. 30, Chairman and CEO Satya Nadella said that usage of the Teams platform “remains at all-time highs as people use it to streamline all their communications.”

Nearly 75 percent of Teams Enterprise customers now buy Premium, Phone or Rooms, Nadella said.

Power BI Price Increase

Power BI products not seeing a price increase include Power BI Report Server and Power BI embedded, according to Microsoft.

“Power BI Pro remains competitively priced compared to other BI solutions in the market,” according to the Microsoft document for partners explaining the price increases. The Power BI increases will not hit government, education or nonprofit customers.

On Tuesday, Kim Manis, Microsoft vice president of product management for its Fabric and Power BI offerings, said in a blog post that Power BI has more than 350,000 organization users and more than 6.5 million developer users. The Pro offer was introduced in 2015 and Power BI Premium Per User (PPU) launched in 2021.

“In the last six years alone, we’ve launched more than 1,500 updates across our Power BI portfolio,” Manis said in the blog post. “We continue to listen to our partners and customers and implement new enhancements every month.”