On August 19th 2021, Microsoft’s Vice President, Jared Spataro, announced changes to their commercial pricing for Microsoft 365. Since March 2022, the following prices have come to effect:
- Microsoft 365 Business Basic from $5 to $6 per user
- Microsoft 365 Business Premium from $20 to $22
- Office 365 E1 from $8 to $10
- Office 365 E3 from $20 to $23
- Office 365 E5 from $35 to $38
- Microsoft 365 E3 from $32 to $36
So what can your telecom company learn from this and why?
Microsoft led the way changing from an upfront revenue model to a subscription.
Before the launch of Office 365, they sold popular software on a pay up-front basis with products like Word, PowerPoint & Excel. But back in 2011, Microsoft launched a new service called 365 where businesses would pay a small monthly subscription fee based on users which would give you access to the full Microsoft suite of products.
Since 2011, Microsoft have added new services like Teams & OneDrive to the subscription FOC and businesses have been able to benefit from these apps.
Microsoft now have over 300 million users, which means they have at least 1.5 Billion £s of revenue coming in every single month.
The price increase will add at least an additional 300 million per month to their revenue. That’s £3.6 Billion annually. Yes, a few customers may cancel the odd user here and there but nowhere near enough for them to lose on this.
What can you learn?
Microsoft haven’t just done a % price increase, over the years they’ve added value to the subscription FOC and now are simply adding an additional £ per month to subscriptions so they can add more value.
This may be a struggle for you to do. What services can you add to your customers’ bills and add value to their business?
That’s where Candio can help! We can support you to roll out either of the below services to all your customers as part of a price increase.
- Web Listings: One simple platform to control & update all of your business listings and improve findability on 50+ directories.
- Website Optimiser: Detect bugs, get real-time alters and ranking analytics. Win more customers with a trouble-free website.
We’ll create accounts for all of your customers and deliver instant benefits. Unlike the recent Microsoft news, customers can cancel the service if they feel it’s not for them.