Microsoft introduces standardized pricing for SaaS subscriptions. This is particularly bad news for the largest customers, who will see prices rise significantly.
With a brief announcement, Microsoft introduces new pricing for the Office 365 and Dynamics 365 bundles. In short, the change means that Microsoft will no longer work with “price levels”. Organizations large and small will pay the same price starting November 1.
Everyone Equal
Previously, Microsoft worked with different tiers, divided by size. This system gave larger companies with a higher number of users more room to obtain discounts on the monthly or annual subscription cost. This is not uncommon in the SaaS world: Broadcom, for example, makes it a point to favor large customers.
For Microsoft, every customer is now equal, whether they are large or small. With standardized pricing, it aims to increase “transparency”. Microsoft’s licensing model has often come under fire, especially in Europe. But it has also faced criticism in the United States for offering certain security tools only to the most expensive subscriptions.
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Microsoft No Longer Offers Discounts to Large Companies
Large Companies Pay More
The change Microsoft is implementing will mainly affect large companies, experts warn. The costs of SaaS services for customers in the “enterprise” segment could increase by more than ten percent overnight. The new rates take effect on November 1. Microsoft leaves the door open to negotiate prices before the deadline with early renewal.
Some customers receive an exception. This applies to government and education plans, among others. The rates for on-premises products remain unchanged.