Pricing Update for Microsoft 365

3 min read
August 19, 2021

Office 365 was first released in 2011, and it's grown a lot since then. Microsoft has added 24 apps and 1,400+ new features over that time---without any substantial price increases. After a decade of innovation and rebranding itself several times, Microsoft is announcing its first commercial pricing update for Microsoft 365. Customers have some advance notice, as this pricing change will not be effective until March 1, 2022. It's also important to note that not all SKUs will be receiving a price increase. Here's a list of the upcoming changes:


Product Old Price New Price
Microsoft 365 E3 $32 $36
Office 365 E1 $8 $10
Office 365 E3 $20 $23
Office 365 E5 $35 $38
Microsoft 365 Business Basic $5 $6
Microsoft 365 Business Premium $20 $22


Some groups are excluded from this increase: there are no price changes for education or consumer products at this time, and U.S. government (GCC and GCC High) customers will see price increases phased in over the next several years instead. Nonprofit price changes are delayed a few more months until September 1, 2022.

Unlimited Dial-in for Teams Meetings

Diagram of Teams Audio conferencing updates.

Microsoft also announced separately that those with a paid license for Microsoft 365 will be able to add unlimited dial-in conferencing to all Teams meetings, starting March 2022 as well. This means that your users will be able to dial in to any Teams meeting even if they don't have internet access, for no additional cost. This is a great value and will be available as a $0 add-on SKU.

What the Pricing Increases are Paying for

It's a different world than it was ten years ago, and Microsoft has provided its customers with the resources we need in today's environment. What are some of the added benefits that the Microsoft 365 toolkit has grown to include? While improved apps and features are too numerous to mention, these are a few of the most impactful additions we've come to rely on:

  • Microsoft Teams was added to the M365 suite at no additional cost in November 2016. Teams now has over 250 million monthly active users (MAU) and has been the centerpiece for many work-from-home strategies. It's the
    only solution that weaves together meetings, calls, chats, other collaboration tools, and the ability to automate business processes. (Here at Infused Innovations, our own daily workflow is based around Microsoft Teams with PowerApps integration.)
  • Security features have been added and improved, making our work surfaces stronger and safer. Data loss prevention (DLP) for documents and emails is a crucial tool for protecting sensitive data and guarding against breaches. Microsoft's DLP has been evaluated by Forrester with the top rating possible. Other important security additions over the years include Office messaging encryption and attack surface reduction capabilities.
  • Growing innovation includes the advancement of artificial intelligence. Microsoft has added new AI-supported capabilities that greatly aid task automation, information gathering, and communication at a level we've never reached before.

Our Thoughts on the Pricing Update for Microsoft 365

Consolidating IT vendors is the simplest and wisest way to equip and secure an organization, and Microsoft 365 E5 provides the best value for doing this. The pricing updates actually reduce the step-up costs when you're budgeting for Microsoft Defender XDR. And as M365 E5 licenses will not be receiving a price increase, this should make budgeting for the entire suite an easier decision. For small to medium businesses running Office 365 E3, it now makes even more sense to move to Microsoft 365 Business Premium, since these changes make it the less expensive and more featured solution. 

Microsoft has kept their prices fixed during the pandemic while competitors took the opportunity to raise them. With the global economy starting to recover, Microsoft is demonstrating its commitment to helping customers succeed in the new hybrid world of work.

For more details on what's included in different Microsoft licenses, see our highly acclaimed Complete Office 365 and Microsoft 365 Licensing Comparison.

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