Nonprofit Microsoft 365 price increases coming September 2022

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Microsoft have just announced that they will be increasing the price of five nonprofit Microsoft 365 licences from 1st September 2022.

Commercial organisations recently had a price increase come into effect from March 2022 so this isn’t unsurprising, however we understand a price increase is never welcome news. This increase maintains the 60-75% discount compared to commercial licensing.

What products are impacted?

The five products that will have their prices increased are below – please note pricing is currently only available in $USD:

  • Office 365 E1: $2.50 (from $2) – 25% increase
  • Office 365 E3: $5.75 (from $4.50) – 28% increase
  • Office 365 E5: $15.20 (from $14) – 9% increase
  • Microsoft 365 Business Premium: $5.50 (from $5) – 10% increase
  • Microsoft 365 E3: $9 (from $8) – 12.5% increase

Microsoft will not be changing the pricing for Microsoft 365 Business Standard, the Frontline SKUs or Microsoft 365 E5.

Why are the prices increasing?

This price increase is due to the number of new products and services that Microsoft have introduced over the past few years, such as Microsoft Teams, as Microsoft have "added 24 new apps and more than 1,400 features."

When will I be impacted?

The price increase comes into effect on 1st September 2022, however existing customers are not impacted until their renewal after this date.

Are the nonprofit grants, benefits and free licences impacted?

Luckily, this does not impact any of the current nonprofit benefits and offers. These include:

  • $3,500 free Azure credits
  • Microsoft 365 Business Premium grant for up to 10 seats and Microsoft 365 Business Basic free for up to 300 users or;
  • For those with over 300 staff, Microsoft 365 E1 free for 2000 licenses for eligible staff members available through an Enterprise Agreement (EA)
  • Dynamics 365 Sales Enterprise free for up to 5 seats
  • Power Apps free for up to 10 seats (the “Per App” plan)

What about the New Commerce Experience?

If you haven’t heard of the New Commerce Experience, or ‘NCE’ – this is a new licensing model for CSP licensing that came into effect in March 2022 for commercial organisations. NCE doesn’t impact nonprofits and there have been no communications or timelines for this, however it is likely to come into effect for nonprofits in the future.

The major changes that NCE brings are around the term commitments and enforcing licensing numbers. With NCE, you have to choose which term commitments you require:

  • Monthly – This gives the flexibility to increase and decrease the number of licences every month but comes with a 20% premium cost attached for the flexibility.
  • Annual – This commits you to a number of licences at a more attractive price for the annual term, however this sets a strict baseline for the term, which means that if staff numbers change and drop below the baseline you will still need to pay the baseline level.
  • Multi-Year – As above but with a three-year term commitment

Need help?

If you’d like to discuss how your licensing may be impacted and ways to reduce your Microsoft licensing costs, please contact us.

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