Microsoft’s O365 price change: What every customer needs to know

 In Cloud, Microsoft, Software

Microsoft Office 365 (O365) has seen its fair share of changes, both in features and functionality and in price point. Most notably, in May 2012 and then again in September 2013, Microsoft decreased pricing on O365 by roughly 15 percent in both instances. Now, effective August 1, Microsoft increased pricing by 15 percent on its O365 Service Plans E1, E3, and E4, aligning them with the pricing offered back in May 2012.

This price change affects both Enterprise Agreement direct and indirect programs whereby an organization is adding O365 plan subscriptions to the agreement for net new users or is transitioning qualifying licenses with Software Assurance (SA) to O365 plan subscriptions.

O365 Banner

In conjunction with this O365 price change, Microsoft will also be offering a new, discounted SKU for customers that have invested in fully paid perpetual licenses with SA and are looking to transition to O365. This new SKU, called O365 from SA, will be available to purchase at your agreement anniversary date or upon renewal of enrollment. Eligibility is dependent on your organization’s current on-premises entitlements at the time of transition.

The following table illustrates when customers are eligible to apply an O365 from SA user subscription license (USL) to their agreement either at agreement anniversary or agreement renewal.

Per the August 2014 Microsoft Product List:

SHI O365 Transition Chart

A few things to note on this new SKU offering:

  • It does not change any pre-existing licensing requirements associated with the Enterprise Agreement enterprise-wide commitments. Organizations that have a qualifying fully paid Core Client Access License (CAL) or Enterprise CAL (ECAL) and want to transition to O365 will still need to ensure they are properly licensed for their Core CAL/ECAL workloads that will remain on premises. This is accomplished with the purchase of a CAL Bridge.
  • Future users added as part of the Enterprise Agreement enterprise-wide commitment must be covered with an O365 full USL. The ability to procure the O365 from SA SKU is specific to existing on-premises license quantities transitioning to cloud, and not net new users being added to the agreement.
  • If transitioning a subset of users to O365, the remaining on-premises qualifying SA-only licenses will still be eligible for the O365 from SA SKU. This eligibility to transition applies to the number of fully paid perpetual licenses that have not yet been transitioned. Once all eligible licenses have been transitioned, new O365 subscriptions will be at the newly established increased pricing.

If you’re planning to transition to O365 or simply evaluating your options, please contact your SHI Account Executive to learn about how these changes may apply.

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