Microsoft to Raise Prices as Much as 20% for Some Flagship Products

Microsoft Announces Up to 20% Price Increase for Microsoft 365

By Stephen Nellis

(Reuters) – Microsoft Corp on Thursday said it will raise prices as much as 20% for a bundle of software called Microsoft 365 that includes popular apps like Teams and Outlook.

The increases will take effect within six months, Microsoft said in a blog post https://bit.ly/3k6RSg7 announcing the change.

The Microsoft 365 suite is the cornerstone of the company’s productivity and business process segment, which had sales of $53.9 billion in its most recent fiscal year, about a third of Microsoft’s overall $168 billion in sales.

The increases will affect commercial customers and are the first since Microsoft rolled out the service a decade ago. Jared Spataro, corporate vice president for Microsoft 365, said the company has added two dozen apps to the suite since it launched.

“This updated pricing reflects the increased value we have delivered to our customers over the past 10 years,” Spataro said in the post.

At the low end, basic business plans will rise 20% from $5 per user to $6, while the highest-end versions of the suite will have a smaller rise of 12.5% from $32 to $36 per user.

Microsoft said it is not changing prices for the consumer or education versions of the software.

Shares of Microsoft hit a record high on Thursday and were last up 1.8% at $295.96.

(Reporting by Tiyashi Datta in Bengaluru and Stephen Nellis in San Francisco; Editing by Arun Koyyur; Editing by David Holmes)