If you’ve been keeping an eye on business news lately, you’ve probably seen the headlines about Microsoft’s upcoming price increases for Microsoft 365. With costs set to rise in April 2025, UK businesses are understandably concerned about how this will impact their IT budgets. At a time when every organisation is looking to get the most out of their cloud investments, these changes make it more important than ever to have a solid strategy in place.
Why Are Costs Rising?
Microsoft say the price increases are a result of several factors, including:
- Inflation and rising operational costs for Microsoft.
- Increased investment in security, AI and automation tools such as Microsoft Copilot.
- Enhanced compliance and governance features being integrated into Microsoft 365.
- Currency fluctuations leading to regional adjustments.
Microsoft 365 Price Increases in 2025
Beginning April 1, 2025, Microsoft will increase prices for annual New Commerce Experience (NCE) plans paid monthly by 5%. Organisations currently using this billing model can avoid the price hike by switching to prepaid annual plans or committing to a three-year subscription. Renewals completed before April 1, 2025, will lock in the current pricing until the next renewal cycle.
For example, if a subscription renews in March 2025, the existing rate will be retained until March 2026. This pricing strategy incentivises longer-term commitments, providing organisations with greater cost predictability and stability.
Key Takeaways:
- Microsoft 365 subscription prices will increase starting April 1, 2025, with a 5% hike for monthly NCE plans; switching to prepaid annual or three-year plans can help avoid the increase.
- Regional pricing adjustments will reflect currency fluctuations, with reductions in the UK (5-6%) and increases in Brazil (12%) effective February 2025.
- Microsoft Teams plans will see price increases, but bundled plans like Office 365 E5 and Microsoft 365 E5 remain unaffected.
- Microsoft Copilot will introduce a new monthly billing option (5% higher than annual prepaid) and include a free version of Copilot Chat, with added value through bundled features like SharePoint Advanced Management.
- Promotions include discounts on Copilot licences (15%), Business Premium upgrades (up to 20%), and special E3/E5 offers, requiring annual commitments for maximum savings.
Regional Currency Adjustments
Microsoft is revising its pricing to reflect regional currency fluctuations, which will vary depending on location. These adjustments are designed to align subscription costs with local economic conditions.
How Fordway Can Help
“One of our clients in the professional services sector was initially concerned about rising costs. After a detailed licensing audit, we helped them restructure their subscription model—eliminating redundant licences and switching to a multi-year commitment for core users. The result? A 22% reduction in overall Microsoft 365 costs while maintaining all essential features.”
Navigating these pricing changes can be challenging for organisations aiming to optimise costs while maintaining productivity. As an experienced Microsoft Solutions Partner, Fordway offers expert guidance and tailored solutions to help businesses adapt seamlessly. Here’s how we can support your organisation:
1. Cost Optimisation Strategies
Fordway’s licensing specialists analyse your Microsoft 365 usage and recommend cost-effective licensing models. Whether it’s switching to prepaid annual plans, consolidating redundant licences, or leveraging promotions, we ensure you get maximum value from your investment.
Cost Savings with E3 Add-ons
One of Fordway’s clients was using standalone E5 licences across their organisation. After analysing their needs, we recommended a combination of E3 licences with add-on features like Defender for Office 365 Plan 2 and Power BI Pro. This saved them 30% on licensing costs without losing critical functionality.
2. Flexible Licensing Options
We help organisations take advantage of the best licensing models available, including:
- Transitioning to cost-effective annual or three-year commitments.
- Identifying promotions and discounts that align with your business needs.
- Advising on Microsoft’s new billing structures to avoid unnecessary expenses.
As an example, several of our customers with seasonal or flexible workforces commit for their base user numbers on an annual or multi-year commitment, loving in the best available pricing, and add monthly subscriptions for the seasonal additional workers. Whilst the monthly licences are 20% more they are only required for 4 to 5 months a year.
3. Microsoft Copilot and AI Readiness
With Microsoft Copilot becoming an integral part of the Microsoft 365 ecosystem, we help businesses understand its benefits, deploy AI-powered productivity tools efficiently, and manage licensing to maximise ROI.
4. Security and Compliance Advisory
Price changes often coincide with feature enhancements. Fordway ensures organisations are not just adapting to cost shifts but also leveraging security, compliance, and productivity improvements. Our experts assess your existing setup and implement strategies to enhance security while keeping costs manageable. Learn more about Fordway’s Security & Compliance Services.
Plan Ahead with Fordway
Microsoft’s upcoming pricing changes make it essential for organisations to reassess their licensing and subscription models. Fordway offers the expertise and strategic guidance needed to navigate these changes effectively. By working with us, businesses can secure cost savings, optimise their Microsoft 365 environment, and enhance productivity with minimal disruption.
Get in touch with Fordway today to discuss your Microsoft 365 strategy and ensure a smooth transition ahead of the 2025 pricing changes.
