Tech View: Dealing with price increase of cloud applications

A few months ago Mi­crosoft announced a price increase to its flagship cloud applications suite, Microsoft 365. The reckoning has come, and the increase, of about 20%, kicks in for most folks this month.

Formerly known as Office 365, Microsoft 365 comes in a variety of options, ranging from a simple email account to enterprise offerings that include voice, analytics and security applications. 365’s sweet spot includes the basic productivity applications that we’ve come to love (or hate), such as Word, Excel, PowerPoint and Outlook.

Typically billed monthly, an annual billing option is also available.

Regarding the increase, many are wondering what took so long. After all, when Office 365 was first introduced, the cost was so low it had many folks either scratching their head or assuming the “drug-dealer sales method”: get them hooked when it’s cheap and raise the price after addiction.

But even though the offerings have been modified in the 10-plus years since its release, the price has remained the same.

Take, for example, what anecdotally is the most common option, Business Standard. For $12.50 a month you get the aforementioned productivity applications, which, if bought on a one-time basis, will cost about $400. Obviously, it makes no sense to buy the stand-alone product, especially because with the subscription you always have the most recent version.

So what we’ve thought all this time is that eventually Microsoft will raise the price such that a one-year subscription will cost about the same as the one-time license. But that hasn’t happened. Even now, with the 20% increase to $15 per month, the one-time license still is not cost-effective.

Of course, the flip side is, with net income north of $61 billion, does Microsoft really need the money? Well, shareholders need to be kept happy.

But, of course, 20% is 20%, so what can one do to keep costs down? Microsoft actually is offering the old pricing if you pay for an annual subscription upfront. That saves you 20% but, for larger organizations, could wreck your cash flow.

What about switching over to Google Workspace? For folks who have been running the Microsoft suite for years, Workspace is a nonstarter. With no desktop applications, most seasoned Microsoft applications users find the feature set of Docs, Sheets and Slides a bit lacking. (The same can be said of Microsoft’s cloud-based versions of Word, Excel, PowerPoint and Outlook.) And for those who have switched over, the cost has remained about the same, not to mention the cost to migrate from one platform to another.

This would be a good time, however, for businesses and government agencies to clean up their licenses. While you may not be wasting 20% of your licenses, it’s not unusual to see organizations with 10% more licenses than they use or need.

Other ways to save costs include making sure everyone has an appropriate license. Consider taking advantage of shared mailboxes, groups or aliases, none of which require licenses. Even those in the Googlesphere can take advantage of such tactics.

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John Agsalud is an IT expert with more than 25 years of information technology experience in Hawaii and around the world. He can be reached at jagsalud@live.com.