In January 2022, we told you about the upcoming price increases for certain Microsoft 365 SKUs. In early February, we told you about the Microsoft New Commerce Experience and how this would impact the way customers purchase and manage Microsoft 365 licenses.
If your organization uses Microsoft 365, depending on your existing plan and renewal date, you will eventually need to make a decision on how your organization will pay for Microsoft 365 licenses.
Essentially, you’ll have 3 options to choose from:
- Month to Month
- Annual
- Three-Year
Here are the advantages and disadvantages you’ll want to consider before you enter the New Commerce Experience.
Month to Month
Advantages
The major benefit to month-to-month is the flexibility. If your organization has seasonal workers or contractors, paying a 20% premium for a month-to-month subscription makes sense.
Disadvantages:
The obvious disadvantage is the 20% increase you’ll incur if you choose this option. Because the single recurring anniversary date is the 1st of each month, you only have 72 hours to receive a prorated refund. Once the 72 hours lapses, you’ll be billed for the full month.
Annual
Advantages
Annual is the way to go for full-time employees simply for the 20% cost savings and the ability to lock in your price for 1-year. Also, having a single anniversary date per subscription makes it easier to budget and track your licenses.
Disadvantages
Once you’re locked into an annual agreement, you pay for all of the seats purchased for the full year. (Note that increased seats are permitted mid-term and will be prorated for the remainder of the term.)
3-Year
Advantages
The primary advantage of the 3-year term is the 20% cost savings and the ability to lock in your price for 3 years. We recommend this to organizations who have low employee churn rates.
Disadvantages
Like the annual plan, once you’ve committed, you’re locked in for 3 years and cannot decrease your number of seats until the remainder of that term.
