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Microsoft hikes prices for non-profit customers, ends on-prem software grants

Office 365 and Windows 365 prices to rise in September – one SKU by much more than recent commercial increase

Microsoft has hiked the price of Office 365 and Windows 365 versions it offers to non-profit customers, effective September 1, 2022.

News of the price increase appeared in a March 29 update to a Partner Center page on which Microsoft posts rolling announcements of offers and pricing changes.

The price rises are as follows:

  • Microsoft Office 365 E1: from $2.00 to $2.50
  • Microsoft Office 365 E3: from $4.50 to $5.75
  • Microsoft Office 365 E5: from $14.00 to $15.20
  • Microsoft 365 E3: from $8.00 to $9.00
  • Microsoft 365 Business Premium: from $5.00 to $5.50

The Register compared the percentage increase of the price rises compared to those imposed on commercial customers in Microsoft's March 2022 price rises.

One increase stands out: the price of Office 365 E3 has risen by 27.78 per cent for non-profit customers, compared to a 15 per cent price hike for commercial customers. Prices for the other four products will rise by the same percentage Microsoft has imposed on its commercial customers.

The prices are still very low, with four sold for 75 per cent less than the price offered to commercial customers. The non-profit discount for Office 365 E5 is 60 per cent.

In an FAQ [PDF] explaining the changes, Microsoft points out that over the last decade Office 365 has "added 24 new apps and more than 1,400 features." Among the new apps is Teams, which Microsoft points out has proven handy in recent years.

The FAQ poses the question: "Why are we updating the price for Microsoft 365 at this time?" and answers it as follows:

This is the right time to update our pricing. Although there are still questions and uncertainty, we see clear signs of economic recovery around the world. Moreover, over the past few years our competitors have increased prices, in some cases aggressively. We simply have a better story and proven track record of reinvestment in the product and consistently delivering new value to our customers.

The FAQ also addresses the fact that as of April 4 Microsoft stopped making grants of its on-prem software, under a new "cloud-first grant" program.

"Ahead of the April 4th updates to our on-prem grant program we sought to provide non-profit customers with enough time to transition to the cloud and lock in existing Microsoft 365 non-profit prices," the FAQ states, adding: "With this in mind, we delayed this price increase by six months from the commercial price changes to give non-profits enough time to make the transition." ®

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