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Microsoft Pricing Changes: Monthly Billing for Microsoft 365, Price Hikes for Power BI
Microsoft on Tuesday announced some upcoming pricing changes for enterprise customers of its cloud-based subscription services.
Specifically, the company is introducing a monthly billing option for customers that have signed annual contracts for services like Microsoft 365, Windows 365, Power Platform and others. The changes are designed to help customers maintain "cash flow flexibility," per Microsoft.
Microsoft is also preparing to implement the first price increases for two standalone products: Power BI and Microsoft Teams Phone.
Microsoft 365 Copilot Monthly Billing
Starting next month, Microsoft will give customers who have purchased a one-year term of Microsoft 365 Copilot the option to pay for the service every month, instead of in one upfront sum.
The option will become available on Dec. 1 for annual subscribers of Microsoft 365 Copilot, Microsoft 365 Copilot for Sales and Microsoft 365 Copilot for Service. Normally, Microsoft 365 Copilot costs $360 per user per year ($30 per month), while the Sales and Service SKUs each cost $600 per user per year ($50 per month).
The monthly billing option will increase these prices by 5 percent. That means Microsoft 365 Copilot will cost $378 per user per year ($31.50 per month) and Sales and Service each $630 per user per year ($52.50 per month).
Microsoft's FAQ describes a few caveats. The monthly billing offer is not yet available to nonprofit organizations, but it is for education and government customers. Also, Microsoft emphasized that choosing the monthly billing option for an annual subscription doesn't mean that an organization can cancel its subscription at any given month; it still must commit to the entire annual term or risk running afoul of Microsoft's cancelation policy.
Standardization Across Annual Subscriptions
Starting April 1, 2025, the following Microsoft products will also get the monthly billing option (with a 5 percent price increase) for annual subscriptions:
- Microsoft 365
- Office 365
- Enterprise Mobility + Security
- Windows 365
- Microsoft Dynamics 365 Services
- Microsoft Power Platform
At least some products that fall under Microsoft's "other online services" category will also have the option, though Microsoft didn't specify which ones.
On-premises products are not affected by these changes, nor are Azure Reserved Instances, Azure Savings Plans, Marketplace, GitHub or AirGap.
Microsoft is extending the same monthly billing option to all of its subscription products in the spirit of standardization. "By aligning our pricing strategy across channels and segments, we ensure consistency and transparency across all platforms," it said in the FAQ.
Price Changes for Power BI and Microsoft Teams Phone
Power BI and Microsoft Teams Phone are also getting their first price hikes since their respective launches.
Starting April 1, 2025, the cost of an annual billing subscription to Power BI Pro will increase from $10 per user per month to $14 per user per month, while Power BI Premium Per User (PPU) will increase from $20 per user per month to $24 per user per month.
According to Microsoft on Tuesday, it has rolled out over 1,500 enhancements to Power BI in the past six years. The price hike is commensurate to these improvements, it said. "Since its introduction in GA [in 2015], the price of Power BI Pro and PPU has stayed unchanged," the FAQ read. "The increase in price is reflective of all the investment in the innovation we have delivered over the years."
Pricing for the following Power BI editions are unchanged: Power BI Capacities (F SKU), Power BI Report Server, Power BI Embedded and Power BI Free. Moreover, Microsoft's Government Cloud, education and nonprofit customers will be unaffected.
As for Microsoft Teams Phone, prices for annual billing subscriptions will also increase on April 1, 2025. Specifically, Teams Phone Standard will go from $8 per user per month to $10 per user per month, while Teams Phone Standard for Frontline Workers will go from $4 per user per month to $5 per user per month. Other region-specific price increases are described in this table:
[Click on image for larger view.]
Microsoft Teams Phone price changes effective April 1, 2025. (Source: Microsoft)
Once again, government, education and nonprofit customers are exempt.
"This price update marks the first price increase since Teams Phone launched in 2017," Microsoft said. "It is reflective of the increased value we have delivered to our customers to enable flexible, smart, and reliable calling natively in Teams."