Feeds

Microsoft slashes Office 365 prices

Big cuts for new, renewing customers. Why? 'Efficiencies'

Remote control for virtualized desktops

Microsoft has taken an axe to Office 365 prices, cutting enterprise charges and giving special discounts to educational users, claiming "economies of scale" in the service.

"With these efficiencies, we're able pass on savings to make it even more affordable for customers of all sizes to move to Office 365," claimed Kirk Koenigsbauer, VP of Microsoft's Office division in a blog post. "So, I'm thrilled to announce that we're lowering the prices of most of our Office 365 for enterprise plans by up to 20 per cent. These changes are effective today at Office365.com for new and renewing direct customers. "

The economies of scale that Koenigsbauer is claiming must be very big, indeed. According to a table posted by Microsoft partner Collabra Networks (which has since been taken down), some prices have dropped by nearly 25 per cent, and storage costs are down 92 per cent.

Collabra Networks price chart for Office 365

Collabra Networks price chart for Office 365 shows major price cuts

When El Reg asked about these cuts, a Microsoft spokesman told us that the economies of scale were on the datacenter side, and that "The talents of our privacy experts, security gurus, and administrators are more highly leveraged across the service." This may well be so, but we'd bet the price cuts are also an attempt to ramp up demand, as well.

Firm data on the numbers of Office 365 users is thin, but the company claims some major corporate customers, including Campbell Soup Company, Groupe Marie Claire, and Tata Steel Europe. At the same time, it has incentivized its reseller base (after initially pissing them off) with three months cash upfront payments for new accounts. During Microsoft's last earnings conference call, very little was said to indicate stellar growth – but Redmond may just be modest.

But the company is under strong pressure from Google – which, to be fair, also isn't forthcoming about Apps-user numbers – and tales have emerged of Microsoft offering massive discounts and audiences with Steve Ballmer himself to keep big clients.

Redmond has also upgraded Office 365 to work on OS X, and brokered a cross-platform deal with BlackBerryBusiness Cloud Services, which will further help its numbers.

Office 365 is undoubtedly growing, as are most cloud services that aren't irredeemably awful. But given the severity of the price cuts, the economies of scale argument rings a bit hollow. It's one of those justifications, like "our customers asked us for it," that are used all too often to mask other motives.

If you are considering buying into Office 365, now could be the time to bargain hard for even bigger discounts. The price cut also applies in the UK with immediate effect. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
PEAK APPLE: iOS 8 is least popular Cupertino mobile OS in all of HUMAN HISTORY
'Nerd release' finally staggers past 50 per cent adoption
Microsoft to bake Skype into IE, without plugins
Redmond thinks the Object Real-Time Communications API for WebRTC is ready to roll
Microsoft promises Windows 10 will mean two-factor auth for all
Sneak peek at security features Redmond's baking into new OS
Mozilla: Spidermonkey ATE Apple's JavaScriptCore, THRASHED Google V8
Moz man claims the win on rivals' own benchmarks
FTDI yanks chip-bricking driver from Windows Update, vows to fight on
Next driver to battle fake chips with 'non-invasive' methods
DEATH by PowerPoint: Microsoft warns of 0-day attack hidden in slides
Might put out patch in update, might chuck it out sooner
Ubuntu 14.10 tries pulling a Steve Ballmer on cloudy offerings
Oi, Windows, centOS and openSUSE – behave, we're all friends here
Was ist das? Eine neue Suse Linux Enterprise? Ausgezeichnet!
Version 12 first major-number Suse release since 2009
prev story

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
New hybrid storage solutions
Tackling data challenges through emerging hybrid storage solutions that enable optimum database performance whilst managing costs and increasingly large data stores.
Getting ahead of the compliance curve
Learn about new services that make it easy to discover and manage certificates across the enterprise and how to get ahead of the compliance curve.