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Microsoft confirms Office 365 price rise

Punters with no Software Assurance to cough 15% more from August

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Life is about to get more expensive for some folk living in Microsoft's Office 365 world with a 15 per cent price hike in the offing from August.

This is the first time Redmond has decided to ignore the unwritten laws of the cloudy industry by upping its price list for punters - those with an Enterprise Agreement that haven't forked out for Software Assurance to be specific.

"New Office 365 EA customers who don’t have a previous investment in our products will see an increase to align our pricing to our other channels," said a Microsoft spokesman, 48 hours after our first request.

This is designed to bring uniformity to pricing in EA, Open and via Microsoft's direct sales website.

It may give firms greater incentive to adopt SA - a three-year plan that allows users to upgrade to new on-prem wares upon release - and of course will help to swell the coffers of Microsoft's cloudy suite.

The spokesman added Microsoft is "always evaluating" pricing as it adds "more features and benefits to Office 365". These include the launch of, er, Office for iPad and the increase in OneDrive storage from 25GB to 1TB, he said.

"The vast majority of our customers will not see an increase in the cost of Office 365. All existing Office 365 EA customers are guaranteed prices will not change for the duration of their agreement," Microsoft added.

Microsoft knows that price is a sensitive subject, specifically when it is competing with Google. It told partners at WPC '13 to steer customers away from price led conversation because of a high propensity to lose business.

Tim Wallis, CEO at Microsoft channel partner Content & Code, which has sold 90k customer seats on Office 365, told us Microsoft had added Yammer and OneDrive to the suite, "I believe its still good value for clients".

He told us that price comes up in discussions with customers when selling Office 365 but added, "the business case always stacks up".

A number of large Microsoft partners have already added Google Apps to their portfolio, including CDW, and SHI International.

But the world's largest enterprise partner for Microsoft, Insight, decided demand among businesses was simply not there yet for Google's productivity suite.

CEO Ken Lamneck previously told El Chan that many biz customers' applications are tied to Microsoft and rewriting those was not a straightforward or cheap task.

One Microsoft partner that asked to remain anonymous was rather more cynical about the pending price rise claiming the US vendor "bought market share" and was now doing the obvious thing. ®

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