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Price cuts, new features coming for Office 365 small biz customers

New plans for companies with up to 300 staff to launch in fall

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Microsoft is still keen to shift its perpetual-license Office customers over to the Office 365 subscription model, and to that end it's planning a shakeup of its Office 365 plans for small and midsized businesses to offer customers more value and greater flexibility.

Beginning on October 1, Redmond will launch three new Office subscription plans that will eventually replace the current Office 365 Small Business, Small Business Premium, and Midsized Business offerings.

The first new plan will simply be called Office 365 Business and will consist of subscription versions of the Word, Excel, PowerPoint, Outlook, OneNote, and Publisher desktop applications, plus 1TB of OneDrive cloud storage.

Like most other Office 365 packages, Office 365 Business subscriptions are tied to individual users, where each user is allowed to install the Office suite on up to five PCs or Macs. Users can also access Office documents and apps using Android and iOS devices.

In some ways, Office 365 Business will be similar to the current (and confusingly named) Office 365 ProPlus, except the latter throws in Access and Lync, too. But while Office 365 ProPlus costs $12 per month, Office 365 Business will go for just $8.25 per month ($99 per year).

Next comes Office 365 Business Essentials, a $5-per-month online-only offering that doesn't include the Office desktop apps. This new plan will be similar to the current Office 365 Small Business plan, in that it will give access to Office Online, a 50GB cloud-hosted Exchange mailbox, team collaboration via SharePoint, and the web-based Office Online apps.

Unlike the current offering, however, Business Essentials will also throw in private social networking via Yammer and support for on-premises Active Directory synchronization for single sign-on.

Finally, if both of the new plans appeal to you, there will be a third offering called Office 365 Business Premium that will bestow all of the above at a slight discount: $12.50 per month (as opposed to $13.25 if you subscribed to both plans separately).

The new pricing structure offers a number of advantages. For one thing, very small businesses that don't really need Office 365's online collaboration features will have the option of getting just the desktop Office software, saving them $4.25 per user, per month versus the cost of the current Office 365 Small Business Premium plan.

Small businesses that only want Redmond's cloudy collaboration tools will pay the same as they do for their current Office 365 Small Business subscriptions, but they will get the added benefit of Yammer and Active Directory integration.

Larger companies will get a price cut. The current Office 365 Midsized Business plan costs $15 per month, while Office 365 Business will offer all of the same features for $12.50 per month.

Finally, the new plans also bring another, subtler change. Today's Office 365 plans for small businesses are capped at 25 seats, after which customers must switch to the pricier Midsized Business plan. All three new plans are capped at 300 seats – the same limit as the current Midsized Business plan – allowing customers to grow their staffs organically without hitting any sudden price increases.

As mentioned, the new subscription plans kick off on October 1 and they will eventually replace the old business plans, but current Office 365 customers won't be forced to switch right away. Because Microsoft's policy is to give customers 12 months' notice of any changes to their core subscriptions, Office 365 subscribers will be given until their first renewal after October 1 to select one of the three new plans. ®

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