NFPs Should Prepare Now for Microsoft Price Increases

NFPs Should Prepare Now for Microsoft Price Increases

Inflation is on the rise globally, with Australia reporting a rate of 5.1% for Q1 of 2022, the highest reading in more than 20 years. Not all goods and services are increasing at the same rate, but unfortunately software and cloud services are expected to increase later this year beyond the average inflation rate.

Microsoft have recently announced significant increases to their Office 365 Not For Profit pricing, coming September 1, 2022. At the same time Microsoft have removed on-premise products from their Microsoft Donation Program. This will result in on-premise software costing 3-5 times the current pricing.

The exact Office 365 price increases for Australian NFPs are not yet known, as the USD-AUD exchange rate will be a factor, but the smallest increase appears to be around 9% (Office 365 E5) and the largest increase is closer to 28% (Office 365 E3). With many NFPs using the E3 license, this will be a significant impact on next year’s IT budget for many organizations.

To better manage these price increases we recommend that NFPs look at two strategies:

First, review your existing Microsoft licensing requirements. We see that it is quite common for NFPs to have unused O365 licenses. Sometimes this can be a legacy from having unlimited access to free E1 licenses, meaning that NFPs have just not worried about active usage. But more usually this occurs due to poor user offboarding processes, which has its own security implications. Even if you don’t have unused licenses you may have users with wrong or unnecessary license types assigned that could be costing you more than needed.

Second, we recommend locking in 12-months of the the current pricing before the upcoming Sept 1 increase. Unless you think that Microsoft pricing is likely to go down, then there is some wisdom in taking action to control this cost now. Whilst it would be unusual for Microsoft to rapidly increase pricing again after the planned Sept 1 increase, these are unusual times and inflation is only predicted to rise for the next few years.

If you would like some assistance with auditing your current Office 365 licensing needs, or just locking in the best pricing, please get in touch: