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Effective October 1, Microsoft will increase the prices of the upcoming Office 2019 suite for corporate customers by 10%, after eight years of unchanged prices since the introduction of Office 2010.
In an article from July 25 on Microsoft According to Partner Network's blog, rising future prices are part of a series of price increases for a myriad of its products on-premise and in the cloud
"Office 2019 Commercial Prices will increase by 10% over current on-site prices. "The article says, while price changes and adjustments will also occur in a variety of existing plans and volume subscriptions
. plans to remove programmatic volume discounts (Level A and Level C open), while also modifying the Select / Select Plus and Open program offerings. Changes will also be made to on-site and on-line services for government clients.
"These changes will highlight the benefits of our rates for an avant-garde world, help us move from a customer-centric pricing structure to one and create more consistency and consistency." transparency through our channels of purchase, "says the blog.
The price increase will also include the Office Client, Enterprise Client Access Licenses (CALs), Core CAL Licenses and Server Products.
So, what will the changes mean for business customers?
Wes Miller, Research Analyst at Directions on Microsoft, stated eWEEK that Microsoft has not yet discussed in detail about its change of Office 2019 It considers pricing policies as part of a strategy to realign businesses on their product offerings as they evolve.
The price increases relate only to the Microsoft Office 2019 full version commercial licenses that companies can use for as long as they wish. at. Increases do not affect Office 365, which is purchased on a yearly subscription basis of one year.
The removal of Level A and C volume discounts will affect prices primarily for smaller customers, but larger companies retain their existing volume reductions, according to the mail.
One potential strategy is that Microsoft wants to move more customers to an annual subscription with Office 365, Miller said. "They are definitely trying to get customers to look at Office 365 first" before buying full versions of Office 2019. What would it do, does it have? said, would place important commercial customers on annual subscriptions that would provide a steady stream of revenue to Microsoft.
Microsoft has always had business customers who buy full versions of the Office suite and continue to use them for a decade or more, which negatively affects the company's annual revenue model, said Miller.
Price changes mean that customers will have to pay more to continue using the full on-site versions of the Office or they will have to upgrade to Office 365, whether they are ready or not, he said. added.
Dan Olds, director of Gabriel Consulting Group, said that although customers are not happy with the price increases, they have also benefited from eight years of unchanged pricing.
"What this really shows is Microsoft's confidence in the power of the market," Olds said. "At the time [the open source] OpenOffice and Google Docs were a higher threat in the marketplace, you certainly have not seen Microsoft raise prices on anything."
But having recently announced a $ 110 billion business figure in 2018 what we are seeing now is a very confident Microsoft, "said Olds.
" I do not think it's a price increase enough to cause defections, because where will users go? Olds says, "Google Docs and other alternatives are not close enough to Microsoft Office and their badociated operating systems for businesses," he added. "Some things, including this close integration between Windows and Office, simply can not be replicated "by competitors.
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