Microsoft chops Office 365 enterprise prices by 20 percent

Microsoft is trimming prices of the enterprise and academic SKUs of Office 365 effective immediately.
Written by Mary Jo Foley, Senior Contributing Editor

Microsoft is cutting the prices of a number of its Office 365 enterprise and academic bundles, company officials announced on March 14.

The company is lowering, effective immediately, "most" of its Office 365 for enterprise plans by 20 percent, according to an Office 365 blog post. The changes are available for both new and renewing direct customers.

Here's a chart, courtesy of one of Microsoft's partners, that spells out the new pricing in a nice, understandable format. It looks like some prices were cut more than 20 percent; others were slightly less than 20 percent, based on this information:

Microsoft officials are attributing the cuts to economies of scale and skills among its datacenters, developers and support personnel.

On the academic front, Microsoft also is cutting the price of its "A2" service plan for faculty and staff. A2 -- which bundles the core Exchange SharePoint, Lync and Office Web Apps -- already is free for students. Microsoft plans to launch the "full" Office 365 for education service starting this summer, officials reiterated today.

Microsoft rolled out Office 365 in late June 2011. At that time, Microsoft announced a number of different plans at different price points. The core Office 365 offering includes Microsoft-hosted Exchange, SharePoint and Lync, supplemented by Webified versions of Word, Excel, PowerPoint and OneNote (known together as Office Web Apps). Office 365 E3 and E4 plan customers get local copies of Office 2010 Professional Plus included as part of their subscription fees. Other users have the option of adding subscriptions for Office 2010 Professional Plus to their plans.

After today's cuts, the new prices on Office 365's enterprise plans are:

  • E1: $8 per user per month
  • E2: $14 per user per month
  • E3: $20 per user per month
  • E4: $22 per user per month

P1, the small business plan, is still $6 per user per month. Kiosk worker plans (K plans) also were cut by 20 percent.

Microsoft officials have said the vast majority -- 90 percent or so -- of early Office 365 sales were to small businesses, which weren't really well served by Office 365's predecessor, Business Productivity Online Suite (BPOS). Officials have denied that Office 365 failing to gain traction with enterprise users, who are the focus of today's price cuts.

As of September 2011, Microsoft is believed to have 5 million seats signed up for Office 365. Company officials haven't released any updated sales figures for the product since then.

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