Microsoft’s Licensing Costs Are Increasing: Here’s What You Need to Know and Do

Let’s get straight to the point- Changes are coming to Microsoft’s licensing costs, and they could impact your IT budget if you don’t act now. It’s important to know that even small changes/adjustments can hamper your organisation’s finances. Starting April 1, 2025, businesses using monthly billing for Microsoft’s NCE Annual Commitments will face a 5% price increase. This change means that businesses relying on monthly billing will pay more than those using annual billing plans.

While 5% might not sound like much, it can add up quickly – especially if you are managing multiple licenses. It is a hard wake-up call for organisations relying on Microsoft’s monthly billing. Not taking any action at the moment could lead to disturbed IT budgets and wasted opportunities.

The good news? You can take steps now to avoid these extra costs and even optimise your licensing setup for better savings with Exigo Tech. In this blog, we will discuss the actual implications of this adjustment, why it matters, and how proactive planning today can save you thousands tomorrow.

What Exactly is Changing in Microsoft Licensing?

Microsoft is encouraging businesses to shift to annual billing by increasing the cost of monthly billing plans. The 5% increase will:

• Apply to All Channels: Whether you buy online, through CSP, or MCA-E subscriptions, the price hike applies.
• Start After April 1, 2025: Existing monthly billing subscriptions will see an increase at renewal.
• Create a Gap Between Monthly and Annual Costs: Over time, the difference between the two will become noticeable.

What This Change Really Means

This price adjustment is a part of Microsoft’s fine-tuning pricing structures to reflect market conditions and encourage long-term commitments. Here is what makes this change significant:

1. The Hidden Impact of “Small” Increases:

A 5% price hike may sound negligible, but small numbers add up fast. Imagine a scenario where your business manages hundreds of licenses. Suddenly, what seems like a minor adjustment turns into a nightmare on your annual IT budget.

2. Encouraging Long-Term Planning:

By increasing the cost of monthly billing, Microsoft is clearly taking organisations toward annual commitments. While this can lead to savings for companies able to pay upfront, it also demands more planning and cash flow management on your part.

3. Ripple Effects on Other IT Investments:

When licensing costs increase, they can divert funds from other critical initiatives, such as upgrading hardware, improving cybersecurity, or expanding your IT team.

In short, this change is about much more than the 5% – it’s about how prepared your business is to adopt this unexpected change.

Why This Price Increase Matters to Your Business

Even small price increases can have a huge impact on your overall organisation budget. It’s a reminder that even predictable costs like software licenses need to be reviewed regularly to ensure they align with your current and future needs.

Here are some ways this change could affect you:

1. Higher Costs Over Time

For example, a license currently costing $50/month will increase to $52.50/month. Over a year, that’s an extra $30 per license. If you are managing 50 licenses, you will spend an additional $1,500 annually without getting any extra value.

2. Budget Pressures

If your IT budget is already tight, this increase can hamper funds you have reserved for other priorities, like security upgrades or new tools.

3. Missed Opportunities

Many businesses are paying for licenses they no longer use or can modify. Without a review, these wasted costs can increase over time.

Ready to Save? Act Now

Don’t let this price hike impact your budget. Let Exigo Tech help you handle this price increase effectively.

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What Can You Do?

The key to avoiding higher costs is taking steps now and acting before April 1, 2025. By partnering with Exigo Tech, you can lock in current rates and streamline your subscriptions. Here is how:

1. Review Your Licenses

Do you know exactly how many licenses you are using—and whether they are all necessary? A review by Exigo Tech can help you:

• Identify unused or inactive licenses.
• Find licenses that are no longer relevant.
• Make sure your licenses match your team’s actual needs.

2. Switch to Annual Billing

By transitioning to annual billing with Exigo Tech, you can:

• Lock in today’s pricing before the 5% increase takes effect.
• Save more costs compared to paying monthly over time.

While annual billing may feel like a larger upfront cost, it’s much cheaper in the long run.

3. Optimise Your Setup

Moving to a unified solution like Microsoft 365 can often reduce costs while improving efficiency. Many businesses are unaware of this and that is where Exigo Tech acts as your trusted partner.

How Exigo Tech Can Help in Dealing with This Microsoft Price Increase

The April 2025 price hike isn’t just about Microsoft’s licenses; it’s about how businesses adapt to change. We enable organisations to proactively plan future plans to avoid unnecessary costs. At Exigo Tech, we are more than just a technology partner – we are your guide to handling complex licensing changes and minimising their impact.

Our team specialises in helping businesses like yours to minimise costs and disruption. We provide:

• License Reviews: A comprehensive audit to identify unused licenses and align subscriptions with your business needs.
• Billing Optimisation: Support in transitioning to annual billing or exploring cost-effective alternatives.
• Cost-saving Insights: A free IT health check to uncover hidden opportunities for savings.

Handle This Microsoft Price Change Effectively with Exigo Tech

While the April 2025 deadline might seem far away, the earlier you act, the more savings you can secure. Waiting until renewal could mean missed opportunities to lock in current rates and optimise your licenses. Let Exigo Tech guide you through this transition.