Microsoft tests 45% M365 price hikes in Asia-Pacific to see how much you enjoy AI
Won’t say if other nations will be hit, but will ‘listen, learn, and improve’ as buyers react – so far with anger
Microsoft has advised users of its M365 suite in six Asia-Pacific nations they face big price rises when they renew subscriptions.
We're told these hikes are needed to “ensure Microsoft customers are among the first to access powerful AI features in our apps."
News of the price rises arrived in emails sent to subscribers last week. Your correspondent received one for an annual Microsoft 365 Family subscription that, when I next renew, will rise from AU$139.00 to AU$179 ($85.50 to $110) – just under 29 percent.
The Register has also seen screenshots of emails sent to holders of M365 Personal subscriptions that will rise from AU$109.00 to AU$159 ($67 to $98) or almost 46 percent. Microsoft's Australian web site lists $159 and $179 as the current price points for Personal and Family subscriptions.
The price rises have been flagged in Australia, New Zealand, Malaysia, Singapore, Taiwan, and Thailand.
Regarding these increases, a Microsoft spokesperson told us:
These price changes reflect the extensive subscription benefits that Microsoft has added over the past 12 years including advanced security with Microsoft Defender, creative tools like Clipchamp, and countless enhancements to Word, Excel, PowerPoint, OneNote, and Outlook, in addition to new features such as Microsoft Copilot and Microsoft Designer.
We’re also told the price hikes aren’t mandatory as subscribers can choose to sign up for a lesser version of M365 that does not include Copilot.
- New Outlook marches onto Windows 10 for what little time it has left
- Microsoft preps for a year of enterprise-impacting M365 retirements
- Microsoft investigating 365 Office activation gremlin
- Microsoft preps big guns to shift Copilot software and PCs
Microsoft did not answer our question about whether these price rises will be introduced elsewhere. It’s also unclear if the price rises will come to corporate licenses.
The spokesperson did say the purpose of the changes is to allow Microsoft a chance to “listen, learn, and improve.”
Making changes to prices or products in select countries is a common tactic vendors use to test customer reaction. The six nations chosen for this test are a good fit for such tests, as they enjoy different levels of prosperity and tech adoption.
Reaction to the changes has not been positive. The Register has encountered plenty of online commentary accusing Microsoft of price gouging. Australian subscribers seem particularly piqued, as the high cost of living is a major issue down under.
We also found plenty of comment to the effect that it is hard to find the offer to choose a subscription that avoids the price rise, as it only appears when cancelling a subscription.
The Register tried to do so and was offered dialog boxes reading, “I don’t want my subscription,” and “I want to keep my benefits”, and stopped the process at that point out of fear deleting family data could result from either.
We also searched for “M365 Classic” after a Microsoft spokesperson told us “A Classic SKU” is the alternative to the higher prices, and could find no details of such a package using both Microsoft’s Bing search engine and Google. However in March 2024 Microsoft did commit to offer a pair of Office editions under perpetual licenses, albeit without accompanying cloud services.
Microsoft recently promised to spend $80 billion on datacenters in 2025 alone, most of them to run AI applications. Someone’s got to pay for that level of investment and these price rises in Asia suggest Microsoft customers will foot the bill.
Or maybe not, given the reaction we’ve observed to these increases – plenty of which points out that many AI features in M365 are offered for free by other providers. ®