Microsoft has raised prices on its commercial Microsoft 365 plans several times since 2022, and the trend is not reversing. For small businesses managing tight budgets, licence costs that quietly increase at renewal are a real problem — especially when the New Commerce Experience (NCE) model changed the rules on how and when you can adjust your subscriptions.
This post covers what changed, what it costs you if you are not paying attention, and the specific steps you can take to reduce your Microsoft 365 spend without downgrading the tools your team depends on.
What Actually Changed With Microsoft 365 Pricing
Microsoft moved all commercial customers to the New Commerce Experience in 2022. Under NCE, you choose between two commitment types:
- Annual commitment, paid monthly: Fixed price for 12 months, billed each month. You cannot reduce seat count mid-term without penalty.
- Annual commitment, paid annually: Slightly lower per-seat cost in exchange for upfront payment for the full year.
- Monthly commitment (no annual): Full flexibility to add or remove seats each month, but at a 20% premium over the annual price.
The 20% premium on monthly subscriptions was the most significant structural change. Before NCE, monthly billing and annual billing were the same price per seat. Now, flexibility costs money — and many businesses that stayed on monthly subscriptions are paying significantly more than they need to.
EUR Pricing and Currency Adjustments
Microsoft also implemented global pricing alignment in 2023 and 2024, adjusting EUR, GBP, and other currency prices to reflect USD movements. For DACH customers purchasing through partners or directly, this resulted in price increases of 9–15% on most SKUs independent of any product changes. These adjustments apply at renewal, not mid-contract.
The practical result: a 20-user tenant on Microsoft 365 Business Premium that was paying €420 per month in early 2023 may now be paying €490–520 per month at renewal for identical licences. That is €840–1,200 extra per year with no change in what you receive.
Where the Real Savings Are Hidden
Price increases are painful, but the bigger issue for most companies is licence waste. In typical Microsoft 365 environments, 20–30% of licences are being used by staff who left, staff who changed roles, or staff whose actual needs do not match the licence tier they are assigned.
Step 1: Run a Licence Usage Audit
In Microsoft 365 Admin Center, go to Reports → Usage. The Active Users report shows you, by product, which accounts have had no activity in the past 30 or 90 days. An account with no Teams activity, no SharePoint access, and no email reads for 90 days is either a leaver, an automation account, or someone who needs a different licence type.
Step 2: Match Licences to Actual Needs
Not every employee needs the same licence tier. A useful framework:
| Role Type |
Recommended Licence |
Monthly Cost (approx.) |
| Frontline / warehouse / field staff |
Microsoft 365 F3 |
~€8 |
| Admin / light office work |
Microsoft 365 Business Basic |
~€6 |
| Standard office / knowledge workers |
Microsoft 365 Business Standard |
~€12.50 |
| Finance, HR, management |
Microsoft 365 Business Premium |
~€20.60 |
| Shared / room accounts |
Microsoft 365 Shared Mailbox (free up to 50GB) |
€0 |
Prices are approximate and vary by region and partner agreement. Annual commitment pricing applied.
Step 3: Convert Monthly to Annual Where Appropriate
For any employee on a permanent contract, converting their licence from monthly to annual commitment saves 20% immediately. The only licences that make sense to keep on monthly are for contractors, seasonal staff, or roles with high turnover. Calculate how many of your monthly licences are for genuinely variable headcount — for most businesses, it is a small fraction.
Step 4: Consolidate Third-Party Tools You Are Already Paying For Elsewhere
Microsoft 365 Business Premium includes capabilities that many businesses pay for separately without realising they are redundant. Common overlaps:
- Endpoint security via a third-party vendor — replaced by Microsoft Defender for Business (included in Business Premium)
- Password manager subscription — Microsoft Authenticator includes password management
- Video conferencing tool — Teams includes all video meeting functionality
- Intranet or internal wiki — SharePoint covers this without extra cost
Renewal Strategy: Timing Matters
Under NCE, your annual renewal date is fixed. Licence changes — additions, removals, or tier changes — take effect at the next renewal unless you are adding seats mid-term (which you can do). This means planning licence changes 30–60 days before renewal is critical.
If you are a DACH customer purchasing through a Microsoft Cloud Solution Provider partner, your partner has visibility into your renewal date and can initiate a licence audit and optimisation review before the renewal locks in. This is worth requesting explicitly — it is not always offered proactively.
For larger environments (50+ users), Microsoft offers the Azure Cost Management + Billing portal which, combined with the M365 admin centre usage reports, gives a consolidated view of licence spend versus actual usage across the entire tenant.
How IDE Solutions Can Help
We run Microsoft 365 licence optimisation reviews for businesses across Germany, Austria, and Switzerland. A typical review takes two to three days, produces a clear report of current spend versus optimised spend, and includes a migration plan to implement changes at the next renewal without any disruption to users.
For a 30-person company, the average saving from a licence audit and right-sizing project is €150–300 per month. The review pays for itself at first renewal in most cases.
Reference: Microsoft Cloud Pricing Information