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3 strategies for small businesses to mitigate the effect of Office 365’s price jump

Posted by Shivali Anand

September 22, 2021    |     3-minute read (542 words)

Small company owners are preparing for the worst. Microsoft has increased the cost of Office 365. It's possible that businesses with tighter budgets will need to plan ahead for this one.

The stated price increase for Microsoft Office 365 subscriptions will take effect March 1, 2022. This is the first price hike for the popular software suite to affect small businesses. Previous Office 365 price hikes affected only enterprise customers and those with a perpetual license.

Microsoft's decision is unexpected, given that the move will have a clear and disproportionately negative impact on small firms. However, Microsoft claims that the rise represents the hundreds of new features that have been developed in recent years.

What is the extent of the hike?

Not terrible for healthy little companies. Depending on the subscription your company chooses, you'll see a monthly increase of $1-$4 per user or a yearly increase of $12-$48 per user. These prices are for companies with up to 300 Office 365 subscribers. For micro-businesses with less than 10 employees, the cost of adding just a few users to your subscription may be insignificant. 

However, every dollar counts for firms with tight margins, with 3 out of 10 small enterprises in the U.S. battling to stay open during the pandemic. Consider the alternatives below rather than the full subscription fee, if the forthcoming Office 365 price adjustment threatens your budget.

3 Microsoft Office 365 full subscription alternatives

  1. Subscribe a la carte.
If you and your team only use a few Office 365 services, getting access to just those services might save you some money. You may decrease your Office 365 subscription to Business Basic if you're already on a mid- or upper-level Office 365 plan, such as Business Premium, but you don't use all of the features.

 You could also buy lifetime access to a specific service, such as Outlook. For $140, you'd have perpetual Outlook access on one machine. While this is inconvenient, if you use your computer for several years, you will save a lot of money.

  1. Look for free alternatives.
You might be able to build a free tech stack with Microsoft Teams (the free edition), Apache OpenOffice and Zoom if your team just needs a chat platform, a real-time content editing space, and recorded video sessions. Microsoft Teams' free version offers unlimited texting, while OpenOffice provides a word processor, spreadsheets, presentations and more, and Zoom's free edition has endless recordable one-on-one meetings and 40-minute group meetings. These three effective tools may be all that a small company team requires to collaborate.

  1. Make the most of other services you pay for.
Do you already have a Google account for your business? Depending on your prior Office 365 subscription level, adding Google Workspace users to your account may save you money. Users get their own customized email address, Google documents, sheets, presentations, video and instant chat tools and cloud storage for $6 per month per user.

The most important takeaway – Since 1990, Microsoft Office has become a corporate software standard. However, it isn't the only option for small enterprises. If the looming price increase burdens your small business's budget, consider other options. There are more accessible, free and low-cost choices now to keep your business running efficiently.

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