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Microsoft slashes SMB Office 365 prices by up to 31%

Gregg Keizer | July 11, 2014
Microsoft's price cuts for some Office 365 plans was an attempt to keep momentum on its software-by-subscription push, an analyst said.

Or it could mean Microsoft realized its pricing was not competitive with alternatives, such as Google Apps for Business — which costs $50 per user per year — and needed to lower them to keep current Office shops in the Redmond, Wash. company's orbit.

Interestingly, the price of Office 365 Business, the plan that will be the locally-installed suite and online storage, was nearly identical to that for Office 365 Home Premium, the $99.99 per year top-tier consumer program that also is, more or less, mostly about the software and little about the services.

Miller also saw signs in yesterday's announcements that Microsoft would make it easier for customers to not only know what they were getting — always a possible trouble spot with the company's complicated licensing and offers — but understand what they needed to do to get Office 365 up and running.

On Wednesday, Microsoft touted new flexibilities, including letting customers move between plans — from the Business level to the Enterprise tier, for example — and putting workers into different buckets, or plans, rather than being forced to adopt a one-size-fits-all solution.

Miller called the current small- and mid-sized business plans "cumbersome" and "painful," an area where he said Google's Apps for Business, though not without its own problems, was ultimately more approachable, especially for very small firms. "The technology, whether 'Click-to-Run' or the apps on the iPad, is pretty seamless and works well," said Miller. "What's not are things like switching domains or migrating from what I have now to Office 365. It's a point of difficulty.

"Things like Microsoft trying to make the [Office 365 plans'] packaging more logical show me that they realize that," Miller said. "These changes show that Microsoft, or the Office org, is moving in one direction. They have been moving all these pieces toward a final picture, like the announcement [in April] of OneDrive for Business [with 1TB of free storage per user]. It's all starting to make more sense."


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