Microsoft raises prices for Office features in Microsoft 365
Why is Microsoft Paying You More? Why Microsoft is Raising the Prices of Personal and Family Office Services for Users to All Subscribing Users
Consumers are sensitive to price increases, so they will be less likely to pay more for Artificial Intelligence features. If you don’t want Microsoft to charge you more for certain features then they’ll keep the same price for existing subscribers.
“It’s free and secure AI chat that’s GPT-powered,” explains Jared Spataro, Microsoft’s chief marketing officer of AI at work, in an interview with The Verge. It’s very comparable to the competition because you can upload files and it’s better than the competition. Spataro wouldn’t give a name for the competition, but it was clearly chatgpp and google’s cydia.
“The first question people ask me is ‘am I writing you a blank check?’” says Spataro, but Microsoft has built controls for how people pay for AI agent access. You can pay the meters in different ways. The other way to go is through consumption packs, which is when the pack runs out, and payas-you-go, which is essentially an open account that you are burning down.
A hypothetical agent in Microsoft 365 The data stored in Microsoft Graph is used to answer employee questions. The agent consumed 200 generative answers and 200 tenant Graph grounding yesterday. Therefore, it would cost 6,400 messages or $64 for that day.
“A message is equivalent to 1 cent, so you can essentially convert it over to 1 cent, 2 cents, and 30 cents,” explains Spataro. “It spins an Azure meter and it burns down a customer’s MACC (Microsoft Azure Consumption Commitment).”
Microsoft says that people don’t like paying an additional $20 a month for Office features because they don’t want to pay more, but it’s true that the company is always trying to bring in more users.
Microsoft is increasing the price of its subscription services for personal and home use in the US to bring Office features to all subscribers. “We are raising the prices of Microsoft 365 Personal and Family for the first time in 12 years,” says Oystryk. “We’ve never actually raised the price in the US and we’re raising it by $3 a month, along with similar amounts in other markets.”
“We’ve created two new plans that are really only going to be available for the next year, Personal Classic and Family Classic,” explains Oystryk. “They’ll be available as folks go through the renewal cycle. They have an opportunity to choose one of the Personal Classic or Family Classic plans if they cancel.
New subscribers will get Office features by default when they sign up for the new subscription plans, which will be only available to existing Microsoft 365 subscribers. It appears that the classic plans will not have any of Microsoft’s new features. Although they will continue to get security updates and minor feature updates, any new innovations that we deliver in the future will not be included in the plans.
It is easy to turn off Copilot in Office apps if you don’t want an assistant or you aren’t a student at your school. “The most interesting piece of feedback we learned is that there are times where our users want to turn off Copilot,” says Oystryk. “We’ve been working to add new settings to some of our key apps that allow people to toggle off Copilot.” This is coming to Word first today and then Excel and PowerPoint in the coming weeks.
