Keepinga schedule set at its WorldwidePartner Conference in July,Microsoft has finally released service plans that will make it cheaper for smalland medium-sized businesses (SMBs) to use Office 365.

There is a small sting in the program, which went into effect last week. New customerscan access the new and cheaper plans straight away, but those alreadysigned up to Office 365 SMB plans will have to wait until late next year beforethey will transitioned to the new plans.

Office 365 For SMBs

That said, even for existing customers, the new pricing will make it considerably cheaper to use Office 365.

It will also make it easier to budget, with a starting price point that will probably make many SMBs think twice before opting for Google Drive for Work. The new plans also include the added temptation of Yammer. The plans are as follows:

  • Office 365 Business:This plan offers the full Office suite of applications including Outlook, Word, Excel, PowerPoint, OneNote and Publisher. It also includes OneDrive for Business cloud storage, enabling easy sharing and collaboration on Windows PC, Mac, iPad, Windows tablet and smartphone. It costs $8.25 per user per month, or $99 per year.
  • Office 365 Business Essentials: This offers the basic and core cloud services for business including business class email and calendaring. It includes Office Online, online meetings, IM, video conferencing, cloud storage and file sharing. It costs $5 per user per month, or $60 per year.
  • Office 365 Business Premium: Everything from both the Office 365 Business and Business Essentials plans. It costs $12.50 per user per month, or $150 per year.

Microsoft And Google

Microsoft says it introduced the plans at the behest of its existing customers, which is probably somewhat true. However, it’s more likely that it introduced the new plans as a counter-move to Google, which has been building out its enterprise apps and has starting specifically targeting SMBs with the launch of Google for Work.


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Google Apps have always been an attractive option for SMBs with its $5/user/month and $10/user/month plans for its Apps for Business. However, these new plans and the functionality that Microsoft is offering will make any decisions to jump ship considerably harder.

Learning Opportunities

Microsoft dangled yet another carrot by abolishing the 25-seat limit that exists with the current SMB plans. Under the 25-seat cap, business were hammered with a massive price hike as they grew beyond that.

The new plans set the cap for all SMBs at 300 seats, which means that a small business can grow at its own rate and know that the price will remain the same up to 300 employees.

Finally, if you are a small business already signed-up for a SMB plan and want to know when, or to what plan you will be moved to in the coming months, Microsoft advises you to check out your Office 365 for the next steps.

Let’s see how Google responds.

Title image by Hindrik Sijens  (Flickr) via a CC BY-NC-SA 2.0 license.