Microsoft has announced an alarming price increase for its Microsoft 365 (M365) subscriptions in six Asia-Pacific countries: Australia, New Zealand, Malaysia, Singapore, Taiwan, and Thailand.
These hikes, ranging from 29% to 46%, are attributed to the integration of advanced AI features (e.g., Copilot) into the suite. For instance, the annual M365 Family subscription in Australia will rise from AU$139 to AU$179, marking a 29% increase, while the Personal subscription will jump from AU$109 to AU$159, marking a 46% surge.
As first reported by the Register, A Microsoft spokesperson explained that these adjustments reflect the extensive subscription benefits added over the past 12 years, including advanced security with Microsoft Defender, creative tools like Clipchamp, and enhancements to core applications like Word, Excel, PowerPoint, OneNote, and Outlook.
According to the tech giant, the inclusion of new features like Microsoft Copilot and Microsoft Designer further justifies the price changes.
Subscribers who prefer not to access these AI features have the option to choose a version of M365 without Copilot, potentially avoiding the price increase.
However, some users have reported difficulties in locating this alternative option, noting that it only appears during the subscription cancellation process.
Backlash
The reaction from users has been typically negative, with many accusing Microsoft of price gouging and exploiting their position in the space. The company has stated that it will “listen, learn, and improve” based on customer feedback during this rollout.
This move aligns with a broader industry trend of integrating AI into productivity suites, often accompanied by price adjustments.
Google recently incorporated its AI Gemini Business plan into the Google Workspace suite, resulting in a 17% subscription increase.
These strategies reflect tech giants’ efforts to offset substantial investments in AI infrastructure by passing costs onto businesses and consumers.
Expect more to come
As AI integration into common SaaS applications becomes increasingly common, price fluctuations should be expected for most users. We recommend exploring alternative solutions that offer similar features at lower price points.
Many users are early in their AI journey and don’t need fully integrated solutions. Options such as ChatGPT, Google Gemini, Claude AI, and provide various AI-driven functionalities that could serve as substitutes for Microsoft’s offerings.
Microsoft’s decision to test substantial price increases in select Asia-Pacific markets underscores the grip a select few have on global markets. Microsoft has long owned the desktop, and with its integration of Microsoft Teams and the 365 suite, it becomes increasingly difficult for users to leave the service.
It also highlights the high-stakes nature of the AI market right now. We will continue to see companies embed advanced AI capabilities into their products. However, it also highlights the challenges and potential backlash associated with passing these costs onto consumers.
