Microsoft to raise prices as much as 20 percent for some flagship products

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Microsoft to raise prices as much as 20 percent for some flagship products

Microsoft on Thursday said it will raise prices as much as 20 percent for a bundle of software called Microsoft 365 that includes popular apps like Teams and Outlook.

The increases will take effect within six months, Microsoft said in a blog post announcing the change.

The Microsoft 365 suite is the cornerstone of the company's productivity and business process segment, which had sales of US$53.9 billion in its most recent fiscal year, about a third of Microsoft's overall US$168 billion in sales.

The increases will affect commercial customers and are the first since Microsoft rolled out the service a decade ago. Jared Spataro, corporate vice president for Microsoft 365, said the company has added two dozen apps to the suite since it launched.

"This updated pricing reflects the increased value we have delivered to our customers over the past 10 years," Spataro said in the post.

At the low end, basic business plans will rise 20 percent from US$5 per user to US$6, while the highest-end versions of the suite will have a smaller rise of 12.5 percent from US$32 to US$36 per user.

In Australia, the company list its plans pricing for business basic at $6.90, business standard for AU$17.20 and business premium at $27.50. Based on the international increase, Australian customers should expect approximate new pricing of $8.30 per month for business basic and  business standard to remain the same. For business premium, pricing is expected to be close to $30.25, based on the vendor's US price increases. 

Microsoft said it is not changing prices for the consumer or education versions of the software.

Shares of Microsoft hit a record high on Thursday and were last up 1.8 percent at US$295.96.

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