Business Online Services Prices Drop

Prices for Microsoft Online Services, such as hosted Exchange and SharePoint, have been significantly reduced, likely in response to competitive pressures. The changes will have mixed impacts on partners, reducing commissions, but potentially generating additional services opportunities that will more than make up for the loss. Microsoft has also improved administrative services, added features, and indicated that ongoing improvements will eventually bring its hosted servers closer to feature parity with their counterparts installed on-premise at customer sites.

Pricing Adjustments

The most significant price cut was to Exchange Online Standard, a hosted version of Exchange, whose price went from US$10 to US$5 per user per month. The more advanced Exchange Online Dedicated is reserved for larger customers, but its price should also decrease, since its license prices are based partly on the price of the Standard offering.

While Microsoft explains the price decrease as a consequence of economies of scale for its growing hosted services, competitive announcements and wins probably influenced the decision. Exchange is the most popular hosted Microsoft product (hosted by both Microsoft and thousands of independent service providers), but also the product most likely to be targeted by competitors.