Leading tech giant Microsoft announced earlier today that it had lifted the price of some Office 365 productivity software subscriptions for businesses in 2022. The move has seen investors become bullish about the company and what it would offer in the coming year.
Thanks to this latest development, many analysts have updated their estimates for Microsoft for the coming year. According to some of the analysts, the price increase could massively boost Microsoft’s revenue and profit in the coming fiscal year since the cost of offering Office 365 has already been added to Microsoft’s operations.
Office 365 subscriptions contributed roughly 18% to about 18% of Microsoft’s revenue in its fiscal year that ended on 30th June. Goldman Sachs analyst Kash Rangan said the financial institution believes Microsoft’s announcement shows its strong competitive positioning and long-term pricing power. This would help further ARPU growth through CY22 and also push SKU migration to E3 and E5.
The price for premium Office 365 E is set to increase by 9% per user each month. The changes are set to come into effect starting on 1st March 2022. Meanwhile, the price of the Office 365 E1 will rise by 25%.