Satya Nadella, CEO of Microsoft.
Charles Pertwee | Bloomberg | Getty Images
Microsoft said Thursday it will raise the prices of commercial subscriptions to its Microsoft 365 bundles of productivity apps such as Word and Excel, formerly known as Office 365.
The price hikes will boost Microsoft’s total revenue and profit, given the Office line remains the company’s top product in terms of sales, and most Office revenue is tied to business use. While Microsoft still sells licensed versions of Office for use on premises, the company has been getting the majority of commercial Office revenue from subscriptions since 2017.
This marks “the first substantive pricing update since we launched Office 365 a decade ago,” Microsoft 365 corporate vice president Jared Spataro wrote in a blog post. The bundle has expanded to include the Teams communication app, the Whiteboard collaboration app and Power Platform application-development tools for non-developers, among other