Price Increases

We mentioned briefly yesterday that Microsoft was raising prices, and here are the details. Microsoft will charge more for Office 365 for the first time in 10 years. That news sent their shares to new highs, comfortably above $300. The stock is now up 39% for the year.

I was really surprised to hear that this was the first price increase since 2011. The Microsoft Office suite is so important for so many businesses. Just think of all the billions of dollars budgeted, captured and then tracked on Microsoft Excel.

The price hikes are rather small, but Microsoft's revenue will be swelled across hundreds of millions of accounts. The top-end premium Office 365 goes from $35 a month to $38. The Business Basic package goes from $5 to $6. The increases also come with extra features, some bundles will now include Teams and Whiteboard.

We often talk about Netflix and their ability to raise prices at will. Microsoft has that power too. I highly doubt that many of their 300 million paid Office clients will leave because of these marginal increases. What a fantastic business!