Microsoft 365 Price Hikes: Time to Consider Open Source?

Over the past few years, Microsoft has made a series of changes to its Microsoft 365 pricing model. For businesses locked into Enterprise Agreements, these adjustments may look small on paper—2 or 3 dollars here, 5% there—but the compounded effect across thousands of seats can mean hundreds of thousands of dollars in new annual costs.

A Timeline of Key Price Changes

• March 2022: Microsoft enacted its first-ever global price increase for core Microsoft 365 plans.

  • Office 365 E3 rose from $20 → $23/user/month
  • Office 365 E5 from $35 → $38
  • Microsoft 365 E3 from $32 → $36
    Even SMB plans were hit (Business Basic rose from $5 → $6, a 20% hike).

• 2023–2024: Microsoft introduced currency-based realignments (+9–15% in many European markets) and unbundled Teams from core suites, forcing customers to buy a separate add-on. For many, that means effective higher costs just to maintain the same functionality.

• 2025: Microsoft announced the elimination of Enterprise Agreement volume discounts (Levels B–D). From November 2025 onward, every organization small or massive pays the same public list price. For large enterprises that previously enjoyed 6–12% discounts, that’s another hidden cost increase.

Why This Matters Beyond Microsoft’s Price Sheet

Most businesses don’t buy directly from Microsoft, they go through Cloud Solution Providers (CSPs), Managed Service Providers (MSPs), or other resellers. When Microsoft raises prices or removes discounts, those vendors also adjust their margins. That means:

• Vendors pass along higher prices. The official list price sets the baseline. If Microsoft removes your 10% discount, the vendor has no wiggle room.
• Extra service fees creep in. To maintain profitability, third-party providers may raise management or support fees alongside the subscription cost.
• Budget predictability vanishes. Enterprises that counted on stable multiyear pricing now face yearly and sometimes semiannual adjustments.

In short: it’s not just Microsoft’s pricing you need to watch. It’s also the entire ecosystem of partners whose costs shift when Microsoft changes the rules.

The Open Source Alternative

This is where open source enters the conversation. Solutions built on Linux (for example, NixOS) combined with productivity suites like LibreOffice / collabora, Nextcloud, and Matrix/Element for collaboration present a very different cost profile:

• No per-seat licensing creep. Adding a new employee doesn’t mean another $35/month tax.
• Transparent costs. You pay for infrastructure, support, and maintenance—but you aren’t beholden to unilateral price hikes.
• Community-driven development. Feature roadmaps are not dictated by a single vendor’s shareholder meetings.
• Flexibility. With NixOS, businesses can configure highly reproducible, stable environments that scale with their needs.

Of course, migration isn’t trivial. Training, interoperability, and support models need careful planning. But the return on investment is compelling, especially in an environment where Microsoft can and does change pricing without negotiation.

The Bigger Picture

Price changes like those in 2022, 2024, and 2025 prove that Microsoft is willing to squeeze more revenue out of its customer base. For businesses, that means:

• Higher recurring costs year over year.
• Less leverage in negotiations as discounts vanish.
• More dependency on external vendors who themselves depend on Microsoft’s licensing structures.

For some organizations, that may be an acceptable tradeoff for familiarity and ecosystem lock-in. For others, it may be the final push to seriously evaluate open source, Linux-based enterprise stacks.

Conclusion:
Microsoft has shown that pricing stability is no longer part of the deal. If your business strategy assumes predictable licensing costs, it’s time to consider alternatives. Whether that means a partial hybrid setup or a full move to Linux and LibreOffice, the key is to recognize that open source doesn’t raise its prices just because a fiscal quarter demands it.