April 19, 2014

Telstra to cut Office 365 prices on 1 May

Likely to be in line with US price cut.

Telstra has notified partners of its T-Suite cloud software platform that it would reduce prices of Office 365 from 1 May. The move addressed concerns about passing on Microsoft’s price cut to Office 365 in the US .

While the price cuts have not disclosed, it would be fair to assume that the decrease in price will closely match the cuts by Microsoft.

While the lower Office 365 prices were available for customers in other countries who bought directly from Microsoft via the www.office365.com website, the updated pricing was not passed on to customers who bought indirectly. These included businesses buying through syndication partners such as Telstra in Australia, Vodafone in nine countries and various other carriers throughout the world.

Microsoft customers under Enterprise Agreements in all countries (only available to businesses with over 250 desktops) will also only get access to the new pricing as of 1 May.

Microsoft customers on Office 365 (either direct, via Enterprise Agreement or through syndication partner) are generally on 12-month subscriptions which means they will not pay the reduced price until the end of their annual term. The updated prices are available for new customers or existing customers purchasing a new class of licence.

When Office 365 was launched Telstra took a unique approach by offering month-to-month billing for Office 365. In the rest of the world Office 365 is only sold as 12-month contracts.

In light of this, Telstra will be dropping the price for existing customers with Office 365 subscriptions, something that will cost the telco a great deal of money but is in line with CEO David Thodey’s commitment to customer satisfaction.

While the price drop will benefit customers around the world and make Office 365 even more financially appealing than Google Apps, Microsoft is yet to address how the reduction will affect partners who receive commission payments based on the value of their customer subscriptions.

 

Loryan Strant is a Microsoft Office 365 MVP (Most Valuable Professional). Follow him on Twitter @TheCloudMouth.

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