Microsoft will raise subscription prices for its ‘Microsoft 365’ products for enterprise and government customers starting next July. Microsoft’s products include office software such as Word, Excel, and PowerPoint. While the price increase varies by subscription, some products will see hikes exceeding 30%. Alongside the announcement, Microsoft stated it will add new features and AI (artificial intelligence). As the changes apply globally, South Korea is included in the list of countries affected by the subscription fee increase.
◇Google and others raise prices in succession
According to Reuters on the 7th, the ‘Microsoft 365 Business Basic’ product will increase from $6 to $7 per month, a 16.7% rise. Other products are expected to see increases of 5–10%. Microsoft stated the price hike reflects over 1,100 new features, AI-based productivity tools, and enhanced integrated security. This marks the first increase in three years since the 2022 commercial model price adjustment. Reuters noted, “The price increase will impact businesses and public sector institutions, with small and medium-sized enterprises facing the largest cost burdens.”
Other software companies are following suit. Google also announced price increases for ‘Google Workspace’ while integrating the generative AI ‘Gemini’ as a default feature. The Standard plan rose from $12 to $14 per month, and the Plus plan from $18 to $22 per month, reflecting 17–22% increases. Users are now forced to bear higher costs as AI becomes a mandatory feature rather than an optional choice. Adobe raised fees for its flagship subscription service, ‘Creative Cloud,’ by approximately 40% after overhauling the product to include video and audio generative AI capabilities. Adobe stated, “The price reflects new AI features.” Salesforce announced in August an average 6% price increase across its main product lines, citing AI integration. This followed a 9% hike in 2023 and marked the largest recent increase.
◇Growing subscription burdens for businesses and individuals
Recently, SaaS (Software as a Service) companies have been incorporating AI as a core feature in their products. Consequently, subscription fees for AI-integrated software are soaring. SaaStr, a SaaS platform, reported, “SaaS prices rose 11.4% this year compared to last year—far exceeding the G7 countries’ average market inflation rate of 2.7%.” Analysts attribute this to suppliers bundling AI features and raising prices, as AI incurs high operational and development costs.
This is increasingly burdening businesses and individual consumers. Typically, individuals and companies subscribe to multiple software tools for work. When combined, the cumulative price hikes become significant. Market research firm Gartner stated, “As price increases and forced bundling of AI features spread, companies are losing cost control.” It added, “60% of AI-adopting businesses are experiencing cost overruns, and organizations failing to manage these could face double the expenses.”
