Microsoft Bundles AI Features into Microsoft 365, Raises Prices Amid Mixed Reactions

Microsoft Is Making Office Users Pay for AI. It Could Backfire. | The Motley Fool

A big success story for software giant Microsoft (MSFT 1.05%) over the past decade has been Office 365, now called Microsoft 365. Facing competition from Alphabet's Google Docs, Microsoft launched subscription versions of its iconic Office applications. The old model of selling pricey one-off licenses was under threat, and Microsoft successfully convinced tens of millions of consumers and businesses to pay annual fees to access its software. At the end of Microsoft's most recent quarter, the number of consumer Microsoft 365 subscribers grew to 80.4 million. While Microsoft doesn't disclose revenue directly, based on the old pricing, this subscriber base is likely generating somewhere between $5 billion and $10 billion in revenue annually. I say "old pricing" because Microsoft has just enacted an enormous price increase on its consumer Microsoft 365 plans. The Personal and Family plans will see a $3 bump in monthly pricing and a $30 bump in annual pricing. The annual Personal plan will now be about 42% more expensive, while the annual Family plan will be 30% costlier. This is the first price increase for either plan in more than a decade. Why the sudden spike in pricing? You can blame Microsoft's massive investment in artificial intelligence (AI). After rolling out a $20 per month Copilot Pro subscription plan in early 2024, which brought AI into the company's Office applications, the company is now bundling Copilot with Microsoft 365 and making consumers pick up the tab whether they use it or not. While Microsoft highlighted other improvements made to its Office applications over the past decade, the cost of running AI models in the cloud is almost certainly the primary driver behind this price increase. The AI features that are now part of Microsoft 365 aren't unlimited. Subscribers will get a certain amount of AI credits each month, which are consumed when AI features are used. Microsoft is keeping Copilot Pro as an option for consumers with high usage needs, allowing Microsoft 365 subscribers to upgrade and pay the additional $20 per month. An extra $30 per year from each consumer Microsoft 365 subscriber would add up to nearly $2.5 billion in extra annual revenue. Of course, there are costs associated with providing AI services, and this number assumes no subscribers will cancel due to the higher pricing. Still, that's a meaningful amount, even for a company the size of Microsoft. Microsoft is betting that its Office applications are important enough to its subscribers that a big price increase won't deter them from renewing their subscriptions. For subscribers who use these new AI features, the price increase may very well be worth it. But there will likely be many subscribers who want nothing to do with Microsoft's AI, and they'll be paying far more and getting nothing in return. The risk for Microsoft is not losing power users who are invested in its ecosystem but instead losing users who pay for Microsoft 365 because they have a slight preference for it over the alternatives. If you're a heavy user of Excel, for example, it would be a pain to move your spreadsheets over to Google Sheets. In contrast, if you mostly just use Word and dabble with everything else, switching costs are relatively low. Even if a meaningful number of subscribers drops Microsoft 365, Microsoft will likely still boost its revenue due to the sheer size of the price increase. However, it's hard not to view this price increase as a customer-unfriendly move aimed at recouping AI investments, and that could drive customers to alternatives in the long run. The trend of tech giants jamming AI features into existing products and then raising prices is likely here to stay as companies pour mountains of cash into AI investments. Whether consumers will be willing to pay for these AI features remains an open question.

Microsoft raises 365 prices to bundle AI tools: Is it worth?

Microsoft has announced that it will bundle AI-powered Office features into Microsoft 365 Personal and Family subscriptions globally, while simultaneously raising prices for these subscriptions by $3 per month in the U.S. This adjustment follows a previous $20 fee for Copilot features in Office apps, which will now be included with the new subscriptions. Gareth Oystryk, senior director of marketing for Copilot Pro and Microsoft 365, stated, "We know that people are willing to pay for the integration into Microsoft 365." The aim is to make AI features more accessible to a broader range of users. However, Copilot Pro will remain available for $20 per month for those desiring priority access to new AI models and features. The price increase for Microsoft 365 will be the first in 12 years, as Oystryk noted, "We've never actually raised the price in the US and we're raising it by $3 a month." Existing subscribers can opt to retain their current plans without the AI features, if they choose not to pay the additional fee. To accommodate existing users, Microsoft has introduced two new plans -- Personal Classic and Family Classic -- available for the next year. These options will offer the old pricing without the added AI features for subscribers who do not wish to transition to the new pricing structure. According to Oystryk, these plans will not receive new innovative features but will continue to receive security updates and minor updates. As part of the changes, Microsoft is also implementing an AI credits system that gives a monthly allocation of credits for features across various applications, including Word, Excel, PowerPoint, Outlook, and OneNote. Users can use these credits for tasks such as image generation in the Designer app. Copilot Pro will provide unlimited usage of these AI features within a fair usage policy. Microsoft is also making it easier for users to turn off Copilot in Office apps. Oystryk highlighted feedback that demonstrated users may want to disable the AI assistant in certain situations, such as academic environments. This option will first be introduced in Word, followed by Excel and PowerPoint in upcoming weeks. Since its introduction in 2013, Microsoft 365 has seen various enhancements, and the addition of Copilot aims to further integrate AI into users' daily productivity tasks. Starting in October 2024, the Copilot features will become widely accessible, benefitting the estimated 84 million consumer subscribers by enhancing productivity through AI tools. Microsoft 365 subscribers will receive AI credits that can also be utilized in applications like Microsoft Designer, Paint, Photos, and Notepad. For Microsoft 365 Family subscribers, Copilot access is exclusive to the subscription owner and cannot be shared. Users who frequently engage with Copilot might consider upgrading to Copilot Pro to avoid usage limitations.

It's official: All your Office apps are getting AI and a price increase

Every Microsoft 365 Personal and Family subscription is about to get Copilot AI features, along with a price increase of at least 30%. The global rollout comes after months of testing and is certain to be controversial. If you've got a Microsoft 365 Personal or Family subscription, you're about to get a jumbo serving of AI in your Office apps. Word, Excel, PowerPoint, OneNote, and Outlook will all get a new Copilot button that opens a prompt pane where you can get help writing documents, analyzing spreadsheets, summarizing email messages, and building presentations. In addition, those subscriptions will get the AI-powered Microsoft Designer app, which can build images from prompts and edit unwanted objects from existing photos. The new features, announced in a post on the Microsoft 365 blog, will be available as part of the latest Microsoft 365 update and come with a significant price increase. In exchange, subscribers will receive a monthly allotment of 60 AI credits that can be used with Copilot and Microsoft Designer across a variety of apps. The credits reset on the first of each month, regardless of when the subscription renews. Also: 15 ways AI saved me time at work in 2024 - and how I plan to use it in 2025 Microsoft 365 Family subscribers will see a 30% price increase, from $10 to $13 per month. The cost of an annual subscription will go up to $130 from the current $100. With a Microsoft 365 Personal subscription, you'll see an increase of nearly 43%, from $7 to $10 per month, with the annual rate going from $70 to $100. The new prices will be effective at the next renewal period. The global rollout of Microsoft 365 Copilot comes after several months of testing in Australia, New Zealand, Malaysia, Singapore, Taiwan, and Thailand. Microsoft promised it would "listen, learn, and improve" based on feedback from customers in those countries. At least one part of today's announcement appears to be a direct response to that feedback. "[We] know there are times when AI assistance isn't desired (like in some academic scenarios), so we're adding settings in apps like Word, Excel, and PowerPoint that allow you to disable or enable Copilot as needed." That link goes to a support article that instructs users on how to disable all connected experiences, which includes suggested replies in Outlook, the Microsoft Editor add-in, and the ability to dictate text. It's possible to hide the Copilot button from the ribbon on those apps, but it doesn't appear there will be a simple checkbox to enable or disable Copilot. Also: How Microsoft's AI Copilot features could transform teamwork and projects As in the test markets, customers with current Microsoft 365 subscriptions can opt out of the AI-enhanced versions (and keep the current pricing) by switching to a Personal Classic or Family Classic plan. New subscribers apparently will not be able to choose a Classic plan, and Microsoft cautions that those downgraded products are "limited offers and may not always be offered as a plan option." Even after switching to a Classic plan, Microsoft notes, you might still have access to the AI-enhanced version; the plan change will take effect at renewal. For Microsoft 365 Family subscriptions, the new features are available only for the subscription owner and can't be shared with others. Those users will either need their own subscription or will have to pay $20 a month for a Copilot Pro subscription. I've been following forums where subscribers in Australia, New Zealand, and other countries in the test market provided feedback to Microsoft. That feedback has been overwhelmingly negative, with plenty of customers vowing to cancel their Microsoft 365 subscriptions rather than accept the price increase. Also: Microsoft Copilot vs. Copilot Pro: Is the subscription fee worth it? No doubt someone in Redmond has put together a spreadsheet that predicts just how many of those subscribers are likely to follow through with their cancellations and how many will simply accept the price increase. Maybe they even had Copilot help them whip up an Excel formula to build that model. If so, it might be smart to listen to Copilot's own warnings. "While I strive to be reliable, I'm not perfect and can occasionally make mistakes," Copilot told me just now. "It's always a good idea to double-check important information, especially if it impacts significant decisions or actions."

Microsoft follows Google with price bump, forced AI 365 bundles

Microsoft 365 is getting a $3-per-month price increase for Copilot AI tools. Existing subscribers can opt out, but only for a limited time. Two days ago, Google announced that it was doing away with a separate upcharge for its Gemini AI features in Workspace and forcing you to pay for it instead whether you want AI or not. Today, Microsoft is following suit, raising prices for its Microsoft 365 packages by $3 per month and bundling in some Copilot AI tools to justify the bump. In the announcement post, Microsoft says that the price of Microsoft 365 will be rising from $7 to $10 per month for Personal subscribers and $10 to $13 per month for the Family bundle. Per-year prices will be rising from $70 to $100 (Personal) and $100 to $130 (Family). What do you get for that 42 percent jump in price at the lowest tier? Access to Copilot-powered text generation, formatting, and queries in Word, Excel, PowerPoint, Outlook, and OneNote, plus AI-generated images and editing in OneNote. You won't have unlimited use of these tools, by the way. You get 60 "AI credits" per month, and they can't be banked or rolled over. Copilot Pro, which costs an additional $20 per month on top of existing 365 plans, is currently the only way to get "extensive usage." (Presumably that means unlimited credits since it isn't enumerated.) Existing users won't see the price increase until the next billing cycle, but new users get it right away. If you're an existing subscriber and don't want the new features, you can switch to "Classic" versions of these plans ($7 per month for 365 Personal and $10 per month for 365 Family) by jumping through several hoops. The option to manually switch to a Classic plan will only be available "for a limited time." It's hard to interpret this don't-call-it-a-price-increase upsell as anything other than a forced integration of AI, just like Google's recent move. The market has shown that people aren't buying new PCs to get AI, and it would seem that they aren't interested in expensive add-on packages like Copilot. So both companies are resorting to inserting their AI infrastructures into existing products and charging more. I can't see it as a popular solution for anyone except shareholders... and maybe not even them, if these companies can't show that removing consumers' choices results in increased profits.

Microsoft 365 Is Going Up in Price, and It's Because of AI

I've Abandoned Third-Party Antivirus and I'm Never Looking Back The Microsoft 365 Personal and Family plans are going up in price, in part because they now include Copilot AI features. Existing subscribers can opt out if they are on recurring billing. Microsoft announced today that Copilot AI features are now included in Microsoft 365 plans, across both single-user ('Personal') and family plans. That includes summarizing, writing, and outlining features in Word, Outlook, PowerPoint, and OneNote, as well as asking questions about the current document in the Copilot sidebar. These features started showing up in 2023, and more have been added over time, but they required the separate Copilot Pro subscription or a compatible organization-managed account. ✕ Remove Ads Before now, you could avoid the AI features in the Microsoft 365 apps by simply not signing up for Copilot Pro, or by using the one-time purchase version of Office. Now that it's bundled, Microsoft is adding a new setting to turn off Copilot features when needed. The company is also saying again that your prompts, responses, and file contents are not used to train AI models. Microsoft 365 plans are also going up in price. That makes the individual Microsoft 365 Personal plan $100/year or $10/month, up from $70/yr or $7/mo. The Microsoft 365 Family plan is now $130/yr or $13/mo, up from $100/yr or $9/mo. However, existing subscribers with recurring billing enabled can switch to the new Personal Classic or Family Classic plans. The cheaper Microsoft 365 Basic plan with 100GB storage and no desktop Office apps is also an option for $2/mo or $20/yr. ✕ Remove Ads Microsoft isn't even promising unlimited AI feature usage for the price increase. The AI features use up your monthly allotment of 'AI Credits,' which is shared across all apps on the current Microsoft account, including the text and image editing in Windows apps like Notepad and Paint. Microsoft says, "the monthly allotment should be enough for most subscribers," and you'll have to pay for Copilot Pro if you need more. It sure seems like this is Microsoft making everyone pay more for AI features that many people don't care about. Copilot Pro worked well enough as an add-on for the people who needed that functionality, but it's probably more profitable for Microsoft to bundle it with the more popular base subscriptions while increasing prices. That's a strategy we've seen over and over again with Amazon Prime, which now includes everything from free shipping to discounts on fuel at gas stations, so every price increase can be answered with "but you get so many benefits!". If you never end up using the AI features, then that's even better, because Microsoft gets more profit from your subscription. Google is also pulling the same move with Workspace and its Gemini AI features, but that's limited to organization-owned accounts for now. ✕ Remove Ads To play devil's advocate, this is the first time Microsoft has increased prices since the home version of Office 365 was released in 2013. The original $100/year price for the personal plan adjusted for inflation would be around $134/yr, so the plans are still under the cost of inflation. You can also still buy the Office apps without a subscription or cloud storage, or get the Microsoft 365 Basic plan with 100GB cloud storage and no Office apps. No one likes price increases, and using AI features with questionable utility as the main selling point probably isn't helping. Still, there are other plan options you can check out, or just switch to free office suites like LibreOffice and Apple's iWork. Source: Microsoft

Microsoft 365 Personal and Family plans now include AI, with a $3 monthly price hike

TL;DR: Microsoft is adding Copilot-powered AI features to its Microsoft 365 Personal and Family plans after rolling them out to businesses and Copilot Pro subscribers. However, the AI features come at a price, as Microsoft hiked subscription fees for both plans by $3 per month or $30 per year. Microsoft 365 Personal subscriptions will go from $7 monthly and $70 annually to $10 and $100, respectively. Family subscriptions will also rise from $10 a month and $100 a year to $13 and $130, respectively. The new plans go into effect immediately for first-time subscribers and upon renewal for existing 365 members. Microsoft will still offer 'Classic' Personal and Family plans without Copilot, but only "for a limited time." These plans will have no AI features, maintaining their current pricing. Unfortunately, only existing users can opt for the Copilot versions. New subscribers must sign up for the more expensive plans, like it or not. However, the good old $2 per month Basic plan, which offers no AI features, will remain an option for the foreseeable future. Interestingly, customers with AI-infused plans will have the option to disable Copilot when they want. Users can disable the feature in the Settings of apps like Word, Excel, and PowerPoint under "academic scenarios." The new Copilot-powered plans come with one significant caveat aside from the price hike. Subscribers won't have unlimited access to the AI features. Instead, they will get 60 AI credits per month for AI services across all the Office apps. Users can also spend credits to generate images or text in Windows apps like Designer, Paint, and Notepad. Customers wanting unlimited access to all the latest AI features must sign up for a Copilot Pro subscription for $20 extra monthly. This change is the first time Microsoft has increased the prices of Microsoft 365 Personal and Family plans in the US since it rolled out the service in 2013. However, the company did raise pricing for the business and consumer plans in other regions.

Microsoft 365 gets massive 45% price hike -- and it's all to do with AI tools

Nobody likes a price hike but Microsoft is preparing to raise the cost of its 365 subscriptions to "ensure Microsoft customers are among the first to access powerful AI features in our apps." The (somewhat) good new is it's only happening in a few countries for now and the U.S. isn't among them. As spotted by The Register (via TechRadar Pro), Microsoft has sent out emails to 365 users in six Asia-Pacific countries, detailing that subscriptions will see a big price hike of up to 45%. The increase will come to Microsoft 365 Family and 365 Personal subscriptions. According to emails, Australian 365 Family users will also see an increase from AU$139 to AU$179, while 365 Personal subscribers will have a rise from AU$109 to AU$159. That's a 45% price hike, and it's all for AI features and enhancements in apps that's contributing to it. Currently, these price increases have been noted in several countries: Australia, New Zealand, Malaysia, Singapore, Taiwan and Thailand. While there's no word of this steep cost raise coming to other countries, we've already heard of Microsoft announcing a 365 and Copilot price hike, which is set to arrive in April. The price hike is set to contribute to several improvements to a suite of apps, such as "advanced security with Microsoft Defender, creative tools like Clipchamp, and countless enhancements to Word, Excel, PowerPoint, OneNote and Outlook," a Microsoft spokesperson said. More importantly, it comes with Microsoft Copilot and Designer. Fortunately, as stated in the post, these price hikes aren't mandatory if users don't want the added AI features, as a basic version of Microsoft 365 will be available, too. One of the biggest AI features that seems to be bumping up the price for Microsoft 365 subscriptions is Copilot, but it's already had a rocky start. Microsoft Recall is an interesting yet flawed feature, while other features can be fun and useful, but not worth a 45% price increase. If Microsoft follows through with this high price hike around the world, it will need to ensure that it's AI features are updated and upgraded, offering more to users in apps such as Word, Excel, PowerPoint and more. Even our own Alex Wawro thinks Apple Intelligence is already better than Windows Copilot despite it still rolling out. Luckily, there are other feature Microsoft is bringing to PCs, including being able to connect to a Meta Quest headset with three virtual displays, along with bringing an AirDrop-like feature for Windows to share files easily between a PC and iPhone.

Microsoft integrates Copilot AI into 365 suite, raises subscription prices By Investing.com

Investing.com -- Microsoft (NASDAQ:MSFT) announced on Thursday that it has added Copilot AI features to its Microsoft 365 suite for individual users. This move comes a day after the company introduced on-demand AI agents for businesses. The tech giant is providing its customers with two options: a Microsoft 365 subscription plan with Copilot AI features or a plan without these features. In addition to this, the price for subscription plans in the U.S. will rise by $3. Copilot is designed to aid users across various apps in the Microsoft 365 suite, including Word, PowerPoint, Excel, Outlook, OneNote, and Designer. The usage of Copilot AI, however, will be limited by monthly credits, an amount Microsoft believes will be sufficient for most users. Microsoft is also allowing users to turn off Copilot in situations where AI assistance isn't needed, such as during academic tests and submissions. The company assured that prompts entered by users will not be used to train its AI models. Microsoft's decision to incorporate AI into its suite comes amidst pressure to demonstrate the payoff of its substantial investment in AI. This includes its investment in OpenAI and plans to spend about $80 billion on data centers and AI infrastructure in the current fiscal year. The integration of Copilot AI follows skepticism about its usage. A Gartner (NYSE:IT) report last year expressed doubts about its adoption, prompting Microsoft to promote its uptake more aggressively.

Copilot AI Added to Microsoft 365 Apps Alongside $3-Per-Month Price Hike

If you're on a Microsoft 365 Personal or Family subscription, prepare for a heavy dose of Copilot AI -- and a corresponding price hike. After testing the Copilot-integrated 365 bundle in a few overseas markets in November, Microsoft is now adding Copilot to Word, Excel, PowerPoint, Outlook, OneNote, and other apps in the 365 suite to make its AI capabilities "more accessible to a wider audience." This eliminates the need for a $20 Copilot Pro add-on to try the AI features in Office apps, but it increases the overall subscription fee. A Microsoft 365 Personal plan now costs $9.99 per month, up from $6.99, and the 365 Family plan costs $12.99 per month, up from $9.99. This is Microsoft 365's first price hike in 12 years, and the company says it "reflects the extensive subscription benefits that we've added over the past 12 years and enable us to deliver new innovations for years to come." The revised bundles have a couple of limitations, though. Users will receive a monthly allotment of 60 AI credits for Copilot, which ticks down every time they ask Copilot to execute a task, such as generating text, creating a table, or editing an image. Those who don't want to worry about credits will need the Copilot Pro add-on. Another drawback is that the Family subscription tier limits Copilot access to the subscription owner. It can't be shared with other plan members.

Microsoft 365 is getting a price hike for the first time in 12 years... because of Copilot

Summary Microsoft 365 users face price increases for added Copilot features. Copilot is now included in the suite by default, impacting all users. Uncertain how price hike will affect subscriber count & revenue. How much do you use the Copilot features on Microsoft 365? If your answer to that is "not a lot," then there's some bad news on the horizon. Your monthly bill for using the service is about to go up, and it's likely due to the addition of AI services across the platform. Worst of all, you can't opt out of this price rise, either; everyone is getting hit by it regardless of how much they use (or want) Copilot. Related Microsoft Copilot: What is it, and how does it work? Is Microsoft Copilot the best AI chatbot available right now? Posts Microsoft 365 users will pay extra for Copilot additions In a post on the Microsoft 365 blog, the company celebrates the addition of Copilot to its productivity suite. Beforehand, you needed to add a Copilot Pro subscription to unlock it, but now it's part of the suite by default. So, this means everyone's getting Copilot for free, right? Well, not so fast. As it turns out, everyone is now paying for it, regardless of if they use it or not: To reflect the extensive subscription benefits that we've added over the past 12 years and enable us to deliver new innovations for years to come, we're increasing the prices of Microsoft 365 Personal and Family in the US for the first time since its release by $3 USD per month. Existing subscribers won't experience the price increase until their next renewal. It's hard to tell how this will affect Microsoft 365's subscriber count. Will people end up canceling over the price hike, or is it small enough for people to accept and move on from? And if people quit, will the additional $3 per month from subscribers cover the hole? Regardless, if this news has put you off using the suite, be sure to check out these Microsoft Office alternatives for something new.

Microsoft 365 Is Adding Copilot AI Tools. It's Also Getting More Expensive.

The cost of Microsoft 365 Personal and Family subscriptions will increase by $3 a month. Microsoft (MSFT) is bringing its Copilot artificial intelligence assistant to Microsoft 365 applications for consumers and raising the bundle's subscription price for the first time since its launch in 2013. The move gives Microsoft 365 subscribers access to an AI features within Word, Excel, PowerPoint, Outlook, and OneNote that can generate content when prompted, the company said in a blog post Thursday. Subscribers will receive a monthly allotment of AI credits to spend on these tasks. Microsoft 365 is also adding an application called Microsoft Designer, which can edit images and create new ones using AI. With Copilot in tow, the cost of Microsoft 365 Personal and Family subscriptions will increase by $3 a month to $9.99 and $12.99, respectively, or $99.99 and $129.99 annually. A family subscription serves up to six people. Shares of Microsoft edged 0.4% lower to close at $424.58 Thursday. They've gained close to 8% over the past 12 months.

Microsoft 365 sees 43% price hike thanks to Copilot -- existing customers safe until renewal

According to a new blog post from Microsoft, Microsoft 365's Personal and Family plans have been bundled with Copilot and priced up to roughly $3 a month. The latest monthly cost is $9.99, up from $6.99, and the new annual fee is $99.99, up from $69.99. In addition to the basic plans getting Copilot rolled in, there are now additional "Basic," "Personal Classic," and "Family Classic" tiers without Copilot and "other advanced features" added for users who do not use AI in their workflows. For those who remain on the Personal and Family plans, a monthly allotment of 15 AI credits to use Copilot with Office 365 applications and Designer, Paint, Photos, and Notepad on Windows 11 will be given. Copilot Pro is still a separate upgrade for those who want unlimited use. Microsoft's original blog post states, "Our plan has always been to make Copilot in the Microsoft 365 apps more accessible to a wider audience at a great price. We planned several steps in our Copilot journey to listen, learn, and improve usability and performance. [...] We're delighted to empower millions of our customers with an AI assistant that supercharges the productivity apps they already know and love. We'll continue offering Copilot Pro for consumers with extensive usage needs, along with Microsoft 365 Copilot, our commercial offering, for organizations of all sizes" Past the details we discussed above, the rest of the original Microsoft blog post showcases existing Copilot features and how they're integrated into different aspects of the Microsoft 365 suite. Microsoft also claims that using these features will not surrender your prompts, responses, or even file content for use while training its Copilot AI model. Of course, Microsoft claims that using your data is a temporary input only when prompted. Existing Microsoft 365 Personal and Family plan subscribers need only update their apps to receive their new Copilot benefits. For existing customers, the price hike won't be kicking in until plan renewal, and there are options to downgrade the plan. Those who want to avoid using AI can downgrade the plan to the "Classic" or "Basic" Microsoft 365 plans. While this may have been a more controversial move from Microsoft -- basically forcing AI use and a price hike on a large existing customer base -- adding tiers without AI below the main Personal and Family plans is welcome. However, some contradictory language does leave some questions in the air. Apparently, the "Classic" plans are available "for a limited time". However, this may just refer to the ability for existing customers to downgrade since the following sentence immediately claims, "These plans (having just listed Basic and the two Classic plans) will continue to be maintained as they exist today."

Microsoft bundles Office AI features into Microsoft 365 and raises prices

Microsoft is bundling its AI-powered Office features into Microsoft 365 Personal and Home subscriptions, but it's also raising prices as a result. Previously, Microsoft 365 subscribers had to pay an extra $20 per month to get Copilot inside Office apps like Word, Excel, and PowerPoint as part of a Copilot Pro subscription, but Microsoft is now adding these AI features to Microsoft 365 apps for an extra $3 per month. Existing subscribers can opt out of the AI features and not suffer the price increase, though.

Microsoft's Copilot AI is coming to your Office apps - and it won't come cheap

Microsoft 365 subscribers in Australia, New Zealand, and some Asian markets just got an AI upgrade, along with a huge price increase. How long until customers in the US and Europe see the same? Microsoft has begun expanding the reach of its Copilot feature set, bringing its AI capabilities to Office apps for anyone currently subscribed to Microsoft 365 Personal or Family. For customers in the US and Europe, those features are only available with an extremely pricey Copilot Pro subscription. For Personal and Family subscribers, the upgrade costs an extra $20 monthly, which is more than double the cost of the basic Microsoft 365 subscription. In the Southern Hemisphere, the company is making Copilot part of all Microsoft 365 Personal and Family subscriptions. According to an announcement I found last November, the change is effective for Microsoft 365 subscribers in Australia, New Zealand, Malaysia, Singapore, Taiwan, and Thailand; they also get access to the Microsoft Designer app for generating images. Over the past two months, current subscribers in those regions have been reporting that they got access to Copilot in their apps after they updated to the latest version. But with the start of the new year, Microsoft has started informing those customers that their subscription prices are about to rise substantially. One unhappy customer signed on to a Microsoft Community board to complain about the sudden and unexpected price hike: "I just got an email saying my family subscription is going from $129 a year to $179 a year. That's a big increase!" Yes, it is. And what do those subscribers get for those hefty extra fees? Sorry, but this isn't an all-you-can-AI deal. As the announcement explains, "Subscribers will receive a monthly allotment of AI credits to use Copilot in Word, Excel, PowerPoint, Outlook, OneNote, and Designer. The credits will also apply to apps like Paint, Photos, and Notepad on Windows." The option of a Copilot Pro subscription is available for subscribers who use more than the basic basket of credits. While the new features are free to current subscribers, the upgrade comes with two big gotchas. For Microsoft 365 Family subscribers, the added features are available only to the primary user and can't be shared with other members. And if the primary user doesn't want those features, they're nearly impossible to disable. Also: Your Windows 10 PC can't be upgraded? You have 5 options before support ends in 2025 On paper, this is a good deal for current subscribers. Or at least that's what Microsoft is hoping those subscribers will think after they've had a chance to give the Copilot features a test drive. The current $20-a-month Copilot Pro subscription is prohibitively expensive. The new package offers a reasonable chunk of AI credits for just over $4 a month. Such a bargain, right? But my quick survey of online forums suggests that very few customers are buying that math. And for those who neither want nor need those AI features, finding the alternative is a challenge. A Microsoft 365 Classic option is available, without the Copilot features, at prices that are similar to those in place before the AI-driven increase. But the only way to unlock that option is to try to cancel your current subscription. At that point, as Office-Watch discovered, Microsoft coughs up the lower-priced alternative. Meanwhile, in the rest of the world -- including the US and Western Europe -- the free Copilot features aren't available -- yet. But I expect it's only a matter of time before this change expands to additional markets. It's not unusual for Microsoft to try out new subscription offers on a regional basis before taking them to a worldwide market. That's exactly what this announcement looks like. Also: The best AI chatbots: ChatGPT, Copilot, and worthy alternatives Anyone who's paid attention to Satya Nadella's Microsoft in recent years knows that the company is all in on AI, so it would be odd if there were no plans to roll out a similar feature set to the Microsoft 365 subscription base worldwide. Starting in the APAC region gives the company time to gauge customer reaction and also continue scaling up the capacity of servers that power Copilot features. Based on the pricing in those test regions, pricing for customers in the US would probably increase by $50 -- from $69 to $119 for Personal plans and from $99 to $149 for Family subscriptions. Those data centers aren't going to pay for themselves. The expanded offering is still brand new, but Reddit users from the region have already weighed in with complaints. One asked, rhetorically, "I'm just meant to put up with unwanted bundleware that I never agreed to soaking up CPU cycles on my hardware ... because Microsoft needs to look like [its] AI spend is getting ROI to investors?" Also: Microsoft introduces 10 AI agents for sales, finance, supply chain in Dynamics 365 Another Reddit user, who's apparently a graduate student in Taiwan, called the new Copilot features a "nightmare," adding that it can't be turned off. "Doesn't Microsoft understand that Graduate/Phd students receive an automatic fail or are charged with academic misconduct for any hint of AI assistance in their writing?" In my testing of the Copilot Pro features in a Microsoft 365 in the Northern Hemisphere, I discovered that the option to turn off those prompts, which had been available in earlier releases, is no longer available. You can hide the AI panes above and to the right of the document, but the Copilot icon in the document itself is ever-present and can't be squelched. Last November, I asked Microsoft if the company has plans to introduce similar features in the US and other worldwide remarks. A spokesperson replied, "The company has rolled out changes in six markets to listen, learn, and improve. We don't have anything more to share today."

Microsoft raises price of consumer version of Microsoft 365 for first time in 12 years

Microsoft is adding artificial intelligence tools to its consumer Microsoft 365 bundle, and bumping up the price for the first time since introducing subscriptions 12 years ago. In a blog post on Thursday, Microsoft said it's bringing its Copilot assistant into the Word, Excel, PowerPoint, Outlook and OneNote applications for consumers who have the Microsoft 365 suite. The increase of $3 per month is meant "to reflect the extensive subscription benefits that we've added over the past 12 years and enable us to deliver new innovations for years to come," Bryan Rognier, vice president of Microsoft 365 Consumer, wrote in the post. Microsoft 365 Personal will now cost $9.99 per month and $99.99 per year, up from $6.99 per month and $69.99 per year. The Microsoft 365 Family plan, which serves up to six people, will cost $12.99 per month and $129.99 per year, up from $9.99 a month and $99.99 per year. Microsoft had 84.4 million consumer subscribers to Microsoft 365 in the September quarter, up 10%. Existing customers will see the new prices upon renewal, according to the blog post. Formerly known as Office 365, Microsoft 365 is important to the company's efforts to compete with Google's productivity tools in the consumer market. But sales to businesses are far more lucrative for Microsoft. Microsoft 365 commercial products and cloud services represented 31% of the company's fiscal third-quarter revenue, while Microsoft 365 consumer products and cloud services contributed under 3%. In 2022, Microsoft increased prices of commercial Microsoft 365 subscriptions for the first time. In addition to bringing Copilot into the Microsoft 365 applications, consumer subscribers will gain access to the Microsoft Designer image editing tool. Microsoft said that, for a limited time, existing subscribers can switch to plans without Copilot or AI credits. "These plans will continue to be maintained as they exist today, but for certain new innovations and features you'll need a Microsoft 365 Personal and Family subscription," the company said.

Home Microsoft 365 plans use Copilot AI features as pretext for a price hike

Microsoft has two announcements for subscribers to its Microsoft 365 Personal and Family plans today. First, you're getting the Copilot-powered AI features that Microsoft has been rolling out to businesses and Copilot Pro subscribers, like summarizing or generating text in Word, drafting slideshows in PowerPoint based on a handful of criteria, or analyzing data in Excel. Second, you'll be paying more for the privilege of using those features, to the tune of an extra $3 a month or $30 a year. This raises the price of a Microsoft 365 Personal subscription from $6.99 a month or $69.99 a year to $9.99 and $99.99; a family subscription goes from $9.99 a month or $99.99 a year to $12.99 a month or $129.99 a year. For current subscribers, these prices go into effect the next time your plan renews. Current subscribers are also being given an escape hatch "for a limited time." "Classic" Personal and Family plans at the old prices with no Copilot features included will still be offered, but you'll need to go to the "services & subscriptions" page of your Microsoft account and attempt to cancel your existing subscription to be offered the discounted pricing.

You Can Now Use AI With Microsoft 365 Office Apps -- for a Price

The reMarkable Paper Pro is the Best E Ink Tablet You Probably Won't Buy In the productivity space, the AI race is in full swing, with competitors Google and Microsoft rapidly adapting their offerings. The latest move comes from Microsoft, which is bundling its AI features tailored to Office apps into Microsoft 365 subscriptions. While it could mean a pricier plan, existing customers will have the ability to opt out of the upgrade. Microsoft 365 Subscriptions Will Now Harness the Powers of Copilot Microsoft first introduced its AI-powered tool, Copilot, to its Office apps in January 2024 by way of a $20/month Copilot Pro subscription. That plan not only included AI support in Word, PowerPoint, Excel, Outlook, and OneNote, but also provided early access to the latest GPT models and higher caps for image image generation. Now, Microsoft has restructured its subscriptions, bundling Copilot into Microsoft 365 productivity apps for only an additional $3/month. This means that if you currently pay for a Microsoft Personal or Family subscription, you'll soon gain Copilot capabilities and pay $3 more per month. The update is likely Microsoft's way of getting more users to use Copilot within Office apps, as $3 is a much easier pill to swallow than $20. This sentiment is reflected in Microsoft's blog announcement, positioning the bundle less as a pivot and more as a premeditated scheme, claiming the "plan has always been to make Copilot in the Microsoft 365 apps more accessible to a wider audience at a great price." While it will be cheaper than ever to add Copilot to your Office apps, it isn't a foregone conclusion if you'd rather not shell out for AI. According to Microsoft, existing subscribers "in most markets will automatically get access to Copilot in their apps once they update to the latest version," but you can also choose to remain on a "classic" plan, avoiding the price increase and accompanying Copilot features. New customers, however, will only be able to purchase subscriptions to Microsoft 365 with Copilot. Copilot Pro isn't obsolete now, either. The $20/month subscription will remain available to users who still want the additional bells and whistles, like premium access to the most up-to-date AI models and new Copilot features. What Kind of Features Can We Expect in Microsoft 365 With Copilot? The ways that Copilot can enhance your experience in Microsoft's Office apps look fairly similar to Google's Gemini integration with its Workspace apps, from email summaries to design support. One example that Microsoft provides is using Copilot to analyze and provide insights on a budget in Excel. Other ideas from Microsoft include: App Example of Copilot Use Word Generate a recipe or meal plan, considering dietary restrictions or preferences. PowerPoint Generate a slideshow, considering design notes and specified photos. Outlook Summarize long email threads. OneNote Generate a list of action items from a free-form note. Microsoft is also adding its Designer app to its Personal and Family plans, so subscribers will have access to Microsoft's image generation tool for projects ranging from wedding invitations to custom wallpaper. The fact that new Microsoft 365 customers will now only be able to purchase Copilot-inclusive subscriptions is a sign that AI is more or less an inevitability when it comes to productivity tools. It's a shift from AI being an optional add-on to a native feature -- whether we like it or not. That being said, AI regulations are ever-changing, which means that while we may not have a choice about paying for AI functionality, we will still have a choice about disabling these features.

Copilot is now coming to all Microsoft 365 users - but you'll pay a little more for the privilege

Users can now access Copilot across Word, Excel, Outlook and more Microsoft has revealed its Copilot AI offerings will now be available to more users across the world - but the launch will come at a slightly increased price. The company has announced Copilot, along with Microsoft Designer, is now part of Microsoft 365 subscription for Personal and Family tiers worldwide, bringing AI tools to millions more users. However the launch will mean an increase in subscription costs, with Microsoft 365 Personal and Family subscriptions in the US set to rise by $3. "Our plan has always been to make Copilot in the Microsoft 365 apps more accessible to a wider audience at a great price," Bryan Rognier, Vice President, Microsoft 365 Consumer, wrote in a blog post announcing the news. "These changes bring the transformative power of AI to the personal productivity tools that millions of people use every day." Microsoft believes the move will bring Copilot to "most of" its 84 million consumer subscribers for popular programs such as Word, Excel, PowerPoint, Outlook, and OneNote. It will also open up Microsoft Designer, the company's AI-powered image generator, which can be used for photo editing, logo creation, and more. The company says Microsoft 365 Personal and Family subscribers will receive a monthly allotment of AI credits to use Copilot in Word, Excel, PowerPoint, Outlook, and OneNote, which can also be used for Designer's AI image generation and editing. For those unsure about the price rises, Microsoft says existing subscribers with recurring billing enabled with Microsoft can switch to plans without Copilot or AI credits, such as its Basic plan, or for a limited time, chane to the new Personal Classic or Family Classic plans. The company had already recently announced a move to bring AI tools to all enterprise Microsoft 365 users with the launch of Copilot Chat, a secure AI chat service powered by GPT-4o which was an upgrade to the current free chat tool in its office software platform. It also comes shortly after Google announced its Gemini AI offering would also be rolling out to all tiers of its office software. The company revealed all Google Workspace tiers will now get access to Gemini for no extra cost, having previously had to spend more for an extra add-on - although some users will see their subscription costs rise as a result.

Microsoft testing 45 percent M365 price hikes in Asia

Won't say if other nations will be hit, but will 'listen, learn, and improve' as buyers react - so far with anger Microsoft has advised users of its M365 suite in six Asian nations that they face big price rises when they renew subscriptions, and says the hikes are needed to "ensure Microsoft customers are among the first to access powerful AI features in our apps". News of the price rises arrived in emails sent to subscribers last week. Your correspondent received one for an annual Microsoft 365 Family subscription that, when I next renew, will rise from AU$139.00 to AU$179 ($85.50 to $110) - just under 29 percent. The Register has also seen screenshots of emails sent to holders of M365 Personal subscriptions that will rise from AU$109.00 to AU$159 ($67to $98) or almost 46 percent. Microsoft's Australian web site lists $159 and $179 as the current price points for Personal and Family subscriptions. The price rises have been flagged in Australia, New Zealand, Malaysia, Singapore, Taiwan and Thailand. A Microsoft spokesperson sent us the following statement: We're also told that the price hikes aren't mandatory as subscribers can choose to sign up for a lesser version of M365 that does not include CoPilot. Microsoft did not answer our question about whether these price rises will be introduced elsewhere. It's also unclear if the price rises will come to corporate licenses. The spokesperson did say the purpose of the changes is to allow Microsoft a chance to "listen, learn, and improve". Making changes to prices or products in select countries is a common tactic vendors use to test customer reaction. The six nations chosen for this test are a good fit for such tests, as they enjoy different levels of prosperity and tech adoption. Reaction to the changes has not been positive. The Register has encountered plenty of online commentary accusing Microsoft of price gouging. Australian subscribers seem particularly piqued, as the high cost of living is a major issue down under. We also found plenty of that it is hard to find the offer to choose a subscription that avoids the price rise as it only appears when cancelling a subscription. The Register tried to do so and was offered dialogs reading "I don't want my subscription" and "I want to keep my benefits", and stopped the process at that point out of fear deleting family data could result from either. We also searched for "M365 Classic" after a Microsoft spokesperson told us "A Classic SKU" is the alternative to the higher prices, could find no details of such a package using both Microsoft's Bing search engine and Google. Microsoft recently promised to spend $80 billion on datacenters in 2025 alone, most of them to run AI applications. Someone's got to pay for that level of investment and these price rises in Asia suggest Microsoft customers will foot the bill. Or maybe not, given the reaction we've observed to these increases - plenty of which points out that many AI features in M365 are offered for free by other providers. ®

Microsoft to now include Copilot in Microsoft 365 for consumers

(Reuters) - Microsoft said on Thursday that it is now including Copilot AI features to its Microsoft 365 suite for individual consumers, a day after it rolled out on-demand AI agents for businesses. The Windows-maker will give its customers an option to either choose a Microsoft 365 subscription plan with Copilot AI features or one without it. It will also increase the prices of subscription plans in the U.S. by $3. Copilot will assist users in a host of apps in the Microsoft 365 suite -- Word, PowerPoint, Excel, Outlook, OneNote and Designer. However, the usage of Copilot AI will be capped by monthly credits, which it believes would suffice for most users. Microsoft will also give users the options to enable or disable Copilot where AI assistance is not desired -- such as in academic scenarios like exams and submissions. It also said the user-inputed prompts will not be used to train its models. The company has been under pressure to show that its big bet on AI, which includes investment in OpenAI and its plans to spend about $80 billion during its current fiscal year on data centers and AI infrastructure, will pay off. These moves also come at a time when observers have become skeptical about Copilot's usage. Last year, a Gartner report raised doubts about its adoption, which led Microsoft to push its uptake. (Reporting by Rishi Kant in Bengaluru; Editing by Shailesh Kuber)

Some customers are about to see a huge rise in their Microsoft 365 subscriptions

Six countries have seen rises so far, unconfirmed for the UK and the US Customers across six Asian and Australasian nations are having to contend with major price hikes to stay connected to their Microsoft 365 online services as the company struggles to identify the right pricing for its AI tools. Australia, New Zealand, Malaysia, Singapore, Taiwan and Thailand are now seeing hikes of up to 46% in their bills, according to a report from The Register., which notes customers from the six nations received emails last week notifying them of the significant changes. The company says charging more will "ensure Microsoft customers are among the first to access powerful AI features in our apps". Screenshots seen by The Register indicate Microsoft 365 Family subscriptions have increased from AU$139 to AU$179, with Personal subscribers set to pay AU$159, up from AU$109. That means a staggering 29% increase for Family members and an eyewatering 46% increase to Personal subscribers' bills. The company's website has since been updated to reflect the pricing - AU$159 or AU$16/month for Personal, and AU$179 or AU$18/month for Family. Pricing in other countries has not yet been affected - the two tiers still cost £59.99 and £79.99 in the UK. "These price changes reflect the extensive subscription benefits that Microsoft has added over the past 12 years including advanced security with Microsoft Defender, creative tools like Clipchamp, and countless enhancements to Word, Excel, PowerPoint, OneNote, and Outlook, in addition to new features such as Microsoft Copilot and Microsoft Designer," a Microsoft spokesperson stated. It's unclear whether more countries will be subjected to rising bills - TechRadar Pro has asked Microsoft to confirm, but we did not receive an immediate response. For comparison, Google One AI Premium with 2TB of cloud storage for up to six family members costs AU$32.99/month - even more than the AU$18/month that Microsoft wants to charge for its Family plan, which includes 6TB of storage for up to six family members. iCloud+ with 2TB of storage costs AU$14.99, or UA$44.99 for 6TB. It can be shared among up to six, but Apple Intelligence features are more limited and ship with the hardware, rather than a cloud storage subscription.