Microsoft is making a significant change to its consumer Microsoft 365 offering by integrating artificial intelligence (AI) capabilities and raising prices for the first time in 12 years. The company's Copilot AI assistant will be integrated into Word, Excel, PowerPoint, Outlook, and OneNote, enhancing productivity and user experience.
Microsoft is integrating artificial intelligence tools into its consumer Microsoft 365 package and raising prices in the United States for the first time since subscriptions were introduced twelve years ago. Announced on Thursday, Microsoft stated that its Copilot AI assistant will be incorporated into Word, Excel, PowerPoint, Outlook, and OneNote applications for consumers utilizing the Microsoft 365 suite.
The price increase of $3 per month is intended 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 announcement. 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 caters to up to six individuals, will cost $12.99 per month and $129.99 per year, an increase from $9.99 per month and $99.99 per year. Existing customers will observe the new prices upon renewal, according to the blog post. While Microsoft faces competition from Google's productivity tools in the consumer market, business sales are significantly more profitable for Microsoft. Microsoft 365 commercial products and cloud services accounted for 31% of the company's fiscal third-quarter revenue, whereas Microsoft 365 consumer products and cloud services contributed less than 3%. In 2022, Microsoft reported that its commercial cloud services, including Microsoft 365, generated $31 billion in revenue, while its consumer cloud services brought in just over $1 billion. In addition to integrating Copilot into Microsoft 365 applications, consumer subscribers will gain access to Microsoft Designer, an AI-powered image editing tool. Microsoft stated that, for a limited time, existing subscribers can switch to plans without Copilot or other AI features. '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 clarified
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