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The Microsoft Cloud Licenses All Subscription and
Billing Plans with their
Advantages and Disadvantages

When buying cloud licenses from Microsoft, you must choose a subscription plan and a billing plan. Find out which combinations of subscription and billing plans are possible - and what advantages and disadvantages there are with the respective plans.

Subscription Plans for Microsoft Cloud Licenses

Microsoft offers the following subscription plans for almost all of its cloud licenses:

  • 1 month (monthly subscription)
  • 1 year (annual subscription)
  • 3 years (triennial subscription)

Billing Plans for Microsoft Cloud Licenses

Microsoft offers the following billing plans for its cloud licenses:

  • 1 month (monthly payment)
  • 1 year (annual payment)
  • 3 years (triennial payment)

Which Combinations of Subscription and Billing Plans are not possible?

Let’s start with the possible combinations of subscription and billing plans that are not available for Microsoft Cloud licenses.

Subscription Plan Billing Plan Note
❌ 1 month 1 year A monthly subscription, which can therefore be canceled monthly, with annual billing does not exist.
❌ 1 month 3 years A monthly subscription, which can therefore be canceled monthly, with a triennial billing does not exist.
❌ 1 month 3 years There is no annual subscription, which can therefore be canceled annually, with a triennial billing.

The rule is as follows: the subscription plan must not be “smaller” than the selected billing plan.

These Combinations of Subscription and Billing Plans are possible

The following combinations of subscription and billing plans are possible with Microsoft Cloud licenses:

Subscription Plan Billing Plan
✅ 1 month 1 month
✅ 1 year 1 month
✅ 1 year 1 year
✅ 3 years 1 month
✅ 3 years 1 year
✅ 3 years 3 years

Advantages and Disadvantages of Subscription Plans

Every subscription plan for Microsoft Cloud licenses has advantages and disadvantages:

Subscription Plan Price Price Guarantee Flexibility
1 month ❌ Pricey ❌ No ✅ Monthly reduction of licenses possible
1 year ✅ Cheaper than “1 month” ✅ Yes, for 1 year ⚠️ Only annual reduction of licenses possible
3 years ✅ Cheaper than “1 month”,
⚠️ but not cheaper than “1 year”		 ✅✅ Yes, for 3 years ⚠️⚠️ Reduction of licenses only possible every 3 years

Advantages and Disadvantages of Billing Plans

Every billing plan for Microsoft Cloud licenses has advantages and disadvantages:

Billing Plan Liquidity Administrative Expenses
1 month ✅ Liquidity-friendly ⚠️ Monthly invoicing
1 year ⚠️ Liquidity burden ✅ Annual invoicing
3 years ⚠️⚠️ High liquidity burden ✅✅ Triennial invoicing

Examples

Which plans are most favorable for you and which combination is most suitable depends on how well your company has already established itself in the market and how constant your employee base is. To help you decide, we have three simple calculation examples for you.

Company A: a small Start-up that has just been founded

Subscription Plan Billing Plan License Quantity Price per User per Month
1 year 1 month Microsoft 365 Business Basic 2 Licenses € 5.88
1 year 1 month Dynamics 365 Business Central Essentials 2 Licenses € 68.78
1 month 1 month Microsoft 365 Business Basic 1 License € 6.72
1 month 1 month Dynamics 365 Business Central Essentials 1 License € 78.60

For the start-up, it is fundamentally important that the whole thing is liquidity-friendly, which is why all subscriptions have a monthly billing plan.

The two CEOs and founders plan for the long term, which is why the annual subscription plan was chosen for them. With the annual subscription, the license costs are slightly lower.

For the first employee of the start-up, it is not yet clear whether this position can be held in the long term. For this reason, a monthly subscription was deliberately chosen here, as this can be canceled on a monthly basis. However, this subscription is somewhat more expensive.

Company B: an established Company in the Market with Seasonal Fluctuations in the Number of Employees

Subscription Plan Billing Plan License Quantity Price per User per Month
1 year 1 year Microsoft 365 Business Basic 20 Licenses € 5.60
1 year 1 year Dynamics 365 Business Central Essentials 20 Licenses € 65.50
1 month 1 month Microsoft 365 Business Basic 5 Licenses € 6.72
1 month 1 month Dynamics 365 Business Central Essentials 5 Licenses € 78.60

Annual subscriptions are bought for the 20 permanent employees, so that the majority of employees can order the low-cost licenses. An annual billing plan was also chosen here to minimize the administrative effort.

Monthly subscriptions are bought for five seasonal employees. Although these are somewhat more expensive, they can be canceled after a short time.

Company C: an established Company in the Market with a very fixed Employee Base

Subscription Plan Billing Plan License Quantity Price per User per Month
1 years 1 year Microsoft 365 Business Basic 50 Licenses € 5.60
3 years 1 year Dynamics 365 Business Central Essentials 50 Licenses € 65.50

For all employees, the maximum subscription term is used to achieve the lowest price and to benefit from the price guarantee for as long as possible.

Unsure which License best suits your Company?

If you are still unsure which subscription and billing plans are best suited to your company or are considering a combination of different plans, we will be happy to help you make a decision.