Microsoft’s (NASDAQ:MSFT) share price closed at a record high Monday (August 23) after the technology giant raised the price of its Office 365 productivity software subscription for businesses.
Shares closed at $304.65 U.S., giving the company a market capitalization of $2.3 trillion U.S. Microsoft shares are now up 37% for the year, outpacing most of its large technology rivals.
Analysts said the price increase for Office 365 has the potential to boost revenue for a foundational part of Microsoft, along with profits.
Commercial subscriptions to Office 365 represented about 18% of Microsoft’s revenue in the fiscal year that ended on June 30.
The price for one type of subscription, the premium Office 365 E5, is increasing by 9% per user per month starting on March 1, 2022, while the cost of the more affordable Office 365 E1 will go up by 25%.
The impact won’t just hit the Office line of products. The cost of Microsoft 365 E3, whose price will go up 13%, includes Windows as well as Enterprise Mobility and Security features. More revenue coming from that subscription means more money for the highly profitable Windows business segment, along with the per-user portion of the fast-growing Azure cloud business.