Telstra mulls Office 365 price drop

Australian Office 365 users face a wait of at least six weeks for price drops to the productivity cloud offering after changes in the United States overnight.

New and renewing US users will immediately receive price drops of between US$1 and US$5 a user a month depending on the product tier.

Users of the highest tier ‘E4’ service, which provides an on-premises Lync server and desktop Office licenses, face the biggest drop from $US27 per user, per month to $US22.

A Microsoft Australia spokeswoman said local users who had purchased Office 365 licenses directly through the software giant would see the price drops from May 1.

Local schools and students would also receive the ‘A2’ Office 365 product tier for free, providing access to more productivity software.

However, primary local supplier Telstra has not confirmed when the drops will come into effect for its version of the service, marketed under the T-Suite brand and served out of Microsoft’s Singapore data centre.

A Telstra spokesman told iTnews the telco was reviewing the price changes and would “look to adjust Office 365 pricing in the near future” but did not commit to a timeframe.

Telstra has maintained a significant price premium of between 40 and 76 percent for local users over the US version of the service since its initial launch last June.

Until price changes occur at Telstra, Australian Office 365 users face the prospect of paying more than double the US pricing for the same service despite a strong local dollar.

Pricing for the basic ‘P1’ service will remain the same at A$7.90 - compared to US$6 per user in the US.

But drops on all four ‘E’ levels mean Australian users will continue to pay A$15.70 a user a month for live support and Active Directory compatibility, compared to the newly dropped US$8 per user abroad.

Similarly, the new US pricing means a 100.5 percent premium for the Australian ‘E3’ service, at A$40.10 a user a month here compared to US$20 internationally.

Microsoft Office product development vice-president Kirk Koenigsbauer attributed the US price drops to increasing efficiencies from providing the service to more users, in 64 countries.

“This is the beauty of the cloud where we can deliver economies of scale through our worldwide data centers and economies of skill with our engineers, administrators, and support teams operating the service,” he said in a Microsoft blog post announcing the changes.

“With these efficiencies, we're able pass on savings to make it even more affordable for customers of all sizes to move to Office 365."