Zhi Tong Cai Jing·2025-08-21 03:55Core Viewpoint - Microsoft plans to stop offering discounts on Microsoft 365 subscriptions and other cloud software products, potentially leading to price increases of 10% or more, as indicated by NexusTek executives [1][4]. Group 1: Pricing Changes and Financial Impact - UBS analysts believe that the pricing changes are likely already factored into Microsoft's recent performance guidance, but new subscription revenue is expected to be stronger, particularly with the anticipated growth of Microsoft 365 and "Copilot for Microsoft 365" subscriptions [1][2][8]. - The pricing changes will take effect on November 1 for new service agreements or renewals, targeting large companies with sufficient employees [3][4]. - Microsoft aims to provide more consistent and transparent pricing, which aligns with its Azure cloud service pricing model [3][4]. Group 2: Market Reactions and Stock Performance - Following the announcement of potential price increases, Microsoft's stock price rose over 6%, contributing to a market capitalization of $4 trillion, making it the second company to reach this milestone after Nvidia [3][4]. - Microsoft's stock has increased by 20% this year, outperforming the Nasdaq 100 index, which rose approximately 10% [6]. Group 3: Subscription and Product Details - Microsoft 365 includes a suite of cloud applications and services, such as Word, Excel, PowerPoint, and Outlook, with various subscription tiers offering additional features [7][9]. - The "Copilot for Microsoft 365" feature is not included by default in subscriptions and requires separate purchase, while "Copilot Chat" is available for free with qualifying subscriptions but offers different capabilities [8][9]. Group 4: Customer Sentiment and Market Dynamics - Many customers are expected to accept the price increases to continue using Microsoft's unique applications rather than switching to less popular alternatives [5]. - Some customers may seek to purchase through other cloud distributors to mitigate costs as discounts are phased out [5].