Microsoft hiked the price of one of its most important products to make an extra $50 billion in revenue

Microsoft has introduced a new top-end tier version of Office 365 — named Office 365 Enterprise E5 — that costs $35 (£25) per month (or $420/£280 per year) per user. This is up from the $22 (£15) per month that the outgoing version, called E4, costs.

The company is retiring E4 in June 2016 meaning that anyone who wants the high-end version of Office 365 will have to pay $13 (£8) more for the service.

Microsoft has been open about how it is looking to leverage Office as a money spinner, and increasing the cost of the service is one way to do this.

“With E5, we have expanded our market opportunity for Office 365 by more than $50 billion (£34 billion),” said Microsoft CEO Satya Nadella.

“There is additional ‘yield opportunity,’ in our language, to add lifetime value here, in addition to adding users,” said Amy Hood, Microsoft’s chief financial officer. Hood defined “yield” as “selling more things on top of an installed unit.”

“I really think that Microsoft is just rebranding E4 because [it] wasn’t successful,” said Daryl Ullman of Emerset Consulting Group, a firm that specialises in negotiating software deals.

It’s unclear how businesses that rely on Office 365 will react to the price hike which will see them $13 poorer per user every month. Microsoft does offer discount bundles for multiple users, but the price will likely still be higher overall.

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