Microsoft to a Launch Consumer Subscription Bundle?



According to ZDNet, Microsoft (MSFT) could launch its consumer subscription bundle, called Microsoft 365 Life, next spring. The launch could occur during the company’s Build conference or its Surface event.

The tech giant hasn’t ever directly mentioned the consumer bundle officially. However, Rajesh Jha, the company’s EVP of Experiences & Devices, dropped a hint at the Credit Suisse Annual Technology, Media & Telecom Conference last week. According to ZDNet, he said, “Microsoft has been positioning M365 as ‘the world’s productivity cloud’.” He continued, “We want to bring the same vision to consumers, also.”

Article continues below advertisement

Microsoft might drop Windows 10, gaming from M365 Life

Currently, Microsoft 365 focuses on enterprises and includes Windows 10, Office 365, and Enterprise Mobility and Security. Teams, its workplace app, is already a part of Office 365. The company offers multiple versions of M365 for businesses as well as clients from the education field.

However, the tech titan now wants to launch a consumer-oriented version of this package, noted ZDNet. The report added that for Microsoft 365 Life, the company would rebrand its Office 365 Personal and Home Products. However, the company plans to market these as consumer-focused and not just core productivity–oriented products.

The company also plans to add specific features especially for consumers such as Password Manager. Microsoft could also integrate Teams for Life into the M365 consumer subscription.

In June, TheVerge reported, “Dubbed Microsoft Teams ‘for life, it’s designed as an extension of Microsoft’s chat app for friends and family. Microsoft is experimenting with features like sending location, shared family calendars, and document sharing.”

In December 2018, ZDNet also hinted at the possibility of Microsoft including Cortana in its consumer subscription bundle. ZDNet noted that it didn’t appear that games would be included in the subscription. Also, Windows 10 most likely won’t be a part of the package, as consumers would already have it installed on their PCs.

Article continues below advertisement

Bundling would garner more revenue per user

The M365 Life subscription would be under the domain of Modern Life and Devices. Currently, there aren’t many details available about the other services that Microsoft 365 would include. With respect to pricing, ZDNet indicated that the subscription plans would be the same as the Office 365 consumer subscription bundles.

Microsoft has tasted success with the Enterprise version of its Microsoft 365 bundle and wants to replicate it. With its consumer bundle in 2020, the tech giant would make another big move to lock customers into its ecosystem. Once a consumer uses a package, it becomes difficult to switch.

The higher cost of switching also results in a lower churn rate for the company. According to ZDNet, Jha said, “Microsoft is seeing customers who buy into its M365 vision are generating higher revenue per user and experiencing less churn than customers who don’t.”

In the company’s earnings call for the first quarter of fiscal 2020, CFO Amy Hood said, “Microsoft 365 drove new customer adoption, as well as expansion in our existing customer base, given the strong value Office 365, Windows 10, and Enterprise Mobility + Security provide as a secure intelligence solution.”

Article continues below advertisement

Microsoft to rebrand Dynamics 365 Talent

In another development, Microsoft announced that it might discontinue its Dynamics 365 Talent Attract and Talent Onboard apps in February 2022. Instead, the company recommends that clients migrate to the LinkedIn Talent Hub. Microsoft acquired LinkedIn in 2016.

By advising clients to use LinkedIn Talent Hub, the company wants to leverage its LinkedIn assets. In its Q3 earnings report, LinkedIn revenue climbed 25% YoY (year-over-year).

In February 2020, Microsoft plans to launch Dynamics 365 Human Resources, its operational HR solution. The company intends to rebrand Dynamics 365 Talent as Dynamics 365 Human Resources. The main idea of rebranding is to turn the focus toward holistic human resource management and not just on hiring.

Will rebranding and bundling yield results?

Office 365, LinkedIn, and Dynamics products are all part of Microsoft’s Productivity and Business Processes segment. This segment posted an overall 13% YoY growth in revenue to $11.1 billion. Among the pack, Office 365 and Dynamics 365 performed particularly well. Dynamics 365 reported a 44% YoY surge in revenue in the first quarter. Meanwhile, the number of Office 365 Consumer subscribers increased to 35.6 million this quarter.

Will rebranding and bundling of its services boost consumer loyalty to the Microsoft ecosystem? We’ll keep an eye on this trend, so be sure to check back.


More From Market Realist