Microsoft 365 Pricing Update: What’s Changing and How to Prepare Before July 2026

Last week, Microsoft announced major updates to Microsoft 365, e.g. Endpoint management (Intune Services) and security capabilities (Defender for Office 365, Plan 1) that will reshape the way businesses and organizations consume productivity and security tools. These updates bring advanced AI capabilities, improve security, and streamline management capabilities. In addition, price changes of up to 33% from July 1, 2026 have been announced in the same breath SoftwareOne can help you optimally meet these changes.

What are the price changes?

The price changes apply to all contracts concluded after 1 July. Companies can therefore act in a planned manner. For example, you can renew your contracts early so that you can postpone the price change and take advantage of some new features at an early stage.

Further details from Microsoft are still expected as to which customer groups (education, public sector, non-profit) are explicitly affected and to what extent.    

Microsoft is changing prices in several plans:

• Business Plans
  • Business Basic → $7/user/month(↑16.7%)
  • Business Standard → $14/user/month(↑12%)
• Enterprise Plans
  • Microsoft 365 E3 → $39/user/month(↑8.3%)
  • Microsoft 365 E5 → $60/user/month(↑5.3%)
• Frontline Plans
  • Microsoft 365 F1 → $3/user/month(↑33%)
  • Microsoft 365 F3 → $10/user/month(↑25%)

Copilot Add-on: Still $30/user/month, not included in base plans.

Frontline plans: The Biggest Adjustment at Current List Price

Frontline plans—popular in retail, manufacturing, and healthcare — are seeing the strongest growth (up to 33%). This will have a number of implications. 

Feature Enhancements in M365 Apps: The Integration of Copilot

Copilot is now embedded across Word, Excel, PowerPoint, Outlook, and Teams.

1. In Word and PowerPoint: Generate first drafts, summarize documents, and create presentations in minutes.
2. In Excel: Analyze data, create formulas, and create charts without manual effort.
3. In Outlook: Draft emails, merge long threads, and manage your inbox faster.
4. In Teams: Instantly turn meeting transcripts into action items and summaries.

These features save time and reduce repetitive tasks. AI is thus becoming a central part of daily workflows. From creating proposals and analyzing data to budget forecasting and helping with meeting preparation. And with Copilot Chat, which adds pay-as-you-go agents that give users quick access to answers and make them more efficient.

Security Copilot accelerates incident analysis, connects data across Microsoft security tools for full risk context, and recommends or automates response actions while enabling proactive threat tracking; while the Copilot Control System centralizes policy management, enforces compliance, customizes experiences, and provides analytics and audit trails for visibility and control. 

Outlook and Office apps now include URL checks for Business Basic and Standard, and Business Basic, Standard, and Premium plans get an additional 50 GB of email storage for a total of 100 GB.

Exchange rate adjustment for Microsoft Commercial Cloud Services pricing

What do these changes mean for you?

Even though seven months still seem a while away, July 2026 will be here before you know it. The effects of higher license costs should therefore be taken into account now. Other considerations such as deciding which plans and add-ons make sense, as well as what plans you need to make for AI adoptions and security upgrades, should be taken into account early on in the renewal process.

We recommend taking the following steps as soon as possible:

• Review your current Microsoft licenses and actual usage across your organization
  Compare which licenses you own and which ones are actively in use. Identify underused licenses and ensure your permissions align with business needs and growth plans. 
• Evaluate Copilot adoption and ROI
  Analyze where Copilot is already delivering value, where there is a need for further enablement, and how broader adoption could improve productivity, security levels, or operational efficiency. 
• Plan your cost optimization efforts now
  Develop a proactive budget model that takes into account upcoming price changes, examines opportunities for plan optimization, and uses automation and governance to make the most of spending.
• Take action early

If you reach an agreement on terms, product mix and quantities early on, there may be a chance to maintain the same renewal and payment dates. Alternatively, you can also consider an early extension and have the residual value of your existing contract credited on a pro rata basis. 

Ultimately, it is a matter of working with SoftwareOne, your Microsoft Licensing Services Partner, at an early stage to run through different scenarios and their effects. This is the only way you can make a well-founded decision about what makes sense and is feasible for your organization.