Microsoft 365 Changes and Recommendations
Bigger invoice.
Same tools you own twice.
Microsoft raised prices and folded new capabilities into the suites on July 1, 2026. Some of what you buy separately may now be redundant. Click the chalkboard to see the math.
The pricing changes
On December 4, 2025, Microsoft announced a global pricing and packaging update for most commercial Microsoft 365 plans. New prices took effect July 1, 2026. Commercial list prices, USD, per user per month, annual commitment:
| Plan (with Teams) | Old | New | Change |
|---|---|---|---|
| Microsoft 365 Business Basic | $6.00 | $7.00 | +16% |
| Microsoft 365 Business Standard | $12.50 | $14.00 | +12% |
| Microsoft 365 Business Premium | $22.00 | $22.00 | No change |
| Office 365 E1 | $10.00 | $10.00 | No change |
| Office 365 E3 | $23.00 | $26.00 | +13% |
| Office 365 E5 | $38.00 | $41.00 | +8% |
| Microsoft 365 E3 | $36.00 | $39.00 | +8% |
| Microsoft 365 E5 | $57.00 | $60.00 | +5% |
| Microsoft 365 F1 / F3 (frontline) | $2.25 / $8.00 | $3.00 / $10.00 | +33% / +25% |
Two details that work in your favor
- Existing agreements keep current pricing. New rates apply at your next renewal after July 1, 2026, not mid-term. You have time to plan.
- New capabilities arrive regardless of price. Feature additions roll out to all qualifying plans through summer 2026, whether you renewed at the old price or the new one.
Standalone Teams and standalone Copilot licenses are not affected. Nonprofit pricing moves proportionally with its fixed 60–75% discount. Government (GCC, GCC High, DoD) sees the same percentages, with increases over 10% phased over multiple years. Standalone components also changed, including Windows Enterprise per device (+31%) and Microsoft 365 Apps (+17%).
The packaging changes
Microsoft is folding capabilities into the suites that were previously separate purchases or unavailable at those tiers (rolling out June through August 2026). This is where redundancy, and savings, often hide.
URL time-of-click protection · Copilot Chat enhancements* · Copilot Chat Analytics
Microsoft Defender for Office 365 Plan 1 · Copilot Chat enhancements* · Copilot Chat Analytics
Copilot Chat enhancements* · Copilot Chat Analytics
Microsoft Defender for Office 365 Plan 1 · Intune Remote Help · Intune Advanced Analytics · Intune Plan 2 · Copilot Chat enhancements* & Analytics
All Microsoft 365 E3 additions, plus: Microsoft Security Copilot** · Intune Endpoint Privilege Management · Microsoft Cloud PKI · Intune Enterprise Application Management
F1 / F3: Copilot Chat enhancements* & Analytics. Business Basic / Standard: +50 GB mailbox storage, URL time-of-click protection, Copilot Chat enhancements* & Analytics. Business Premium: +50 GB mailbox storage, Copilot Chat enhancements* & Analytics.
Why it matters for security & email
Two additions reshape the security conversation. Because they are now bundled, some of your standalone spend may be doing work Microsoft now includes:
- Defender for Office 365 Plan 1 is now in E3. Anti-phishing, anti-malware, and safe-links protection ship natively, overlapping the pre-delivery filtering many still pay a traditional Secure Email Gateway (SEG) to do. The question: is that SEG line item still earning its keep, or are those dollars better spent on advanced, AI-driven email security that catches targeted and AI-powered attacks native filtering misses?
- Security Copilot is now in E5. A built-in entitlement with 400 security compute units per 1,000 paid licenses (up to 10,000/month). AI-driven investigation and triage that used to be a paid add-on is now part of the suite, a strong reason to model an E3→E5 move against add-ons you already buy.
*Copilot Chat enhancements include inbox and calendar awareness plus access to Word, Excel, and PowerPoint agents. **Security Copilot is subject to monthly capacity limits of 400 security compute units per 1,000 paid user licenses, up to 10,000 per month. Government tenants (GCC, GCC High, DoD) receive a subset of these additions on a separate timeline aligned to FedRAMP and data residency validation.
ONST recommendations
A price increase paired with a packaging change is not just a bigger invoice; it is a moment where your license mix, your add-on spend, and your third-party tooling may no longer line up with what you are actually getting. We recommend a structured review focused on three questions.
- What is your true renewal exposure? We model the new pricing against your actual seat counts and plan mix. Increases range from zero to 43% by SKU, so two organizations of the same size can see very different impacts. This also surfaces right-sizing: unused licenses, users on higher tiers than their role requires, and frontline roles that may fit a different plan.
- Where does new functionality overlap with existing investments? Capabilities moving into the base suites may overlap with add-ons or standalone tools you buy separately today, from Microsoft or third parties. An ONST licensing assessment identifies where functionality overlaps and may be eliminated to free up budget dollars.
- Recapture or reallocate freed budget dollars? If you can recapture budget by eliminating redundant tools, a cybersecurity posture review confirms the robustness of your environment, or identifies gaps and recommends next-gen solutions to improve your posture.
ONST Review
A no-cost licensing and gap analysis assessment for clients with Microsoft under ONST management. We model renewal exposure, map overlap with what you already own, and deliver a clear recommendation.
Posture Review
The natural next step where dollars can be recaptured. We confirm the robustness of your environment, identify gaps, and recommend next-gen solutions like advanced email security.
Schedule your ONST Review
Tell us about your environment and where you are with your Microsoft renewal. We'll come back with a straight answer, not a sales script.