Microsoft recently announced new capabilities across Microsoft 365, along with a confirmed pricing update that will take effect on July 1, 2026. These changes impact how organizations plan budgets, evaluate renewal timelines, and assess whether their current licensing mix remains suitable for their needs.
This article outlines what’s changing, highlights the new value added to key Microsoft 365 plans, and gives leaders a clear path for preparing ahead of upcoming renewals.
New Features Coming to Microsoft 365
Microsoft is introducing a series of updates that enhance the value of several Microsoft 365 plans, providing both business leaders and IT teams with new tools that support productivity, security, and operational efficiency.
AI and Productivity Enhancements
Microsoft is expanding AI throughout the Microsoft 365 experience.
- Copilot Chat will appear inside Microsoft 365 apps such as Word, Excel, PowerPoint, Loop, and Outlook.
- Agent-powered experiences will guide users through tasks like document creation, analysis, and content refinement.
- A unified chat interface will bring prompts, conversations, and task guidance into a single experience across multiple apps.
These additions give teams faster ways to create content, analyze information, and manage communication, and they also reduce manual workload for IT by bringing more intelligence directly into core applications that they use every day.
Security Improvements
Microsoft is expanding built-in security across Microsoft 365 by adding stronger email protection, URL scanning, and new advanced threat-prevention features to a wider range of plans. In the official Microsoft announcement, the company confirms the following updates:
- Office 365 E3 and Microsoft 365 E3 will now include Microsoft Defender for Office 365 Plan 1. This enhances protection against phishing, malware, and malicious links across email and Microsoft Teams, giving more organizations access to advanced threat detection without purchasing a separate Defender for Office 365 license.
- URL checks in Outlook and Office apps will now be included in Office 365 E1, Business Basic, and Business Standard. This adds another layer of protection for smaller organizations and frontline users who often operate with limited security resources.
These changes raise the security baseline across Business and Enterprise plans.
They help smaller organizations reduce the number of threats that reach users and help mid-market and enterprise teams detect attacks earlier across email and collaboration tools.
Device and Endpoint Management Enhancements
Microsoft is expanding endpoint management features for both Microsoft 365 E3 and Microsoft 365 E5.
- Microsoft 365 E3 and Microsoft 365 E5 will include Intune Plan 2, including Remote Help and Advanced Analytics. Remote Help lets IT securely view or take control of a user device during a support session, which shortens resolution times. Advanced Analytics gives visibility into device health and performance trends.
- Microsoft 365 E5 will also include Intune Endpoint Privilege Management, Enterprise App Management, and Microsoft Cloud PKI. Endpoint Privilege Management limits local admin use to reduce risk. Enterprise App Management helps IT deploy and update applications in a more controlled way. Cloud PKI provides a cloud-based certificate service that supports secure identity and device trust.
Together, these updates give E3 customers stronger support and monitoring tools, while E5 customers gain a fuller set of controls for how devices are configured, accessed, and trusted.
Integrated Security Copilot Features
Microsoft is bringing AI-powered security features directly into the tools security teams use most.
- Security Copilot agents will operate inside Defender, Intune, Entra, and Purview for E5 customers.
- These agents will help IT teams investigate threats, assess risks, review device states, and enforce policy.
These integrations enhance the E5 experience by bringing more guidance and context into the core security tools, which helps teams handle issues with less manual effort.
Microsoft 365 Licensing Price Changes in 2026
Microsoft has confirmed that commercial pricing for Microsoft 365 will increase on July 1, 2026. This update applies to both Business and Enterprise plans.
Why Microsoft is Changing the Prices of Commercial Licenses
Microsoft points to several factors behind the upcoming price adjustment:
- The platform now includes expanded AI capabilities, including Copilot Chat and new agent-powered experiences.
- Security baselines are increasing across multiple plans.
- Endpoint management tools, such as Intune enhancements, are being added to E3 and E5.
These additions increase the value included in the core subscriptions and reshape what customers receive at each tier.
Recommended Actions to Prepare for the 2026 Microsoft 365 Price Change
A clear set of steps can help organizations stay ahead of the July 2026 pricing update. The list below outlines practical actions that support budgeting and long-term decision making.
- Map your renewal date and assess timing.
Knowing when your agreement renews can help you plan for when the price change will take effect and whether adjusting your renewal timeline makes sense. - Conduct a license audit across your tenant.
A full audit gives you a current view of which licenses are assigned, which are unused, and where mismatches may exist between user needs and subscription levels. - Review whether your current SKUs still fit user needs.
The new capabilities may make some plans more valuable for certain roles. Others may still be overlicensed. A review can help right-size subscriptions before the update. - Outline a 12-month budget scenario for the expected increase.
Even without final pricing, a conservative estimate helps leaders understand the likely impact on operating expenses and forecast accordingly. - Meet with a licensing partner to model impact and opportunities.
Working with a partner can help you compare scenarios, understand plan-level changes, and identify where adjustments could offset increased costs. We happen to know a pretty good one.
FAQ: Microsoft 365 Pricing Changes in 2026
The updated commercial list prices for Microsoft 365 will take effect on July 1, 2026.
Microsoft 365 Business and Office 365 suites
- Business Basic: from $6 to $7 per user/month
- Business Standard: from $12.50 to $14 per user/month
- Business Premium: stays at $22 per user/month
- Office 365 E1: stays at $10 per user/month
- Office 365 E3: from $23 to $26 per user/month
Microsoft 365 Enterprise and Frontline suites
- Microsoft 365 E3: from $36 to $39 per user/month
- Microsoft 365 E5: from $57 to $60 per user/month
- Microsoft 365 F1: from $2.25 to $3 per user/month
- Microsoft 365 F3: from $8 to $10 per user/month
Local currency pricing will follow Microsoft’s standard regional adjustments.
The pricing update is tied to a broader set of additions to Microsoft 365. For E3 and E5 customers, Microsoft is:
- Expanding AI experiences such as Copilot Chat and agent-powered workflows
- Adding more advanced email and URL protection
- Including Intune Remote Help and Advanced Analytics with E3 and E5
- Embedding Security Copilot agents into tools like Defender, Intune, Entra, and Purview for E5
These changes increase the amount of security, management, and AI capability included in the base E3 and E5 subscriptions.
Key steps include:
- Reviewing renewal dates so you know when the new pricing will affect your environment
- Auditing licenses to remove unused seats and correct misaligned assignments
- Checking whether your current mix of licenses still fits how people work today
- Modeling the impact of the new list prices on your yearly budget
- Working with a Microsoft partner, such as Apex Digital, to explore scenarios that may offset part of the increase through better license alignment
These actions help organizations approach the 2026 pricing change with a clear view of cost, value, and options instead of reacting at renewal time.
The new pricing applies at your next renewal after July 1, 2026. Current agreements stay at their existing rate until they renew. Any new subscriptions purchased after July 1 will use the updated pricing.
Yes. Nonprofit pricing will adjust based on the same percentage changes as commercial plans.
Some AI features are now included in Microsoft 365, such as Microsoft 365 Copilot Chat in supported apps. More advanced Copilot capabilities, including broader reasoning models and workflow automation features, still require a separate Copilot license. Security Copilot features tied to E5 are included in that plan.
Early renewal can lock in current pricing for the length of your new term, so some organizations may choose this if their renewal window allows it. The right decision depends on agreement type, renewal rules, and internal budget timing. It is worth reviewing your renewal date and checking whether adjusting the term provides meaningful savings.
Hybrid and frontline teams benefit from stronger security protections and clearer guidance inside apps, which reduces interruptions and lowers the chance of user-driven incidents. The updates also improve device support and management, which helps IT teams maintain stability across a distributed workforce.
Teams licensing itself is not changing as part of the 2026 price update. The changes focus on Microsoft 365 plans rather than Teams as a standalone service. Teams Phone and other Teams add-ons follow their own pricing structure, so organizations using those workloads should review them separately when planning for 2026.
