On December 4, Microsoft announced a global revision to the pricing and packaging of various Microsoft 365 subscriptions for business customers. The changes, known as the Microsoft 365 Pricing and Packaging Updates 2026, impact commercial, non-profit, and government organizations. The new pricing will take effect on July 1, 2026, with the rollout of new features phased in between June and August 2026.

Existing customers will retain their current rates until their contract renewal, and Microsoft will notify them of new feature availability at least 30 days in advance via the Message Center. These updates include Enterprise, Business, and Frontline suites, as well as standalone components. Individual Microsoft Teams and Copilot SKUs are not included in these price changes.

Timing and scope of the changes

The pricing changes apply worldwide and also include the government version of Microsoft 365 subscriptions. The new packaging functionality is being rolled out gradually, making additional security, management, and AI features a permanent part of the base licenses. For organizations, this means reassessing both costs and functionality when planning contract renewals and license usage.

Commercial price changes effective July 1, 2026 (USD)

Below you'll find the US list prices. Local prices and currencies may vary.

Enterprise Suites – with Teams

Within the Enterprise line, the increases are moderate. Office 365 E1 remains unchanged.

Enterprise Suites – without Teams

The variants without Teams have relatively higher percentage increases, which can influence organizations when choosing licenses.

Frontline Suites

Frontline subscriptions for employees without a fixed workplace have the highest increases.

With Teams

Without Teams

For Frontline F1 subscriptions, the increase is significant, both for variants with and without Teams.

Business Suites

Within the Business segment, the increases are more modest.

With Teams

Business Premium remains priced unchanged.

Without Teams

 Standalone components

Individual products within Microsoft 365 are also being adapted, particularly for security and device management.

Windows Enterprise per device has the largest increase at 31%.

New features and packaging updates

In addition to price adjustments, several additional features will be added as standard. The rollout will begin in June 2026 and be completed by early August.

Enterprise licenses get additional security and management features, including Microsoft Defender for Office 365 Plan 1, Intune Remote Help, Intune Advanced Analytics, Intune Plan 2, Microsoft Cloud PKI, and for E5, Microsoft Security Copilot.

Business subscriptions will receive 50 GB of email storage, URL time-of-click protection, and improvements to Copilot Chat, including analytics. Frontline licenses will receive similar Copilot updates. Standalone products like Windows E3 will gain Quick Machine Recovery and post-quantum security APIs, and EMS licenses will be expanded with Intune functionality.

 Nonprofit updates

Nonprofit pricing remains linked to commercial rates through a fixed discount of 60-75%. Increases follow the same proportional increases as for commercial subscriptions. Business Basic remains free for nonprofits.

Government updates

Government licenses will be adjusted in line with commercial increases. Microsoft 365 E3 G3 variants will increase by 8%, E5 G5 variants by 5%, and Office 365 E3 Government by 13%. Increases above 10% will be phased in according to federal regulations. New features will be rolled out based on compliance requirements such as FedRAMP and data residency standards.

Advice and support

At BeSharp Experts, we offer independent advice and support on Microsoft licensing. Through license optimization and contract negotiations, we help organizations minimize or even eliminate the impact of price increases. This allows your organization to maintain cost control and maximize the use of Microsoft 365, even during periods of price fluctuations.

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The Microsoft 365 updates for 2026 combine pricing adjustments with expanded security, management, and AI functionality. Organizations are advised to evaluate license usage and contract terms well before July 1, 2026, so they can optimally anticipate these changes both financially and strategically.

Source: Microsoft 365 Pricing and Packaging Updates | Microsoft Licensing Resources