Microsoft is adjusting the prices of many Microsoft 365 and Office 365 plans effective of July 1st, 2026. The increases ranges from approximately +5% to +43% and affects Enterprise, Business, and Frontline suites as well as numerous individual products. Existing customers retain their current pricing until contract renewal. Anyone renewing after the deadline will automatically pay the new rates.
Variants without Microsoft Teams are increasing proportionally more than Teams-inclusive packages. At the same time, several individual products are rising sharply, often without accompanying feature improvements (examples from the announcement: M365 Apps per User/Device +17%, Apps for Business +21%, Entra Plan 1 +16%, Entra Plan 2 +11%, Windows E5 +9%). Some SKUs (e.g., EMS E3, Windows E3, Windows Enterprise per Device) have been announced with new features, but the +31% increase for Windows Enterprise per Device in particular is striking.
· Making bundles more attractive: Higher markups on no-Teams variants and individual products create incentives to switch to more comprehensive suites that include Teams.
· Simplifying sales and lifecycle management: Larger suites make upselling, billing, and customer retention easier.
· Margin protection and standardization: Some increases serve margin protection and product policy purposes, not feature expansion.
Companies with many individual SKUs or with renewal dates after July 1st risk significant additional costs. At the same time, pressure is increasing to evaluate bundles, consolidate license landscapes, and actively manage renewals.
· Check your contract date: Contracts ending after the 1st of July are subject to the new prices.
· Conduct a portfolio analysis: Identify usage, overlaps, and savings potential (often 15–30%).
· Run scenario calculations: Compare costs of suites vs. individual products over the contract term, including migration effort.
· Reduce demand: Downgrade or cancel unnecessary licenses.
· Explore price lock-in: Early renewal can secure current prices. Check terms carefully (commitment period varies by contract/negotiation).
· Leverage contract clauses: Explore EA/partner conditions, discounts, and adjustment clauses.
· Only consider alternatives when genuinely beneficial: Switching to other vendors only makes sense with a clear functional and financial advantage.
Yes, if your renewal falls after July 1st, you are using many individual SKUs, your budget is tight and your license landscape is fragmented. In these cases, measurable additional costs are likely if you don't act.
1. An experienced Microsoft partner can accelerate the process and improve your negotiating position. Typical services include:
2. Portfolio scan to identify unused online services and savings potential.
3. Scenario and cost models: concrete comparisons between suites and individual products, including investment planning.
4. Renewal and negotiation support: preparation argumentation, and guidance in discussions withMicrosoft/resellers.
5. Contract review: evaluating EA/partner special conditions, price lock-in options, and legal risks.
6. Implementation planning: migration, testing, change management, and rollout.
7. Monitoring & alerts: ongoing tracking of further packaging/pricing announcements and renewal alerts.
An international company with 8,000 users had a mixed setup of Microsoft 365 E3 (6,000 users), M365 Apps per User (1,200 users), and separate Entra licenses (800 users). Upon renewal after July 1, M365 Apps would have increased by +17% and Entra Plan 1 by +16%; in addition, 2,000 devices were covered by Windows Enterprise per Device (+31%).
Approach and outcome after partner intervention:
· A portfolio scan provided full transparency; 18%of M365 Apps licenses were unused.
· A scenario calculation compared the current mix with a transition to unified Microsoft 365 E3/E5 for knowledge workers andFrontline bundles for the rest.
· Tactics included: selective early renewals and contractual negotiations for critical device licenses, volume discounts on E3/E5, downgrading/cancelling unused M365 Apps licenses, and migrating standalone Entra licenses into suite coverage.
· Direct license cost savings of approximately 15–25% compared to "no action + new prices."
· Reduction of immediate additional costs forWindows Enterprise per Device through targeted early renewals or contractualagreements (commitment period and conditions depending on the specific contract/negotiation).
· Operational simplification: fewer SKU types, clearer upgrade path strategy, reduced administrative overhead.
Conclusion: The pricing changes effective July 1, 2026 are more than standard adjustments they significantly shift economic incentives in favour of comprehensive Microsoft bundles and increase the urgency for active license management. Review your license situation now, analyse your usage, and obtain scenario calculations. With an experienced partner by your side, you gain speed, transparency, and a stronger negotiating position.
