Microsoft 365 Prices Are Changing: Lock in Current Rates by June 30 and Help Customers Optimize their Microsoft Solutions.

TL;DR

Microsoft 365 prices are increasing July 1, 2026. Customers who renew before June 30 can lock in current rates for one year. This is also a good moment to review their broader Microsoft setup and make sure they're getting full value.

Shield your customers from the price increase—and help them plan what's next

Microsoft 365 pricing is going up on July 1, 2026—but customers who act before June 30 can lock in current rates for another year. If you work with businesses that rely on Microsoft 365, now is the time to reach out and help them do exactly that.

It's also a natural opportunity to make sure they're getting full value from their Microsoft solutions—reviewing their current setup, checking that licenses match their actual needs, and having a broader conversation about where Microsoft can take them next.

This article covers what's changing, what to do before the deadline, and how to make this a genuinely useful conversation for your customers.

What’s changing

Starting July 1, 2026, Microsoft will increase pricing on a wide range of Microsoft 365 commercial suites and standalone components across Enterprise, Business, and Frontline tiers. Standalone Microsoft Teams and Copilot SKUs are not affected.

Here's a summary of key increases (USD list pricing):

Business suites

• Microsoft 365 Business Basic: $6.00 → $7.00/user/month (+16%)

• Microsoft 365 Business Standard: $12.50 → $14.00/user/month (+12%)

• Microsoft 365 Business Premium: no change ($22.00)

Enterprise suites

• Microsoft 365 E3: $36.00 → $39.00/user/month (+8%)

• Microsoft 365 E5: $57.00 → $60.00/user/month (+5%)

• Office 365 E3: $23.00 → $26.00/user/month (+13%)

Frontline suites

• Microsoft 365 F1: $2.25 → $3.00/user/month (+33%)

• Microsoft 365 F3: $8.00 → $10.00/user/month (+25%)

Selected standalone components are also increasing, including Microsoft 365 Apps (+17%), Windows E3 (+15%), Entra Plan 1 (+16%), and EMS E3 (+13%).

For the complete list of affected SKUs and pricing by customer segment—including nonprofit and government equivalents—visit the Microsoft 365 Pricing and Packaging Updates page.

Alongside the price changes, Microsoft is also rolling out new capabilities to several suites starting in June 2026—including security enhancements, Copilot Chat improvements, and expanded Intune features. So for many customers, the increase comes with added value too.

Stay up to date on the latest Microsoft news

For ongoing updates on Microsoft news and resources, bookmark the AppDirect Microsoft Corner.

What to do by June 30

The window is short. Here’s how to make the most of it

• Review upcoming renewals. Start with customers whose subscriptions expire in the next few months—but don’t stop there. Any customer with an active M365 subscription could benefit from locking in current pricing now.

• Identify who’s most exposed. Larger deployments and customers on multiple M365 workloads will see the biggest dollar impact. Frontline customers are facing some of the steepest percentage changes—worth a proactive call.

• Reach out before they ask. Don’t wait for customers to notice the change on their invoice. A well-timed heads-up positions you as the advisor who stays ahead of these things—and opens the door to a broader conversation.

• Align on budgets now. Locking in pricing before July eliminates a mid-year budget surprise. That’s a conversation finance teams will appreciate.

“This is exactly the kind of moment where advisors can demonstrate real value. Customers don’t always have visibility into Microsoft licensing changes until they’re already on the bill. Getting ahead of this before June 30 protects their budget and shows you’re watching out for them—that’s what a trusted partner does.”

— Mitchell Wengreniuk, Microsoft Practice Lead, AppDirect

Beyond the price increase: A conversation about the bigger picture

A pricing change is a legitimate reason to reach out, but it's also an invitation to have a more useful conversation. Most customers are so focused on day-to-day operations that they rarely step back to look at the full picture of what they're spending on technology, what's working, and what isn't. You can help with that.

Microsoft 365 is often a company's single largest software subscription, but it rarely lives in isolation. The average organization runs dozens of SaaS applications alongside it—and research suggests they're actively using only about half the licenses they're paying for across their tech stack. Renewals slip by unnoticed, duplicate tools accumulate across departments, and IT teams often lack a clear view of what's being spent or used. A conversation that starts with Microsoft can quickly become a much more valuable one.

Questions to guide the conversation

On getting the most from Microsoft:

• Are all users on the right license tier for what they actually do? Are there mismatches—users overprovisioned or underprovisioned for their role?

• Are there security or compliance features already included in their current subscription that haven't been activated?

• As Microsoft adds capabilities to existing suites this summer, are there new features worth planning to enable?

On the broader technology picture:

• Beyond Microsoft, do they have a clear view of all the SaaS tools they're paying for—and actually using?

• Are there redundant or underused applications that could be consolidated or cut?

• Are renewals being managed proactively, or do they tend to auto-renew without review?

• Is IT in control of software procurement, or are departments buying tools independently—creating security and compliance blind spots?

• What other services in their tech stack could use a review for better management and optimization? Think: energy, hardware, network and mobility, AI readiness and management, and security.

On what's next:

• Have they started using Microsoft Copilot? If so, is adoption spreading or stalling—and why?

• Are they running AI pilots that haven't yet scaled into production?

• Do they have concerns about security, governance, or compliance that are holding back broader AI adoption?

What to listen for

Some of the best opportunities come from offhand comments rather than direct answers. Pay attention when customers say things like:

• "We're still figuring out what to do with Copilot"→Likely a governance or change management gap, not a readiness gap

• "We're using [other tool] for that"→Signals a potential consolidation opportunity, within Microsoft or across their stack

• "IT is managing it, I'm not sure of the details"→The decision-maker isn't fully engaged; could be an opening for a more strategic conversation

• "We've grown a lot this year"→Licensing probably hasn't kept pace, across the board

• "Security is a concern but we haven't had time to address it"→Unused security features in existing plans, or a case for a more unified approach

Software sprawl

Most businesses haven't stopped to audit what they're actually running. Software accumulates quietly—licenses that nobody's using, tools that duplicate each other, apps that departments bought independently without IT knowing. By some estimates, companies are wasting upwards of 15% of their software spend on shelfware alone, and that number grows every year without active management.

That's the real conversation hiding behind a Microsoft renewal. Once a customer starts thinking about what they're spending on M365, it's natural to ask: what else are we paying for that we're not fully using? Are there redundant tools we could cut? Do we even know what's out there?

AppDirect can help advisors facilitate exactly that kind of review. The AppDirect platform gives customers one place to see and manage all their software subscriptions—unified billing, real-time spend visibility, automated onboarding and offboarding, and secure access management across every app, not just Microsoft. It's a practical way to help customers stop the waste, close the shadow IT gaps, and make sure they're only paying for what they actually need.

For a deeper look at how to position this with customers, read Why savvy businesses are centralizing their SaaS management.

What else is new: two Microsoft innovations worth knowing about

While the pricing conversation is front and center right now, May 1 also brought two meaningful additions to the Microsoft portfolio that are worth having in your back pocket — especially if you're already in a conversation about where a customer's Microsoft setup is headed.

From AI experiments to enterprise reality: Microsoft 365 E7 The Frontier Suite

Many organizations have dipped their toes into AI — a Copilot pilot here, an automation project there. But moving from scattered experiments to something that actually runs at scale, securely and consistently across the business, is where most get stuck. Governance is unclear, security policies haven't caught up, and there's no central way to manage the AI tools proliferating across teams.

Microsoft 365 E7 The Frontier Suite was built for exactly that moment. Generally available since May 1, 2026, at $99 per user per month, it brings together everything an enterprise needs to move AI from pilot to production — in one governed, integrated platform.

The suite includes:

• Microsoft 365 E5 — enterprise-grade security, compliance, and productivity

• Microsoft 365 Copilot — AI embedded directly into everyday work

• Microsoft Entra Suite — unified identity and access governance

• Agent 365 — a centralized control plane to discover, govern, and secure AI agents across the organization

The customers most ready for this conversation are those who've already started with Copilot or other AI tools but are finding it hard to scale adoption in a way that IT and leadership are comfortable with. E7 gives them the structure to do that — without having to assemble the pieces themselves.

For customers going all-in on Copilot: a long-term commitment option now exists

Until recently, Microsoft 365 Copilot in the CSP channel was only available as a one-year subscription — which made sense for customers still figuring out whether AI would stick. But for organizations that have moved past that question, a one-year term can feel like an artificial constraint on something they're clearly committed to.

As of May 1, Microsoft offers a 3-year Copilot subscription in the CSP channel. For customers who have proven Copilot's value and are ready to make it a permanent, organization-wide capability, this option offers greater predictability — both in terms of pricing and planning.

It's not for everyone. Customers still evaluating or in early adoption are better served by the 1-year option, which keeps things flexible. But for the right customer — one where Copilot is already embedded in daily workflows and leadership is thinking long-term — it's a meaningful conversation to have.

AppDirect is here to help

If you need help reviewing accounts, identifying renewal opportunities, or figuring out how to position any of these solutions with specific customers, reach out to our Microsoft Product Sales Specialist — we're here to support the conversation.

For ongoing news, updates, and resources, visit the AppDirect Microsoft Corner.

The deadline to lock in current Microsoft 365 rates is June 30, 2026. Reach out to your customers now — before the change is already in effect.

The window to act is short, but the opportunity is bigger than the deadline. Customers who feel looked after during moments like this remember it. So do the ones who didn't get a call.