Microsoft 365 Commercial Subscriptions to See a Price Hike Amid AI-Driven Feature Expansion
Microsoft boosts Microsoft 365 prices with new AI and security upgrades.
Key Takeaways:
- Microsoft will raise prices for Microsoft 365/Office 365 commercial plans starting July 2026.
- New AI, security, and management features are being added across multiple tiers.
- Enterprise and SMB plans see different adjustments, with more enhancements coming to E3 and E5.
Microsoft will raise prices for Microsoft 365 and Office 365 commercial subscriptions starting July 2026, marking one of its biggest updates in years. The increase comes alongside major upgrades, including new AI, security, and device management capabilities.
Microsoft is changing its commercial subscription prices across different plans. For small and mid-sized businesses, Business Basic will rise to $7 per user monthly, while Business Standard moves to $14, and Business Premium remains at $22. Enterprise customers will see Office 365 E1 stay at $10, but E3 will increase to $26, and Microsoft 365 E3 (which includes Windows) will go up to $39. The top-tier Microsoft 365 E5 plan will cost $60. For frontline workers, F1 subscriptions will climb to $3, and F3 will rise to $10.
For enterprise customers, Microsoft 365 E3 and E5 are gaining advanced Intune capabilities such as Remote Help, Advanced Analytics, and Intune Plan 2. Microsoft 365 E5 subscribers will also receive Endpoint Privilege Management, Enterprise App Management, and Microsoft Cloud PKI. These features remain available as separate add-ons for commercial customers. Moreover, Security Copilot features will soon be rolled out to all Microsoft 365 E5 customers in the coming months.
New AI and security capabilities added across Microsoft 365
Microsoft has also detailed several new capabilities that have been added or are coming soon to Microsoft 365 suites at no additional cost in 2026. These include Copilot Chat integration across core apps like Word, Excel, PowerPoint, Outlook, and OneNote. However, the full Copilot experience still requires an additional $30 per user per month on top of existing subscription costs. Moreover, Microsoft 365 E3/Office 365 E3 now includes enhanced email security through Defender for Office Plan 1.
“We are continuously investing and innovating our platform for the future,” said Nicole Herskowitz, Corporate Vice President for Microsoft 365 and Copilot. “In the last year, we released more than 1,100 features across Microsoft 365, Security, Copilot, and SharePoint.”
How Microsoft’s pricing has evolved
Microsoft has rarely increased prices for its Office 365 commercial subscriptions. The first major hike came in 2022, which marked the first change since Office 365 launched in 2011, and coincides with the rebranding to Microsoft 365 in 2020. That increase was justified by expanded features, with E3 rising from $32 to $36 per user per month, while E5 remained at $57 to encourage adoption. In 2024, Microsoft also raised on-premises Office server prices by 10%. Earlier this year, Office 365 consumer bundles saw a similar price change, which continued the trend of incremental increases tied to added functionality.
Starting on July 1, 2026, the pricing changes will be applicable to commercial customers globally. Microsoft noted that pricing for nonprofit organizations will increase in proportion to commercial rates because it is based on a fixed discount percentage. Microsoft 365 government plans will see price increases as well, but any adjustments exceeding 10% will be introduced gradually over several years.
Rabia has a master's degree in Software Engineering and she has years of experience writing professionally about Microsoft products and other technologies. Rabia has also written for OnMSFT.com as well as Windows Report. She is always up to date on t...
