Microsoft 365 is hiking prices for businesses – here’s how much it will cost you

• Some Microsoft 365 and Office 365 plans are set to get more expensive
• Business and government users will see the increases from July 2026
• In return, customers get more security and more AI

Microsoft has confirmed plans to raise prices for its business-focused Microsoft 365 packages, but here’s why you shouldn’t look to migrate elsewhere (according to them).

The suite now counts more than 430 million users and has been adopted by 90% of the Fortune 500 – a true reflection of market confidence.

Redmond has also shoehorned more and more Copilot-branded generative AI functionality into its apps, with even more AI, security and management features expected to come at the beginning of 2026.

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M365 prices are going up

“Organizations face an increasingly complex threat landscape, rising IT demands, and the urgent need for AI-powered transformation,” M365 and Copilot CVP Nicole Herskowitz explained, justifying the added features that have ultimately led to higher costs.

In terms of changes, O365/M365 E3 plans will soon gain Microsoft Defender for Office Plan 1, giving them access to enhanced phishing and malware protection against email and collaboration platforms.

Microsoft Security Copilot, an agentic suite of tools, is also coming to M365 E5 plans over the next few months.

Microsoft has published which new capabilities are rolling out to which plans in a blog post, including a handy table showing who’s set to gain 50GB of email storage, Outlook and Office app URL checking, Intune upgrades, and more.

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As a result, seven of Microsoft’s nine business SKUs will see increases of between 5% and 33% (for USD markets, at least). M365 Business Premium and O365 E1 will remain unchanged. Herskowitz confirmed that the changes will apply globally across other currencies.

All changes will come into effect from July 1, 2026, leaving customers with enough time to make reasonable adjustments.

Apart from commercial lines, Microsoft is also upping costs for government customers, with government versions of M365 E3/G3 rising 8% and M365 E5/G5 versions climbing 5%. Redmond also plans to increase government O365 E3/G3 prices by 13% – an initial 10% from July 1, 2026, and another 3% one year later.

For now, we have no reason to believe consumer pricing will follow suit. TechRadar Pro is waiting for a response from Microsoft on this.

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