Microsoft 365 Is Raising Prices.
Here's What It Costs You.
Microsoft is increasing list prices across most M365 plans starting July 1, 2026. If you haven't audited your licenses recently, you could be paying thousands more per year without noticing. Use our calculator to see your exact impact — then talk to us about reducing it.
Microsoft 365 New Pricing — Effective July 1, 2026
All prices are per user/month (USD). Annual commitment pricing shown.
Business Plans (up to 300 users)
per user / month · annual commitment
per user / month · annual commitment
per user / month · annual commitment
Enterprise Plans
per user / month · annual commitment
per user / month · annual commitment
per user / month · annual commitment
per user / month · annual commitment
Frontline Worker Plans
per user / month · annual commitment
per user / month · annual commitment
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Why Microsoft Is Raising Prices — And Why It Hurts Most Companies Twice
Microsoft has justified the increase as reflecting investment in AI features, infrastructure, and security — particularly the Copilot and Security additions that are baked into higher-tier plans. But for most small and mid-sized businesses, those AI features are underused or unused entirely.
Here's the real problem: most organizations are paying the increase on licenses they shouldn't even have. Inactive accounts, over-provisioned users, licenses assigned to contractors who left six months ago — these all compound the hit. A company paying for 80 seats of Business Standard when 65 people actually use it is wasting $1,050/month before the price increase lands.
The increase gives you a forcing function to fix what's been sitting unaddressed in your tenant for years. Companies that run an audit now will frequently find they can absorb part or all of the increase through right-sizing.
4 Things to Do Before July 1, 2026
The window to minimize your cost impact is open now. Here's the playbook.
Audit inactive and unlicensed users
Pull a report of all licensed users. Flag anyone who hasn't signed in within 90 days. Deactivate or downgrade immediately — you're paying for seats that provide zero value.
Right-size licenses to actual usage
Business Standard includes apps and features most employees never touch. If email, Teams, and OneDrive cover 80% of your staff, Business Basic at $7/user may be entirely sufficient — saving $7/user/month post-increase.
Lock in annual terms before the deadline
If you're on monthly billing, you're paying a premium already — and that premium grows after July 1. Committing to an annual term before the increase date locks in current pricing for the committed period.
Get a license health check from Iron Cove
We've been managing Microsoft 365 tenants since 2009. A license health check from Iron Cove typically surfaces 10–20% in savings — frequently enough to cover the entire price increase and then some.
Frequently Asked Questions
Everything IT leaders are asking about the July 2026 increase.
When do the new prices take effect?
Are all Microsoft 365 plans increasing?
Can I avoid the price increase by locking in early?
Should I downgrade users to a lower plan?
Does this affect Microsoft 365 Copilot pricing?
How does Iron Cove help with this?
Iron Cove Solutions · Microsoft Silver Partner since 2009
Don't just absorb the increase. Audit first.
We've managed Microsoft 365 tenants for 600+ customers across Southern California. A license health check takes 2–5 days and pays for itself — usually before the invoice arrives.
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