July 2026: Microsoft raises prices, what does it mean for you?

The price increases have been announced, and they hit broader than most people think. We've already had calls from customers who were caught off guard, so let me lay it all out.

Microsoft has announced two major changes effective July 1, 2026:

Price increases: Most plans rise between 5% and 33%. This is the largest combined price adjustment since Microsoft 365 launched. It's not just fine-tuning, it's a real increase.

Removal of volume discounts: Enterprise Agreement Level A-D discounts are being eliminated. All customers pay list price regardless of user count. For large organizations with 1,000+ users, this can mean 8-15% extra on top of the price increase itself. That's the change that hits hardest, and nobody is talking about it.

The full overview. Pay attention to the percentages, some are significant:

• •Business Basic: $6 → $7/mo (+17%)
• •Business Standard: $12.50 → $14/mo (+12%)
• •Business Premium: $22 → $22/mo (UNCHANGED)
• •Office 365 E3: $23 → $26/mo (+13%)
• •Microsoft 365 E3: $36 → $39/mo (+8%)
• •Office 365 E5: $38 → $41/mo (+8%)
• •Microsoft 365 E5: $57 → $60/mo (+5%)
• •Microsoft 365 E7: $99 → $99/mo (UNCHANGED)
• •F1: $2.25 → $3/mo (+33%)
• •F3: $8 → $10/mo (+25%)

Let me put it in perspective with real numbers. This is how it hits your bill:

• •50 users on Business Standard: +$75/mo (+$900/year)
• •100 users on E3: +$300/mo (+$3,600/year)
• •200 users on E5: +$600/mo (+$7,200/year)
• •50 frontline on F3: +$100/mo (+$1,200/year)

For a typical organization with 100 office workers on E3 and 50 frontline on F3: +$400/mo = +$4,800/year. It's not the end of the world, but it's not nothing either.

And the ugly truth for the big players: with the removal of volume discounts, organizations with 1,000+ users may see a combined increase of 15-25% in their Microsoft 365 budget. That's serious money.

What we're telling our customers to do, today, not in two months:

1. Review your licenses. Remove inactive users and double licensing. It's free to do and saves money immediately.

2. Evaluate your plan mix. Do you have employees on E3 or E5 who really only use Teams and Outlook? Move them to F3. No reason to pay $39/mo for an E3 license when a $10/mo F3 covers what they actually use.

3. Consider Business Premium. It's NOT increasing in price and includes Intune + Defender. For SMBs under 300 users, it may be better value than E3 from July 2026.

4. Consider E7 for E5 customers. If you're already paying E5 ($60) + Copilot ($30) = $90/mo, E7 ($99/mo) makes sense, for $9 extra you also get Agent 365 and Entra Suite.

5. Contact your Microsoft partner. If you have an Enterprise Agreement, negotiate an extension before July 1, 2026 to lock in current prices. That's the single action that can save the most.

Your action plan:

Now: Review your licenses and identify savings. Spend an afternoon on it, it's the best ROI you'll get all year.

May 2026: E7 Frontier Suite becomes generally available. Evaluate whether it makes sense for you.

July 1, 2026: New prices take effect. Volume discounts removed.

If you have an Enterprise Agreement with 500+ users, the price increase combined with the removal of volume discounts (1 November 2025) is significantly worse than the announced 5-13% on list price. Level D customers actually see ~18-23% combined increase.

What you can negotiate before renewal:

• •Multi-year commitment discount: Microsoft often offers 3-5% discount for 3-year commitment vs 1-year. It's not publicly priced, it must be negotiated.
• •Bundling discounts: If you buy M365, Dynamics 365 and Azure in the same agreement, you can negotiate Microsoft Customer Agreement discounts (typically 3-7%).
• •Promotional pricing for new SKUs: E7 and Copilot Business have launch discounts that can be extended beyond the standard period if you negotiate early.
• •Co-termination: If you have multiple agreements expiring at different times, you can consolidate them under one renewal. Typically saves 2-5% via reduced administration.

What you can NO longer negotiate:

• •Level B/C/D volume discounts are gone for online services. That era is over.
• •List price at SKU level is fixed. Microsoft does not negotiate on announced prices.
• •Multi-tenant discounts are heavily reduced after 2024.

Concrete action plan before your next renewal:

1. Ask your LSP (Licensing Solution Provider) for a TCO analysis 6 months before renewal. 2. Compare with competing CSP offers. Even if you stay with the same partner, competition creates negotiation leverage. 3. Consider moving non-critical workloads to alternative platforms (e.g. Google Workspace for marketing team) as negotiation leverage, not necessarily as actual migration. 4. Develop a "walk-away" position: what's the minimum license combination you can manage with, if Microsoft doesn't offer a discount?

Organizations that negotiate actively typically achieve 5-12% better terms than those who simply accept the first offer. On a $500K annual license spend, that's $25,000-60,000 per year.