Microsoft 365 Price Increase | more expensive from July 2026

Microsoft has announced a major global price increase for its commercial subscriptions, which will take effect from July 01, 2026. The price adjustment affects both Microsoft 365 Business and Enterprise licenses .

This article focuses on the business licenses. Note that the Enterprise licenses not covered here are also affected by a price increase of up to 33%.

• https://www.microsoft.com/en-us/microsoft-365/blog/2025/12/04/advancing-microsoft-365-new-capabilities-and-pricing-update/

Why are prices rising?

Although price increases are rarely met with enthusiasm, they are not uncommon in the fast-paced IT industry.

In this context, Microsoft regularly refers to the constant development of the Microsoft 365 platform. In recent years, numerous new functions have been implemented, especially in the field of artificial intelligence (AI) and security features.

These innovations aim to make users’ everyday work more efficient and safer. At the same time, these technological advances have also increased operating costs, so Microsoft is now passing on some of these additional costs to license fees.

What does this mean for your wallet?

The increase hits the most common plans we all use: Microsoft 365 Business Basic and Business Standard. The Business Premium license, on the other hand, remains exempt from this price adjustment.

You will feel the biggest difference if you have previously relied on flexible monthly billing – this is where the increase is most significant. But even as an annual payer, you will have to dig deeper into your pocket in the future.

The new prices from 01.07.2026 at a glance

The price development of the Microsoft 365 Business editions “Basic” and “Standard” depends on the selected term and payment method.

The costs are calculated per user and month, whereby in particular the payment method (prepayment or monthly payment) and the term (one year or monthly cancellable) determine the amount of the fees.

1. Annual advance payment (term: 12 months / plus VAT)

The cheapest option: You commit yourself for one year and pay the full amount in advance.

2. Monthly payment (term: 12 months / plus VAT)

The “NCE Annual Commit”: You commit yourself for one year (price protection), but conveniently pay monthly.

3. Monthly payment (term: 1 month / plus VAT)

The flexible option: Can be cancelled monthly, but the highest basic price.

Buying vs. renting: Is it worth switching to purchase licenses?

With subscription prices rising from July 2026, many companies are asking themselves whether the classic one-time purchase of software is an attractive option again. It is important to make a fair comparison and take some important aspects into account.

First of all, it must be noted that purchase licenses, such as Office Home & Business, do not include cloud services.

Businesses that continue to value features such as online meetings and digital collaboration will also need to book a solution like Microsoft Teams Essentials to meet these needs.

The following cost comparison shows the total costs for both models over a period of one, two and three years. The new subscription prices from July 1, 2026 will be compared to the one-time acquisition costs of a purchase license, supplemented by the annual costs for the Teams license.

Cost comparison: Subscription (new) vs. one-time purchase + Teams

(Calculation basis: Business Standard subscription (€11.70/month) vs. Office Home & Business (€242.19 one-time) + Teams Essentials (€3.89/month). Prices are per user, net.)

The analysis shows:

Business Standard:
In purely mathematical terms, the scales actually tip in favor of the purchase license in the third year. But be careful, this is a milkmaid’s calculation. If you decide not to subscribe, you do not use Exchange Online. That means: No professional email hosting, no perfect synchronization between mobile phone and PC and no web apps. Anyone who has ever had trouble with cheap IMAP mailboxes or local PST files knows: The few euros saved after three years are not worth the administrative stress.

Business Premium:
Here the matter is crystal clear. Even after a three-year term, the subscription is even cheaper than the Office Professional Plus and Teams Essentials package. But much more important is what you get for your money. The purchase license is “naked” software. The premium subscription, on the other hand, is a security fortress. You get Microsoft Intune for device management and Defender for Business against viruses and ransomware. These tools are completely missing from the paid version.

My conclusion as an admin:
With the premium package, the subscription wins all along the line – in terms of price and technology. As an admin, the topic of security is sacred to me, and the purchase license simply offers no protection.

In addition, there is another point that many forget: the “feature freeze”.

• Purchase license (e.g. Office 2024): You buy today’s booth. In two years, your software will be technically outdated, and you won’t get new AI functions or clever updates.
  
• Subscription model: You are always up to date. You also have 1 TB of OneDrive storage per person included – this alone often saves you expensive file servers or other cloud solutions.

What you should do now

There is still some room until the deadline of 01.07.2026 , but we both know how quickly the months fly by in day-to-day business. So that you don’t get caught off guard in 2026, here is my roadmap for you:

1. Do the license check: Take a close look at your environment: Do all users really use the thick packages? We often have “license corpses” in the system – employees who have long since left, or service accounts that unnecessarily block a full license.
   • Pro tip: Convert mailboxes of departed employees into shared mailboxes . They don’t cost anything and you back up the data without paying a month.
   • Check downgrade: Does the warehouse PC really need a Business Premium or is a Basic or a pure Exchange Online license enough? There is often cash here.
     
2. Use the NCE joker wisely: The flexible monthly subscription is convenient, but expensive, especially with the new prices from 2026. My advice: Pursue a mixed strategy.
   • Core workforce (approx. 80–90%): Put all permanent employees in the NCE Annual Commit. This will secure you the lower price for 12 months.
   • Flex buffer (approx. 10-20%): Keep a few licenses free in the monthly model for interns, seasonal workers or probationary periods. This way you remain flexible, but only pay the surcharge for a fraction of the licenses.
     
3. Timing is everything – The “Renewal Hack” Include the new figures for the second half of 2026 in your budget planning now so that the boss doesn’t fall out of the clouds.
   • The admin hack: If you do it cleverly, you will extend your annual contracts shortly before 01.07.2026. This allows you to log in the “old”, cheaper prices again for a full 12 months and effectively postpone the price increase until summer 2027. It’s best to mark the date in bold in your calendar now!

PDF | Comparison of subscriptions to purchases