Microsoft 365 customers have gotten an early Christmas present from Santa Satya: price rises. All that AI goodness isn’t going to pay for itself.
The increases, which will affect the company’s commercial, frontline worker, and government customers, take effect from July 1, 2026, and range from a slight bump to an eye-watering hike. According to Microsoft, the rises (or “updates” in Micro-speak) are driven by expanded security, management, and AI capabilities.
Microsoft said, “Organizations face an increasingly complex threat landscape, rising IT demands, and the urgent need for AI-powered transformation.
“To help our customers meet these challenges head-on, we’re enhancing our Microsoft 365 offerings with additional security and management capabilities empowered by AI.”
And also increasing the prices.
Not all prices are rising. Business Premium will, for example, remain $22. However, Business Standard will go from $12.50 to $14, and Business Basic will increase from $6 to $7 per month.
Other increases are substantial. The cost of the Microsoft 365 versions aimed at frontline workers, F1 and F3, will rise sharply. Microsoft 365 F1 will go from $2.25 per month to $3, an increase of around a third. F3 is set to go up from $8 to $10.
The last increases came in 2022, and, according to Microsoft, were the first significant increase in a decade. The company has clearly got a taste for price hikes and so will turn the screws a little tighter on its customers in 2026 rather than wait for another ten years.
After all, the company said in its announcement, “In the last year, we released more than 1,100 features across Microsoft 365, Security, Copilot, and SharePoint.” So it’s only fair that it should charge a little (or a lot) extra for all the new features.
Earlier this year, Microsoft warned customers that price rises were on the way for personal and family subscriptions due to all the extra Copilot functionality now available. Customers could opt to skip the feature (assuming they could find the option) to bring the prices back down.
In its announcement, Microsoft said that the changes would apply globally. In addition, the company said “nonprofit pricing will be adjusted in line with commercial pricing.” This is due to the fixed percentage discount applied for nonprofit pricing. Government pricing is also increasing, although any increases over 10 percent will be phased in over multiple years.
Microsoft included a helpful table summarizing new capabilities coming to Microsoft 365 suites in 2026, including Copilot Chat enhancements and additional security, management, and analytics features.®
