Microsoft Commercial Price Increases Effective July 2026 (UK-Focused Report)

Monday 8th December 2025

John Gorton

Author

Microsoft has announced a broad commercial price increase for Microsoft 365 suite subscriptions, effective 1 July 2026. This will impact virtually all Microsoft 365 and Office 365 plans for businesses – with list price increases generally ranging from around 4–10% for most enterprise and SMB products, and up to 25–33% on a few lower-cost plans. The UK will mirror these changes (approximately equivalent percentage uplifts in GBP pricing), since these are global list adjustments (separate from any currency exchange tweaks). Below, we detail the increases by product, the context for UK customers, comparisons to past Microsoft pricing moves, and steps you can take to mitigate these costs – especially important for Enterprise Agreement (EA) customers who also face the removal of volume-based discounts as of late 2025.

Advancing Microsoft 365: New capabilities and pricing update | Microsoft 365 Blog

What’s Changing on 1 July 2026? – Price Increases by Product

Effective July 1, 2026, Microsoft is raising the list price for nearly all its commercial cloud productivity suites (Microsoft 365 and Office 365). The table below summarizes the key products and their price changes. (All prices are per user per month list pricing for commercial customers, in USD. UK pricing will reflect similar percentage changes, with final GBP figures subject to Microsoft’s local market adjustments.)

Microsoft 365 Suite	Current Price	New Price (July 2026)
Business Basic	$6	$7
Business Standard	$12.50	$14
Business Premium	$22	$22
Office 365 E1	$10	$10
Office 365 E3	$23	$26
Microsoft 365 E3	$36	$39
Microsoft 365 E5	$57	$60
Microsoft 365 F1	$2.25	$3
Microsoft 365 F3	$8	$10

Estimated figures (est.) indicate unofficial projections since Microsoft’s announcement didn’t explicitly list those SKUs. Microsoft typically applies comparable % increases to those products. All increases shown are for SKUs including Microsoft Teams (the default); suites sold without Teams will also go up by the same absolute amount, maintaining the price delta.

Notable highlights:

Microsoft 365 Enterprise Suites (E3 & E5): The flagship bundles see moderate increases. M365 E3 rises from $36 to $39 (+$3, ~+8.3%). M365 E5 goes from $57 to $60 (+$3, ~+5.3%). For E3, this is the first increase since March 2022 (when it went $32→$36); for E5, it’s the first ever increase since E5’s introduction (Microsoft notably kept E5 flat in 2022 to drive adoption). Despite the increase, Microsoft will argue E5’s value remains high given its extensive security, compliance, and voice features – now bolstered further by new additions like Security Copilot (which will be included for all E5 customers).

Office 365 Enterprise (E1, E3, E5): The legacy “Office 365” plans (which lack some of the EMS/Windows components of full M365) are also slated to increase, though Microsoft’s blog focused on the M365-branded suites. Industry experts expect Office 365 E3 (currently $23) to go up roughly $2 (~+9%) to about $25; Office 365 E1 (currently $10) likely up $0.50 (+5%) to around $10.50. Office 365 E5, currently ~$38 with Teams, should increase by about $2 (+5%) to roughly $40. In essence, the same dollar increases are being applied to both Office 365 and Microsoft 365 equivalents. Microsoft has clarified that suites sold without Teams (an option reintroduced due to EU regulatory requirements) will also get an “equivalent dollar value increase” so that the difference in price between the with-Teams vs. without-Teams versions remains the same. (For example, if Office 365 E3 without Teams is $2–3 cheaper today, it will still be $2–3 cheaper after July, since both will go up by the same amount.)

Business (SMB) Plans: Microsoft 365 for small and mid-sized businesses (SMB) is also affected. Business Premium is expected to remain at $22, whilst Business Standard likely goes from $12.50 to $13.00 (+4%). Business Basic from $6.00 to around $6.25 (+4%). These represent modest upticks (in contrast to the larger ~10-20% jumps many of these saw back in 2022). Microsoft seems to be keeping SMB increases mild – perhaps to avoid pricing out smaller customers – with roughly $0.25–$1.50 increments on these plans. Even after the change, the entry-level Business Basic remains just over $6, which is notably low for the suite’s value (and still cheaper than Google Workspace’s basic tier).

Frontline Worker Plans (F1 & F3): The highest percentage increases hit the lower-cost frontline SKUs. M365 F3 jumps from $8 to $10 (+25%). M365 F1 (a very stripped-down license) jumps from $2.25 to $3.00 (+33%). While significant percentage-wise, in absolute terms these are only $1–$1.75 more per user. Microsoft is essentially resetting the base price for frontline cloud licenses, likely reflecting the fact that even those plans now include more features (and possibly encouraging customers to consider moving up to F3). This is the first price change for frontline plans in many years; previously, Office 365 F1 (kiosk) was $4 before being replaced by F3, and F1 at $2.25 was introduced later – so these increases realign the frontline pricing to match the added value delivered since those plans launched.

Nonprofits and Education: Microsoft stated that nonprofit pricing will increase in line with commercial (nonprofit discounts are typically a fixed % off list, so they will maintain that % off the new higher list price). Education (Academic) SKUs were not mentioned in the announcement, suggesting no change to pricing for A1/A3/A5 plans at this time – likely due to multi-year contracts in education and market sensitivity. So schools and universities appear to be spared from this 2026 increase on their academic licenses.

Dynamics 365 and Other Products: These July 2026 changes are specific to Microsoft 365 (Office) suites. Dynamics 365 products are not affected in this wave – Microsoft already raised Dynamics 365 prices about 10-20% effective October 2024 (the first big increase for D365 in years). Azure cloud services are also not directly impacted by this Microsoft 365 pricing update (though note: the elimination of EA volume discounts does affect Azure pricing through EA – more on that later). On-premises software prices (Windows Server, SQL Server, etc.) saw a ~10% increase in 2024 but are unrelated to this cloud subscription change. The focus here is firmly on Microsoft’s cloud productivity suites.

Why is Microsoft raising prices?

(Context of the July 2026 update) This price increase is driven by the significant new value Microsoft has added to its suites in recent years – particularly in AI capabilities and security/management tools:

AI in M365: Microsoft is heavily integrating AI (powered by GPT-4) across the M365 suite. For example, Copilot Chat (an AI assistant) is being rolled out to all Office apps at no additional cost. By early 2026, every user will have some level of AI-driven assistance in Word, Excel, Outlook, etc., to help draft content, summarize emails, analyse data, and more. These were previously premium capabilities that now increase the suite’s value (and Microsoft wants to capture some of that value in pricing). Microsoft’s view is that AI will dramatically boost productivity – and thus an uptick in subscription cost is justified.

Security & Compliance: Microsoft 365 E3 and E5 suites are getting new security features included. Notably, Defender for Office 365 (Plan 1) is being added to Office 365 E3 and M365 E3, giving E3 users advanced phishing/malware protection at no extra charge (previously this was an add-on or only in E5). Similarly, URL Safe Links protection is being added to E1 and Business plans. For E5 customers, Microsoft announced that Security Copilot (AI for security operations) will be included for all E5 users – a major value boost for organizations that might have paid separately for security AI tools. All these enhancements are folded into the existing licenses.

Endpoint Management (Intune): Microsoft is including parts of the new Intune Suite in M365 plans. Intune Remote Help, Advanced Analytics, and Intune Plan 2 are being added into M365 E3 and E5. And for E5, features like Endpoint Privilege Management and Cloud PKI are being included. These were previously separate paid capabilities (Intune Suite add-on costs ~$10 per user). Now, E3/E5 subscribers get them within the base license, increasing the bundle’s value (and potentially letting customers drop standalone tools).

Continuous Innovation: Microsoft points out that over “1,100 new features” were added across Microsoft 365, Security, Copilot, and SharePoint in the last year alone. While every individual organization might not use all those features, Microsoft’s strategy is to keep enhancing the suites and periodically adjust the price upward to reflect the cumulative improvements. The last broad price increase (2022) was similarly justified by a decade of added features (Teams, OneDrive, etc.). Now, just four years later, the transformative impact of AI and other improvements is again being monetised.

In short, Microsoft is monetising the additional value delivered (especially AI). With the competitive landscape (Google, etc.) and the fact that many customers are willing to pay for Copilot as a $30 add-on, Microsoft likely feels confident that a ~5–10% base increase for everyone is palatable given the promise of dramatically greater productivity and security. Of course, from the customer perspective, you might not have asked for all these extras – but you’ll be paying for them regardless come renewal time.

UK Customers: Local Pricing and Currency Considerations

Customers in the UK should expect the same percentage increases to apply on local (£) prices from July 2026. For example, if Microsoft 365 E3 increases ~10% globally, we anticipate the GBP price for E3 will also rise by about 10% from its current level (e.g. if E3 is around £30 user/month now, it would go to roughly £33). Crucially, this July 2026 change is in addition to Microsoft’s regular currency-based adjustments, not a replacement for them.

Microsoft has a “pricing harmonisation” policy where it reviews foreign exchange rates and adjusts cloud pricing in local currencies twice a year (typically in February and August/September) to realign with USD. For instance, in April 2023 Microsoft raised UK prices ~+9% to adjust for a weaker pound. Conversely, in February 2025 it lowered UK prices ~–5% as the pound had strengthened. These FX adjustments occur independently on a semi-annual schedule.

The July 2026 increase is separate from those: it’s a deliberate raise of the underlying US$ base prices due to added product value (AI/features), not due to currency changes. Microsoft explicitly said the 2026 list price changes “apply globally with local market adjustments” – meaning they’ll implement the new prices worldwide, and continue to use the FX harmonisation to ensure local currency prices stay in sync with USD over time.

For UK organisations, this means:

Even if the pound sterling remains stable or strengthens, you’ll still see these price increases, because they’re baked into the product price, not driven by currency.

If the pound weakens further by mid-2026, UK could even see a bit more due to an FX correction on top. If it strengthens, you might get a slight offset if a downward FX adjustment happens around the same time – but that would only negate some of the currency gap, not the base increase. (At present, the GBP is relatively strong compared to a couple years ago, so large FX increases like 2023’s are not expected unless macro conditions change.)

In practical terms, UK customers should plan that their £ per-user costs will go up ~5–10% for Microsoft 365 licenses around the time of their first renewal after July 2026. Remember, if your enterprise agreement or CSP term runs past July 2026, you won’t see a price change mid-term – the new prices hit when you renew or add new subscriptions after that date. But in budgeting, you should factor it in beyond that point.

It’s also worth noting that Microsoft’s biannual price harmonisation will continue indefinitely. So, twice a year the GBP pricelist may nudge up or down slightly based on exchange rates. Microsoft has indicated this provides “transparency and predictability” for global customers. Thus, UK companies will need to absorb the 2026 increase on top of whatever minor +/- % adjustments the currency alignment brings every six months. (Many UK users experienced 9% increase in 2023, then 5% decrease in early 2025; going forward, similar moves could happen, but the general trajectory of the base price is upward.)

Bottom line for UK: The July 2026 price increase will hit UK customers roughly the same way as elsewhere – plan for ~8–10% higher costs on E3/A3 plans, ~5% on E5, etc. Even if in early 2026 Microsoft were to adjust GBP pricing downward or upward due to FX, that’s separate; come July, the rates go up globally. So ensure your financial planning for 2026/27 accounts for this. It might be wise to communicate within your organisation early that “Microsoft has announced a global price increase effective next year” so that stakeholders are not caught off guard thinking it’s just an exchange rate blip.

(Note: Ireland and Eurozone customers will similarly see ~9-10% increase in Euro, as EUR pricing is also aligned to USD. Microsoft in 2023 raised Euro prices ~+11% and is not shy about adjusting local prices. So all of Europe will see these changes, with only slight local variance.)

Comparing to Previous Microsoft Price Adjustments

It’s helpful to view the July 2026 changes in context. Microsoft’s pricing for Microsoft 365 (and predecessor Office 365) has historically been quite stable, with very few increases in the decade prior to 2022. Here’s how this update compares to recent adjustments:

March 2022 – Modern Work Suites Increase: In March 2022, Microsoft implemented its first major price increase for Office 365/M365 commercial plans in over 10 years. At that time, Office 365 E3 went from $20 → $23 (+15%), Office 365 E1 from $8 → $10 (+25%), Office 365 E5 stayed at $35 (0% change), Microsoft 365 E3 from $32 → $36 (+12.5%), Business Basic $5 → $6 (+20%), Business Premium $20 → $22 (+10%). These were attributed to the value added since Office 365’s launch (Teams, etc.). Notably, Microsoft 365 E5 was unchanged in 2022 – Microsoft likely wanted to encourage more E5 uptake, which succeeded as many organisations moved to E5 for its security features. By 2026, with E5 adoption strong, Microsoft now feels able to nudge E5 up as well.

2023–2025 – Currency Harmonisation and On-Premises: In 2023, Microsoft introduced twice-yearly currency harmonisation. Effective 1 April 2023, it raised prices by +9% in the UK, +11% in Europe, etc., to align with USD. Smaller FX tweaks followed (e.g. –5% in UK in Feb 2025 as the pound recovered). These did not change the USD list, only local transaction prices. Meanwhile, Microsoft also increased some on-premises software pricing in 2024 (e.g. Office/Windows Server licenses +10%) to further incentivise cloud moves. These are separate from the cloud subscription pricing but show Microsoft’s general strategy of making legacy options costlier over time.

October 2024 – Dynamics 365 Increase: Microsoft announced in mid-2024 that Dynamics 365 CRM/ERP cloud products would see price rises effective 1 Oct 2024. Many D365 modules (Sales, Customer Service, Finance, etc.) went up roughly +10–20%. For example, Dynamics 365 Sales Enterprise went from $95 to $105 (+11%). This was the first significant increase for D365 since its launch. It signalled that Microsoft is comfortable raising prices where it believes product value has increased or market conditions allow. The July 2026 M365 increase mirrors this approach for the Office side of the house. (No additional D365 increases have been announced for 2026, and any D365 price changes would likely be separate communications.)

November 2025 – EA Volume Discounts Removed: A huge change for large enterprise customers came into effect Nov 1, 2025: Microsoft eliminated the tiered EA pricing levels (Levels B, C, D) for online services. Previously, an Enterprise Agreement customer with 5,000 seats (Level C) might automatically pay ~9% less than RRP, and a very large customer (15k+ seats, Level D) paid ~12% less than RRP. Microsoft flattened everyone to Level A (0% discount) at renewal. In practice, this means many large organisations will pay 6–14% more for the same licenses once their EA renews after Nov 2025. For example, a Level D customer loses a 12% discount – that’s effectively a 13.6% price increase to get to list price. Microsoft’s rationale was to simplify pricing and align EA with CSP and web pricing (and perhaps to boost CSP adoption). This change compounds the impact of the July 2026 increase: a large EA customer renewing in say, August 2026, will first see their prices go to full list (if they hadn’t already at a prior renewal) and then that list is ~10% higher than it was before July. Many enterprises are looking at ~20% net increase vs. what they paid pre-2025 by the time all is said and done. This makes Microsoft’s cloud cost inflation for big customers quite significant over a short period. (Note: Education and government EA programs were exempt from the discount removal; they retain special pricing.)

In short, the July 2026 increase is another step in Microsoft’s pattern of periodically adjusting cloud subscription pricing upwards, especially after delivering new functionality. It comes on the heels of the EA discount policy change, which for some was effectively an increase in 2025. While Microsoft can point to huge product improvements, customers will need to manage these cost rises within their IT budgets (many of which are under pressure). The timing – with a long lead time and amidst a broader industry trend of vendors raising prices – suggests Microsoft expects most customers to accept the new pricing by renewal time, though not without some grumbles and financial juggling.

Impact on Enterprise Agreement Customers: “Double Whammy” of Discount Removal + Price increase

If your organisation licenses Microsoft 365 through an Enterprise Agreement (EA) or similar volume licensing contract, it’s important to understand how the 2026 price increases intersect with the recent removal of volume-based price tiers:

EA Volume Discounts Recap: Traditionally, EA pricing had Levels A, B, C, D – larger enrolments (e.g. 2400+ users for Level B, 15k+ users for Level D) automatically got ~6%, 9%, 12% off the list price, respectively. Microsoft ended this programmatic discount structure on 1 Nov 2025. Now, all EA customers pay Level A (list price) for online services at renewal, regardless of size. This means effective price increases at renewal of ~6% (Level B), ~10% (Level C), ~14% (Level D) for those who previously had those discounts. (For instance, if you were paying $8.80 for a license that lists at $10 – a 12% discount – you’ll now pay $10 at renewal.)

Overlap with July 2026 Increase: The timings mean many EA customers will encounter both changes around a similar period. If your EA renews anytime after July 2026 (or even in late FY26), you likely will be paying full list and that list is higher. Concretely, let’s say pre-2025 you paid $32 per user for E3 under a Level D EA (list $36 minus 12%). If your renewal is in, say, Oct 2026, you will pay ~$39 list for E3 post-July-2026. That’s $32 → $39, about a 21.9% increase in unit price. Even a Level B customer (6% discount) with E3 $33.84 pre-2025 would go to $39 (+15% or so). This doubled impact will vary by SKU (E5’s % increase is smaller, frontline F3’s is larger, etc.), but for many large organisations the combined effect is roughly 15–25% higher costs for M365 at next renewal, compared to status quo. This is substantial and will require budget planning.

EA vs CSP Considerations: With volume discounts gone, the EA program offers less of a price advantage than it used to. Microsoft has positioned CSP (Cloud Solution Provider) and Microsoft Customer Agreement as viable alternatives, where pricing is also at list but potentially more flexible. Some enterprises might consider not renewing an EA and instead going CSP if that offers other benefits (or if they can snag partner discounts). However, EA still has some benefits (like price protection during term, the ability to do true-downs annually, and the inclusion of Software Assurance benefits for those with on-prem usage). The key is that pricing differences are no longer a deciding factor – it’s now more about convenience and contract terms.

Unified Support Costs: One indirect effect of both the EA discount removal and the price increase is on Microsoft Unified Support fees. Unified Support is often charged as a percentage of your total Microsoft spend (e.g. ~10% of your license annual expenditure for core support). If your Microsoft 365 costs rise ~20%, your support contract might automatically go up by 20% as well, since you’re spending more (unless negotiated otherwise). Bytes has been warning customers that increases in Microsoft subscription costs will also “tax” your support costs if you use MS Unified. This is another factor to account for in cost projections (and perhaps a reason to consider third-party support options that aren’t tied to spend).

In summary, Enterprise Agreement customers need to brace for a bigger impact. The removal of price tiers was effectively an immediate list price increase for large customers, and the 2026 global increase compounds on top of that. If you haven’t yet renewed post-Nov 2025, the first renewal after that date will bring you to Level A pricing plus the new higher rates. Wise organisations are calculating these effects now to avoid surprises. For example, one internal analysis showed that a ~15k-seat company could see roughly a 22–25% increase in annual Microsoft 365 E3 costs when moving from a 2023 EA (with Level D pricing) to a 2026 EA renewal (Level A + new pricing). It underscores why proactivity (renegotiating early, optimizing licenses, etc.) is crucial – which leads to our next section on recommendations.

Recommendations – Mitigating the Impact and Preparing for the Change

Facing a significant price increase, customers should take proactive steps in 2025 and early 2026 to offset or delay the impact. Bytes Software Services and other licensing experts are advising a number of strategies to help customers navigate this period:

Renew or Extend Before July 2026 (Lock in current prices): If possible, execute renewals or new purchases prior to 1 July 2026 to secure the existing pricing for the duration of your term. Microsoft honours price locks for the term of an agreement or subscription. For instance, if your EA is up in Dec 2026, you might negotiate an early renewal in Q2 2026 to beat the price rise. Similarly, CSP offers 1-year and 3-year subscription terms on most licenses – if you start a 3-year CSP in June 2026, you’ve locked today’s price until June 2029. Even a 1-year CSP starting June 2026 buys you time until mid-2027 at the old rates. This is a common tactic: pull forward renewals or extend terms now. Bytes often calls this “price protection” – gaining longer-term security against impending increases. The downside is committing sooner/spending earlier, but the savings can be considerable.

Consider CSP as a Strategic Option for EA Customers: With the EA volume discounts gone, the Cloud Solution Provider (CSP) program becomes more attractive. CSP allows for annual or multi-year term subscriptions with fixed pricing, and often more flexibility (like reducing seat counts at renewal or adding in smaller increments). Bytes specifically recommend EA customers with renewals in late 2026 or 2027 to evaluate doing a CSP commit in 2025/26 to lock in prices. For example, if your EA ends Sept 2026, you might purchase 12 months of CSP licenses to commence July 2026 so that you don’t have a gap – effectively bridging your EA end date. In some cases, customers might even choose to move entirely to CSP at EA expiry if it proves simpler or if they can get a slight partner discount. It’s worth discussing with Bytes or your LSP how a CSP 3-year term could be used to secure current pricing for 2027–2028–2029. (Microsoft has enabled 3-year offers for CSP on seats like M365 E3 specifically to cater to this need.) Keep in mind, moving between EA and CSP requires planning for things like billing and true-ups, but many customers did this during the 2022 increase and found it beneficial.

Leverage the Remaining Time on EA Price Protection: If you’re mid-term in an EA now, remember you have price protection until the EA ends. You may want to maximize purchases on the current EA before it expires. For example, if you anticipate growth, you could add extra licenses before your EA renewal (they’ll be at the old price until EA end). Also, if you’re considering new Microsoft products (Power Platform, Dynamics modules, etc.), buying or even “pre-reserving” them under the current EA pricing could avoid the higher costs later. Microsoft’s EA policies allow certain adjustments at the anniversary. Speak with your Bytes account team about strategies like an early commitment to renew or adding new products in advance – sometimes called a “reservation” – to lock prices. Be mindful: after Nov 2025, any new EA purchases are at Level A pricing, but still, locking in before July 2026 secures that Level A current price as opposed to the future higher one.

Optimize and Right-Size Your Licensing: Now is the time to do a thorough license audit and optimization exercise. Before prices go up, identify where you are over-licensed or under-utilizing what you have:

*True-Ups / True-Downs: If you’re in an EA, you can reduce licenses at renewal or in an EAS (subscription) annually. Take advantage – dropping 5-10% of unused licenses can offset a 5-10% price increase.
*E3 vs E5 vs Add-ons: Analyse if you have users on E5 who don’t use E5 features – perhaps some could downgrade to E3 + add-ons selectively, or vice versa. Sometimes consolidating to E5 for all can actually be cheaper than a mix, depending on usage. The goal is to not be paying for features people aren’t using. Tools like Bytes’ Quantum 365 can scan usage and identify inactive accounts, oversized licenses, etc.

Eliminate Duplicate or Unneeded SKUs: With new inclusions (Defender, Intune) in the suites, you might be able to cancel separate products. For example, if you currently buy a third-party mobile device management tool and M365 will now include that via Intune – you could drop the third-party tool’s cost. Or if you have users with both E3 and some extra standalone licenses that might be better covered by an E5, consolidate them. Software asset management efforts here can yield savings to counteract the price rise.

Push for Discounts or Funding: Even though list prices are set to rise, Microsoft still negotiates on large deals. If you’re a major customer renewing close to the price increase, pressure your Microsoft account team for transition discounts or concessions. Sometimes Microsoft may offer a one-time discount or extra licensing grants to ease the switch to Level A pricing for former Level D clients, for example. Also consider using any Microsoft funding programs (ECIF, workshops, etc.) to get free services – not a direct discount, but value-add to sweeten paying more.

Explore 3-Year EA Renewal: EAs are typically 3-year, but you might inquire if a 5-year term is possible, locking pricing longer (rare, but sometimes offered to very large accounts or public sector). If not, at least a 3-year EA renewed just before July 2026 locks that price until 2029 (for existing licenses). Note: New Commerce CSP also offers up to 3-year. The theme is secure pricing for as long as you can. Whichever vehicle (EA or CSP) you use, try to push out your exposure to the new prices. Some organisations are considering splitting their estate – e.g. keep core users on an EA renewed now for 3 years, but put some peripheral or growth users on a 3-year CSP as well, effectively hedging bets and possibly qualifying for more favourable terms on each.

Communicate Internally & Adjust Budgets: Ensure that your finance team is aware of these upcoming increases well in advance. It may sound basic, but internal communication can save a lot of headache later. Many CIOs and CFOs have been caught off guard by Microsoft’s moves in the past (e.g. the 2023 currency jump). Don’t let that happen in 2026 – start flagging in budget planning that “we expect Microsoft license costs to go up by ~X% next year.” The earlier you socialize this, the more likely you’ll secure the necessary budget or approval for any upfront actions (like early renewals) you want to take. Some companies create a scenario plan: e.g. what if we renew early vs renew on schedule, to show the cost difference. This can justify to leadership why you might spend money a bit sooner (to save over the term).

To summarise, action before reaction is key. Microsoft has given a long notice (announcement in Dec 2025 for Jul 2026 effect) – use that time. Bytes are ready to help with licensing workshops, cost optimisation analyses, and renewal strategy sessions. By combining smart procurement timing (locking prices early) with license optimisation (cleanup and rationalisation), you can significantly mitigate the financial hit of the coming price increases. Some organisations may even manage to keep their effective Microsoft spend flat year-on-year despite the nominal price increase – but only with careful planning and adjustments. The worst position to be in is doing nothing and simply accepting a 20% budget jump; the best is to be informed, prepared, and proactive in negotiating and managing your Microsoft estate.

In Conclusion

Come July 2026, Microsoft’s commercial cloud prices are rising across Microsoft 365 and Office 365 suites, including in the UK market. These changes reflect the huge investments Microsoft has made in AI and security features, but they will require customers to pay more for the same subscriptions. UK customers should remember this is distinct from currency adjustments – it’s a real price increase on top of any exchange rate moves.

For large enterprises on EA, the impact is magnified by the prior elimination of volume discounts, meaning many will effectively confront double-digit percentage cost increases at their next renewal. However, with timely action – renewing early, leveraging CSP, optimizing license usage, and working closely with partners like Bytes – you can delay or reduce the impact and find ways to stretch your budget further. Microsoft’s cloud services undoubtedly bring great benefits, and with the right strategy you can continue to harness those while keeping costs under control as the pricing evolves. The key is planning now for what’s coming, so that July 2026 is a well-managed milestone rather than an unpleasant surprise.

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