Microsoft has published the complete pricing and packaging update for its commercial cloud suites, effective July 1, 2026. This is the first broad repricing of the Microsoft 365 and Office 365 estate since the New Commerce Experience settled, and unlike previous adjustments it is accompanied by a packaging change: several suites gain capabilities at the same moment their price moves. The two events are deliberately linked, and understanding that link is what separates a negotiated renewal from a passive one.
The headline numbers are modest at the top of the stack and severe at the bottom. Microsoft 365 E5 moves from 57.00 to 60.00 USD per user per month, an increase of roughly five percent. Microsoft 365 E3 moves from 36.00 to 39.00. Office 365 E3 takes a heavier hit, rising from 23.00 to 26.00, and Office 365 E5 moves from 38.00 to 41.00. Office 365 E1 is unchanged at 10.00. The pattern is consistent: the further you sit from the full Microsoft 365 bundle, the larger the percentage you absorb.
Where the real increases land
Frontline and small-business suites carry the sharpest movements. Microsoft 365 F1 rises from 2.25 to 3.00 USD, a thirty-three percent increase. Microsoft 365 F3 moves from 8.00 to 10.00, twenty-five percent. Microsoft 365 Business Basic goes from 6.00 to 7.00 and Business Standard from 12.50 to 14.00. Business Premium is the notable exception and holds at 22.00, which is a clear signal about where Microsoft wants the small-business market to land.
Standalone components move too, and several of them move hard. Windows Enterprise per device jumps from 5.85 to 7.63, just over thirty percent. Microsoft 365 Apps for Business rises from 8.25 to 10.00. Enterprise Mobility + Security E3 goes from 10.60 to 12.00 and E5 from 16.40 to 18.00. Microsoft Entra ID Plan 1 moves from 6.00 to 7.00 and Plan 2 from 9.00 to 10.00. Organizations that built a deliberately unbundled estate to control cost will find that the unbundled path is now the more expensive one.
The "without Teams" trap
The suites sold without Teams, created to satisfy European regulators, receive proportionally larger increases than their bundled equivalents. Office 365 E3 without Teams rises from 14.45 to 17.45, a twenty-one percent move against thirteen percent for the version that includes Teams. Microsoft 365 Business Basic without Teams rises twenty-three percent. If your organization stripped Teams out of the suite to save money, the arithmetic that justified that decision has changed and should be recalculated before renewal.
What you actually get for the money
Microsoft is adding capability alongside the price. Office 365 E3 gains Microsoft Defender for Office 365 Plan 1. Microsoft 365 E3 gains Defender for Office 365 Plan 1, Intune Plan 2, Intune Remote Help, and Intune Advanced Analytics. Microsoft 365 E5 gains all of that plus Microsoft Security Copilot, Intune Endpoint Privilege Management, Microsoft Cloud PKI, and Intune Enterprise Application Management. Business Basic and Standard gain fifty additional gigabytes of mailbox storage and URL time-of-click protection. Every suite gains Copilot Chat enhancements and Copilot Chat Analytics. Packaging rolls out through June 2026 and completes by August 1.
For a large number of customers this is genuinely net-positive value, because the added components are ones they were already buying separately. An organization paying for Intune Plan 2 and Defender for Office 365 P1 as add-ons on top of Microsoft 365 E3 should model the new bundled price against the sum of the old line items before treating this as a cost increase at all. In several audits we have run, it is not.
The renewal window is the whole game
Existing customers remain on current pricing until their renewal date. There is no forced migration and no mid-term repricing. That single sentence is the most valuable thing in Microsoft's FAQ, because it means a renewal executed before July 1 locks current rates for the full term. A three-year commitment signed in June is priced at the old table. The same commitment signed in July is not.
The corollary matters just as much: this is a one-time opportunity that closes permanently. Organizations with renewals falling in the second half of 2026 should be evaluating whether an early renewal, a term extension, or a restructure into a longer commitment produces a better total position than letting the anniversary arrive on schedule.
How Lorexus engages
We model your current estate against both price tables, identify which of the newly bundled components you are already paying for separately, and quantify the net position rather than the headline increase. Where an early renewal or a term restructure produces a better outcome, we build the case and run the negotiation with your partner or Microsoft directly. Most of the estates we review contain enough duplicated add-on spend to absorb the increase entirely.