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Early this year, Microsoft announced the first-ever price increase for Microsoft 365 Personal and Home subscriptions. For example, in the US, since the launch of Office 365 12 years ago, pricing had remained at $69.99/year for Personal plans and $99.99/year for Home plans. With the updated pricing, these subscriptions now cost $99.99 and $129.99, respectively.
Today, Microsoft announced a substantial price increase for Microsoft 365 commercial customers. To help justify the change, Microsoft is adding new AI, security, and management features depending on the plan. To give customers ample time to prepare, the new pricing will take effect on July 1, 2026.
Here’s a quick summary of all the new capabilities:
Copilot Chat: Copilot Chat now works across Word, Excel, PowerPoint, Outlook, and OneNote with a unified, in-app chat experience. It now also includes inbox and calendar understanding plus Agent Mode to help create documents and presentations iteratively. IT admins also get integrated controls to secure, manage, and measure Copilot Chat usage.
Security: Microsoft is expanding Defender for Office P1 email security capabilities to Office 365 E3/Microsoft 365 E3, improving phishing, malware, and malicious link protection. URL checks are now included in E1, Business Basic, and Business Standard to block known malicious sites when users click links.
Management: Microsoft 365 E3/E5 now includes enhanced endpoint tools like Intune Remote Help, Advanced Analytics, and Intune Plan 2 for faster troubleshooting and proactive risk detection. E5 adds Endpoint Privilege Management, Enterprise App Management, and Cloud PKI to secure AI use and strengthen compliance.
Security Copilot: Security Copilot agents are now embedded directly in Defender, Entra, Intune, and Purview to streamline security operations. Over 70 built-in and partner agents help teams get started quickly, and Security Copilot is rolling out broadly to all Microsoft 365 E5 customers with a 30-day notice before activation.
Microsoft 365 price increase details:
| Microsoft 365 Suite | Current List Price | List Price (July 2026) | Percentage Increase |
|---|---|---|---|
| Business Basic | $6.00 | $7.00 | 16.67% |
| Business Standard | $12.50 | $14.00 | 12.00% |
| Business Premium | $22.00 | $22.00 | 0.00% |
| Office 365 E1 | $10.00 | $10.00 | 0.00% |
| Office 365 E3 | $23.00 | $26.00 | 13.04% |
| Microsoft 365 E3 | $36.00 | $39.00 | 8.33% |
| Microsoft 365 E5 | $57.00 | $60.00 | 5.26% |
| Microsoft 365 F1 | $2.25 | $3.00 | 33.33% |
| Microsoft 365 F3 | $8.00 | $10.00 | 25.00% |
Microsoft highlighted that it has delivered more than 1,100 features across Microsoft 365, Security, Copilot, and SharePoint in the last year alone, citing this additional value to justify the price increase.
Hope you enjoyed this news post. Feedback welcome.
Posted Friday 5 December 2025 at 3:50 am AEST (my time).
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