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Hi TAG Members,
Microsoft has announced commercial price increases across select Microsoft 365 and Office 365 licenses, effective July 1, 2026. You'll want to get ahead of this with your customers before it shows up on their invoices.
What's Changing
(These prices are Annual term paid annually. Reminder that annually paid monthly licenses are a 5% premium, and month-to-month are a 20% premium)
| Product |
Current Price |
New Price |
Increase |
| M365 Business Basic |
$6.00 |
$7.00 |
+17% |
| M365 Business Standard |
$12.50 |
$14.00 |
+12% |
| Office 365 E3 |
$23.00 |
$26.00 |
+13% |
| M365 E3 |
$36.00 |
$39.00 |
+8% |
| M365 E5 |
$57.00 |
$60.00 |
+5% |
M365 Business Premium ($22.00) and Office 365 E1 ($10.00) are not changing at this time.
How This Affects Your Customers by License Type
- Annual (paid annually) — Protected at their current price until their renewal date. July 1 is not an immediate billing event for these customers, but you should identify anyone renewing in the next 90 days and set expectations before that date arrives.
- Annual (paid monthly) — Still committed to their term, but billed each month. The increase applies at renewal, not mid-term. These customers may not realize they're in a committed term, so it's worth confirming that with them proactively so there are no surprises when renewal hits.
- Month-to-month — No term protection. These customers will see the increase on July 1 regardless of when they started. This is your highest-priority group for outreach.
What You Need to Do
- Segment your customer base now. Sort by license type and renewal date. Month-to-month customers need a heads-up first; annual customers need their renewal dates flagged.
- Decide if you want to outline what the price increase is: The template does have the pricing increases listed, but if you would like to leave it out, feel free.
- Notify your customers before July 1. Proactive communication protects the relationship. A surprise on an invoice is harder to recover from than a heads-up letter.
- Review annual term enforcement. Microsoft has signaled they will begin enforcing annual terms going forward. Any customer who needs flexibility to reduce seat counts mid-year should be moved to month-to-month now — that option carries roughly a 20% premium above the new list prices, so have that conversation early.
Download and use the ready-to-use customer notification template below to make this easy. Just fill in the customer name, your company name, and your contact details, then send.
⬇ DOWNLOAD CUSTOMER NOTIFICATION TEMPLATE
Reach out if you have questions.
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