Microsoft’s commercial pricing changes took effect on July 1, 2026, and most Microsoft 365 business plans went up. If your renewal hasn’t hit yet, now is the time to look at what you’re actually paying for and whether you’re on the right plan before the new pricing locks in.
Here’s what changed, who it affects, and what to check before your next renewal notice shows up.
What Changed on July 1
Microsoft raised prices across most of its commercial Microsoft 365 lineup as part of a global update announced in December 2025. The increases vary by plan. Business Basic went up roughly 17 percent and Business Standard rose about 12 percent. Enterprise plans saw smaller but still meaningful jumps, from around 5 percent on E5 up to 13 percent on E3, and frontline worker plans took the steepest hits, in some cases over 40 percent.
If you’re a Boston-area small business running Basic or Standard for a handful of employees, that percentage adds up fast once you multiply it across every seat.
Business Premium Is the Exception
The one plan that didn’t move is Microsoft 365 Business Premium, along with Office 365 E1. Microsoft held Premium flat while raising nearly everything around it, which narrows the price gap between Standard and Premium considerably. Premium also comes with meaningfully more: Intune for device management, Microsoft Defender for Business, and Entra ID conditional access, the kind of security layer most small businesses need if they’re working toward a cyber insurance requirement or a client’s vendor security questionnaire.
Microsoft is also doubling mailbox storage across all three Business tiers from 50GB to 100GB per user, rolling out through the summer with full completion expected by August 2026. That’s a real benefit, but it doesn’t offset a 17 percent increase on its own.
Existing Customers Get a Grace Period
If you’re already under contract, you’re not paying the new rate immediately. Microsoft is honoring current pricing until your next renewal date after July 1, 2026. That means a business renewing in September pays the old rate through that renewal cycle, then moves to the new pricing at the following one. If your renewal is coming up in the next few months, locking in a longer term before that date can buy you time at the old rate.
What This Means for a Typical Boston Small Business
Say you run a 25-person professional services firm in Newton on Business Standard. A 12 percent increase across 25 seats is a real line-item change to your annual software budget, not a rounding error. But before you just accept the new invoice, it’s worth asking whether Standard is still the right plan.
If your team handles client data, works with regulated information, or you’ve been meaning to tighten up device security and MFA enforcement, moving to Premium might now cost close to the same as staying on Standard, while adding the security tooling you’d otherwise have to buy separately or go without. For a lot of SMBs we work with, that math has flipped in Premium’s favor for the first time.
What to Do Before Your Renewal
- Pull your current Microsoft 365 invoice and confirm exactly which plan and seat count you’re on.
- Check your renewal date. If it’s within the next 60 to 90 days, decide now whether to renew as-is or switch tiers, since a plan change is easier to do before an auto-renewal processes than after.
- Compare the new Standard price against Premium. With the gap narrower, Premium’s built-in device management and Defender coverage may be worth the difference.
- If you’re on Basic, ask whether Standard or Premium actually fits how your team works now, especially if you’ve added desktop apps, more storage, or security requirements since you first signed up.
- Don’t assume auto-renewal will flag any of this for you. It won’t.
None of this requires an overhaul. It just means treating a licensing renewal like the budget decision it is instead of letting it happen automatically at whatever tier you signed up for years ago.
Paying more for Microsoft 365 than you expected? Boston Managed IT will review your current licensing and tell you plainly whether you’re overpaying, underprotected, or both. Get a free 15-minute review: call (617) 322-5155 or book at bostonmit.com/contact.
— Boston Managed IT
