Microsoft has announced upcoming pricing changes and expanded capabilities across Microsoft 365, effective July 1, 2026. These updates reflect continued investment in artificial intelligence (AI), security, and device management tools designed to help organizations manage growing IT complexity and security risk.
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Update to Pricing Effective July 1st, 2026
Microsoft 365 Copilot Business Launch & Special Pricing for Small and Mid-Sized Businesses
What's New
Microsoft is expanding access to advanced features across many Microsoft 365 plans, bringing more built-in value to customers.
Key enhancements include:
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Copilot Chat: Secure AI-powered chat integrated directly into Word, Excel, PowerPoint, Outlook, and OneNote. IT administrators gain enterprise-grade controls to manage how Copilot Chat is used within their environment.
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Enhanced Security Protections: Microsoft Defender for Office 365 Plan 1 capabilities are being added to Office 365 E3 and Microsoft 365 E3 plans, strengthening protection against phishing, malware, and malicious links. URL protection is also being extended to Office 365 E1, Business Basic, and Business Standard.
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Improved Endpoint Management: New Microsoft Intune features are being added to E3 and E5 plans to help IT teams detect device issues faster, enforce security policies, and keep endpoints compliant and productive.
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Security Copilot Agents: AI-powered security assistants embedded into Microsoft Defender, Entra, Intune, and Purview. These tools help security teams identify threats, investigate incidents, and respond more efficiently. Security Copilot will be enabled for E5 customers following a 30-day advance notice.
Update to Pricing Effective July 1st, 2026
Microsoft will update list pricing globally, with localized adjustments by market. Nonprofit pricing will be updated in alignment with commercial plans.
New monthly list prices (USD):
- Microsoft 365 Business Basic: $6 → $7
- Microsoft 365 Business Standard: $12.50 → $14
- 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
Why This Matters
These changes reflect Microsoft’s ongoing investment in AI-driven productivity, stronger security controls, and improved device management, all areas where organizations are facing increased pressure. While pricing is increasing, many plans now include capabilities that previously required add-on licensing.
Understanding what’s included (and whether it’s relevant to your organization) is key to ensuring you’re getting value—not just absorbing cost increases. It is very important to get a licensing assessment before signing your next agreement.
Impact on Ascend Clients
For Ascend clients, this update is an opportunity to reassess licensing alignment:
- Are you paying for features you don’t use?
- Are you missing security or management capabilities now included in your plan?
- Would a different license mix better support your users and budget?
Our team can help you evaluate whether your current Microsoft 365 plans still make sense or if adjustments could better align with how your organization actually works.
Recommended Next Steps
- Review your current Microsoft 365 licenses and feature usage
- Identify which new capabilities apply to your organization
- Plan for pricing changes ahead of the July 2026 effective date
- Consider right-sizing licenses to balance cost and value
Contact our team for a licensing assessment and we can help you do all of that!
Microsoft 365 Copilot Business Launch & Special Pricing for Small and Mid-Sized Businesses
Microsoft has officially launched Microsoft 365 Copilot Business, bringing AI-powered productivity tools to small and mid-sized businesses (SMBs) in a more accessible and cost-effective way. The product became generally available on December 1, 2025.
Microsoft 365 Copilot Business delivers AI assistance directly inside Microsoft 365 apps—helping users draft content, analyze data, summarize information, and automate everyday tasks. It’s designed specifically for SMB environments and integrates securely with both work data and the web.
Standard pricing:
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$21 per user, per month
Limited-time introductory offer:
- $18 per user, per month (15% off) from December 1, 2025 through March 31, 2026
- Available for up to 300 licenses with a qualifying Microsoft 365 Business plan
Additional bundle discounts may apply when pairing Copilot Business with Microsoft 365 Business Standard or Business Premium or Microsoft Purview compliance capabilities.
Why This Matters
Copilot Business lowers the barrier to entry for AI-powered productivity. For many SMBs, this means access to tools that can:
- Reduce time spent on repetitive tasks
- Improve content creation and data analysis
- Help teams work more efficiently without adding headcount
With promotional pricing available for a limited time, organizations have a window to explore Copilot’s value with reduced upfront cost.
Key Capabilities:
- AI-powered chat connected to your Microsoft 365 work data and the web
- Advanced search across emails, documents, and business applications using built-in connectors
- AI-generated images, banners, posters, and videos aligned with your brand
Impact on Ascend Clients
For Ascend clients evaluating AI adoption, Copilot Business offers a practical starting point, especially for organizations already using Microsoft 365 Business plans. However, successful adoption depends on data readiness, security configuration, and user training.
Ascend helps ensure Copilot is deployed securely, responsibly, and in a way that delivers real value, not just novelty. Reach out to your Ascend rep to start planning for AI.
Recommended Next Steps
- Determine whether Copilot Business aligns with your team’s workflows
- Review data security and compliance readiness before enabling AI features
- Evaluate eligibility for promotional pricing
- Plan a pilot or phased rollout to measure impact
- Contact your Ascend Microsoft team to discuss Copilot readiness and licensing options
Sources:
https://www.microsoft.com/en-us/microsoft-365-copilot/pricing
https://techcommunity.microsoft.com/blog/Microsoft365CopilotBlog/introducing-microsoft-365-copilot-business-empowering-small-and-medium-businesse/4469700
Ascend Can Help
Whether you’re navigating licensing changes, planning for upcoming pricing updates, evaluating Copilot adoption, or preparing for operating system upgrades, Ascend is here to support you with practical guidance and hands-on help. We’ll meet you where you are, answer your questions honestly, and help you take the next right step—no pressure, no unnecessary complexity.
If you’d like to review how any of these updates apply to your environment, or want help planning ahead, reach out to your Ascend Microsoft team. We’re always happy to help.
FAQ
WHAT ARE THE MOST IMPORTANT MICROSOFT UPDATES BUSINESSES SHOULD KNOW ABOUT RIGHT NOW?
Recent Microsoft updates include changes to Teams Phone licensing, new verification requirements for phone numbers, expanded Microsoft 365 security and AI capabilities, upcoming pricing changes effective in 2026, and end-of-support milestones for Windows 10 and Windows Server 2016. These updates can impact licensing costs, security posture, and daily operations, making proactive planning important.
Check out our December 2025 update and subscribe to our monthly newsletter to stay up to date.
ARE MICROSOFT 365 PRICES INCREASING IN 2026?
Yes. Microsoft announced global pricing updates for several Microsoft 365 plans effective July 1, 2026. While prices are increasing, many plans now include additional AI, security, and management features that were previously add-ons. Reviewing your current license mix can help ensure you’re paying for the capabilities your organization actually uses.
WHICH MICROSOFT 365 PLANS ARE AFFECTED BY THE 2026 PRICING CHANGES?
Pricing updates apply to multiple plans, including Microsoft 365 Business Basic, Business Standard, Office 365 E3, Microsoft 365 E3, Microsoft 365 E5, and frontline worker plans (F1 and F3). Changes apply globally, with regional adjustments, and nonprofit pricing will be updated accordingly.
WHY IS MICROSOFT INCREASING MICROSOFT 365 PRICING?
Microsoft is investing heavily in AI capabilities, advanced security protections, and endpoint management features across Microsoft 365. The pricing updates reflect the expanded functionality now built into these plans, particularly around Copilot, security, and compliance.
WHAT IS MICROSOFT 365 COPILOT BUSINESS, AND WHO IS IT FOR?
Microsoft 365 Copilot Business is an AI-powered assistant designed for small and mid-sized businesses. It integrates directly into Microsoft 365 apps like Word, Excel, Outlook, and Teams to help users draft content, analyze data, summarize information, and automate tasks—while maintaining enterprise-grade security and compliance.
HOW MUCH DOES MICROSOFT 365 COPILOT BUSINESS COST?
The standard price for Microsoft 365 Copilot Business is $21 per user, per month. For a limited time, eligible customers can receive 15% off ($18 per user per month) through March 31, 2026, for up to 300 licenses with a qualifying Microsoft 365 Business plan.
WHO IS ELIGIBLE FOR COPILOT BUSINESS PROMOTIONAL PRICING?
Eligible small and mid-sized businesses with qualifying Microsoft 365 Business plans may take advantage of promotional pricing between December 1, 2025 and March 31, 2026. Additional discounts may be available when bundling Copilot Business with select Microsoft 365 or compliance offerings.
HOW SHOULD ORGANIZATIONS PREPARE FOR MICROSOFT 365 PRICING CHANGES?
Organizations should review current license usage, identify which new features are relevant, and plan ahead for the July 2026 pricing changes. A licensing review can help ensure you’re aligned with your actual needs and not paying for unused capabilities.
CAN ASCEND HELP US EVALUATE MICROSOFT 365 PRICING CHANGES AND COPILOT ADOPTION?
Yes. Ascend helps organizations review Microsoft 365 licensing, plan for upcoming pricing changes, and evaluate whether Copilot Business is a good fit. We focus on practical guidance—helping you understand what’s changing and how it applies to your business.
Just reach out—we’re here to help.