On December 4, 2025, Microsoft announced a global price and packaging update for Microsoft 365 commercial plans. The new prices take effect July 1, 2026. For most Las Vegas small and mid-sized businesses, this means a 5–16% increase on the plans you’re probably using.
But there’s an important detail that most coverage of this announcement is burying: existing customers stay on current pricing until your renewal. If your subscription renews in June 2026, you’ll pay the old price for another full year. If it renews in July, you’ll pay the new price starting then.
That detail matters more than the increase itself. Here’s what’s actually changing, what it means for SMB plans specifically, and what you should be doing in the next six weeks.
What’s Changing on July 1, 2026
The increases apply to most commercial Microsoft 365 and Office 365 suites. The plans most commonly used by Las Vegas SMBs are getting hit at different rates:
| Plan | Current | New (Jul 1, 2026) | Change |
|---|---|---|---|
| Microsoft 365 Business Basic | $6.00 | $7.00 | +16% |
| Microsoft 365 Business Standard | $12.50 | $14.00 | +12% |
| Microsoft 365 Business Premium | $22.00 | $22.00 | No change |
| Office 365 E3 | $23.00 | $26.00 | +13% |
| Microsoft 365 E3 | $36.00 | $39.00 | +8% |
| Microsoft 365 Apps for Business | $8.25 | $10.00 | +21% |
A few things worth noting:
Business Premium didn’t go up. That’s the headline that gets lost in a “Microsoft raising prices” narrative. Premium stayed at $22/user/month while Basic and Standard went up.
Standalone Apps for Business went up the most (+21%). If your team is on Apps for Business specifically — meaning you have desktop Word/Excel/PowerPoint but no Exchange/Teams email — your cost is jumping from $8.25 to $10.00.
Frontline plans (F1, F3) jumped 25–43%. These are the cheap “deskless worker” plans. If you’re using F1 or F3 for any portion of your workforce, the percentage increase is the largest in the entire announcement, even though the absolute dollars are small.
What You’re Also Getting (the Packaging Update)
Microsoft is bundling new features into the existing plans, not just raising prices. Most relevant for SMBs:
- Business Basic and Standard gain 50 GB additional email storage, URL time-of-click protection (a Defender feature), and Copilot Chat enhancements (Word, Excel, and PowerPoint agents plus inbox awareness).
- Business Premium gains the 50 GB email and Copilot Chat enhancements with no price change.
- Office 365 E3 and Microsoft 365 E3 gain Microsoft Defender for Office Plan 1, previously a paid add-on. Microsoft 365 E3 additionally gains Intune Remote Help, Intune Advanced Analytics, and Intune Plan 2.
For some customers, the packaging changes are worth more than the price increase costs. For others, they’re features you’ll never use. Whether the net is a “good deal” depends entirely on what you were paying for separately before.
The Standard vs. Premium Calculation Just Shifted
If you’re on Business Standard and you also pay separately for Microsoft Defender for Office, Intune, or other security and management add-ons, the new pricing changes the math.
Before July 2026: Business Standard at $12.50 plus various add-ons was usually cheaper than Premium at $22 for most SMB configurations.
After July 2026: Business Standard at $14 plus the same add-ons may now exceed Business Premium’s $22 — especially if you’re paying for any combination of Defender, Intune, or Conditional Access separately.
For some businesses, consolidating to Premium will now be cheaper than staying on Standard plus add-ons. For others, it still won’t be. The answer depends on what specific add-ons you’re paying for and how many users you have on each.
The point isn’t that everyone should upgrade to Premium. The point is this is the moment to actually do the math, because the math has changed.
What You Should Be Doing in the Next Six Weeks
Three concrete things before July 1:
- Find out exactly when your subscription renews. If your renewal falls in June 2026, you can lock in the current pricing for another full year by renewing on time. If it falls in July or later, you’ll be on the new pricing whether you renew early or not. Microsoft’s policy is “existing customers remain on current pricing until renewal” — there’s no grandfathering past your normal renewal date. This isn’t a “rush to renew now” tactic. It’s a “find out which side of the date you’re on” check.
- Audit what you’re actually using. Most SMBs are paying for more Microsoft 365 capability than they use. Common patterns: employees on E3 who only use Outlook and Word; Business Premium licenses where Intune was never configured; Apps for Business licenses for staff who already have Business Standard elsewhere; lingering F1 or F3 licenses for employees who left. A license audit before renewal — counting what’s assigned vs. what’s actually being used — usually surfaces enough unused capacity to offset some or all of the increase. The Microsoft Admin Center’s licensing reports show this directly under Reports → Usage.
- Compare your current plan plus add-ons against Business Premium. For most businesses on Business Standard who also pay for Defender, Intune, Conditional Access, or Microsoft 365 Apps separately, the post-July math may favor consolidating to Business Premium. Run the per-user total of “Standard plus your add-ons” against “Premium” and see where the line sits for your specific configuration. If you’re already on Business Premium, the math just got better for you — same price, more features.
What’s Not Changing
A few things to be clear about, because pricing announcements often get exaggerated:
- Existing subscriptions don’t change mid-term. If your renewal isn’t until February 2027, you’re paying current prices until February 2027.
- Microsoft Teams standalone and Microsoft 365 Copilot are not included in this update. Their pricing is unchanged.
- The “no Teams” variants (Business Standard without Teams, E3 without Teams, etc.) are also going up by similar percentages, so the no-Teams path doesn’t avoid the increase.
- Educational and nonprofit pricing also goes up, but at lower absolute dollars (nonprofits have 60–75% discount rates that scale with commercial pricing).
The Bigger Context
This is the second meaningful Microsoft 365 price increase since 2022. The pattern is consistent: Microsoft adds capability to the platform (much of it AI-related), uses that as the justification for bundling features into existing tiers, and raises prices alongside.
For most SMBs, the practical impact will be 5–15% on your annual Microsoft 365 bill, depending on which plan you’re on. For a 10-person business on Business Standard, that’s roughly an extra $180/year. For a 50-person business on E3, it’s roughly $1,800/year. Real money, not catastrophic.
The bigger question — and one worth thinking about beyond just this announcement — is whether your current Microsoft 365 plan still matches what your business actually does. Plans get bought once, used for years, and rarely reviewed. The July 1 effective date is a natural forcing function to do that review now, while you have time to act on whatever you find.
Source: Microsoft 365 Pricing and Packaging Updates — Microsoft Licensing Resources
Brydan Solutions is a Microsoft Cloud Solution Provider. We manage Microsoft 365 environments for businesses across Nevada — including licensing audits, plan recommendations, and renewal timing. If you want to know exactly where you stand before July 1, start with a conversation.