On December 4th, Microsoft announced feature enhancements coming to specific Microsoft 365 products—along with price increases. Before you focus on the price tag, let’s look at what you’re actually getting. Some of these changes might save you money by eliminating add-ons you’re paying for today.
When Does This Hit Your Budget?
The price increases take effect when your subscriptions renew on or after July 1, 2026. This is the first commercial price increase on these products in over four years. Three market segments are affected: Commercial, Nonprofit (which is tied to Commercial pricing), and Government. I haven’t seen anything indicating Education is affected.
What You’re Getting
The M365 Business products (Basic, Standard, and Premium) currently have 50GB mailboxes. Sometimes that’s not enough, forcing you to purchase Exchange Online Plan 2 licenses for users who need more space. With these changes, Business products will include 100GB primary mailboxes. If you’re paying for Exchange Online Plan 2 just for storage, you may be able to drop those licenses.
Microsoft Defender for Office 365 Plan 1 (MDO P1) is being included in Office 365 E3 and Microsoft 365 E3. This has always felt like a gap to me—M365 Business Premium includes it, and M365 E5 includes Plan 2, but E3 customers had to buy it separately. MDO P1 provides attachment and link checking, plus anti-phishing protection. Importantly, it protects not just email but also documents in Teams, OneDrive, and SharePoint.
If you’re using a third-party email security service like Proofpoint or Mimecast, this is worth re-evaluating. Those services protect email, but MDO extends protection across your collaboration tools. For a modest price increase, you might be able to consolidate your security spend.
The Business Basic, Business Standard, and Office 365 E1 products will also get SafeLinks Lite, which checks URLs at the time you click them—a meaningful security improvement for those entry-level products.
These are just the highlights I wanted to cover first. Microsoft is also rolling out Copilot Chat enhancements, additional Intune capabilities, Security Copilot for E5 customers, and more. I’ll dig into those in future posts.
Source: Microsoft 365 Blog
One Criticism
Microsoft says they’re “sharing these updates now to give customers ample time to plan.” That’s fair—you’re getting seven months’ notice. But announcing this in December, when most organizations have already finalized their calendar-year budgets, means a scramble to figure out when these increases will hit and adjust accordingly. Work with your IT partner to pull those renewal dates and build the numbers into next year’s planning.
A Strategy to Delay the Increase
If you purchase through a Cloud Solution Provider (CSP) partner, there’s a way to push back the price increase. Subscriptions keep their pricing for the full term—added licenses get added at the price in effect when the subscription started.
Here’s an example: Say you have 50 licenses of M365 E3 that renew July 1st—the first day of the increase. Your partner could start a new subscription for just one license on June 30th at the current price. Let the old subscription expire on July 1st, then increase the new subscription to 50 licenses. That one-day prorated charge of about $1.30 saves you roughly $150 per month for the next year. Talk to your CSP partner about whether this makes sense for your situation.
Bottom Line
Microsoft is adding genuine security and productivity value across the product line—more than I could cover in one post. The features I highlighted here address real gaps and might offset costs you’re already paying. Review your current licensing with your partner, look for add-ons that are becoming native features, and make a plan before July.
Until next time.
Matthew