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Microsoft Price Increase Annoucement - 2026

Microsoft Licensing Update: Price increase is here – Here’s What You Need to Know

Microsoft 365 Pricing Update 2026: What Australian Businesses Need to Know

If your business relies on monthly billing for your Microsoft subscriptions, this change will increase your costs at renewal.

Microsoft has recently announced a significant update to its Microsoft 365 commercial licensing pricing, with changes taking effect from 1 July 2026 for new subscriptions and at the next renewal date for existing customers. According to Microsoft’s announcement, the pricing adjustments impact many Microsoft 365 Business, Enterprise, Frontline, Windows, Entra, and EMS subscriptions. Existing customers generally retain their current pricing until their next renewal cycle.
 
For Australian businesses relying on Microsoft 365 for email, collaboration, security, and productivity, it’s important to understand how these changes may affect IT budgets moving forward.
 
Why Is Microsoft Increasing Prices?

Microsoft states that the increase reflects the substantial enhancements delivered across the Microsoft 365 ecosystem over the past several years, including:

  • Expanded cybersecurity and threat protection capabilities
  • Enhanced device management and compliance features
  • Improvements to Microsoft Intune and identity security
  • Additional AI-powered productivity tools and Copilot-related functionality
  • Ongoing investments in cloud infrastructure and platform innovation

Microsoft indicates that these updates are intended to align pricing more closely with the increased value now included within Microsoft 365 subscriptions.

Which Microsoft 365 Plans Are Affected?

The pricing changes impact most commercial Microsoft 365 offerings, including:

Business Plans

  • Microsoft 365 Business Basic
  • Microsoft 365 Business Standard
  • Microsoft 365 Apps for Business

Enterprise Plans

  • Office 365 E3 and E5
  • Microsoft 365 E3 and E5
  • Microsoft 365 Apps for Enterprise

Frontline Worker Plans

  • Microsoft 365 F1
  • Microsoft 365 F3

Additional Services

  • Microsoft Entra ID Plan 1 and Plan 2
  • Enterprise Mobility + Security (EMS)
  • Windows Enterprise licensing
  • Various government and frontline licensing equivalents

Microsoft has indicated that some products, such as certain Copilot and standalone Teams subscriptions, are not included in this particular pricing update.

How Twenty35 IT Is Responding

At Twenty35 IT, we remain committed to transparency and ensuring our clients receive the best value from their Microsoft investment.

We understand that subscription price increases can impact operational budgets, particularly for small and medium businesses. Our team will be working closely with customers to:

  • Review current licensing requirements
  • Identify opportunities to optimise licensing costs
  • Remove unused or unnecessary licences
  • Ensure organisations are taking advantage of the security and productivity features included in their subscriptions
  • Provide advance notice of any pricing changes affecting existing services

As always, we do not increase licensing prices beyond the costs imposed by Microsoft and our authorised distributors. Our goal is to help clients maximise value while maintaining a secure and productive Microsoft 365 environment.

Need assistance? Call us on 1300 381 723

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