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Microsoft announced a global pricing and packaging update for Microsoft 365 and related commercial suites, effective 1 July 2026.
This includes list price increases across Enterprise, Business, and Frontline suites, both with Teams and without Teams as part of a standard annual adjustment cycle.
These increases are separate from the Teams-optional changes and reflect typical annual price adjustments as Microsoft adds services, security, and management capabilities.
2026 sees price adjustments across many Microsoft 365 SKUs effective July 1, meaning your budget should factor in higher subscription costs.
| Suite | Plans Affected | Price Impact | Notes |
|---|---|---|---|
Enterprise |
Office 365 E3 / E5 Microsoft 365 E3 / E5 |
5%–13% increase |
Part of Microsoft’s annual pricing and packaging adjustment cycle |
Business (SMB) |
Microsoft 365 Business Basic Microsoft 365 Business Standard |
Significant increase (varies by SKU) |
Applies globally to commercial customers |
Frontline |
Microsoft 365 F1 Microsoft 365 F3 |
Double-digit percentage increase |
Impacts frontline and shift-based workforce licensing |
In April 2026, Microsoft extended or rebalanced licensing entitlements so that certain advanced Teams and workplace capabilities are no longer restricted only to Premium licences.
Workspace, room and desk scheduling tools will be now available to users with Outlook, Teams calendar licenses, broadening your access beyond just Premium.
Formerly Shared Devices now supports managing multiple desks/spaces and advanced analytics.
Teams Enterprise users now get enhanced town hall/webinar capabilities (up to 3,000 interactive users + 10,000 view-only) without requiring Teams Premium, with optional attendee packs for larger events.
From the 1st April 2026, Microsoft has introduced attendee capacity packs for large-scale events hosted in Teams.
These capacity packs will allow you to scale events with 5,000+ attendees without every attendee needing a full Teams licence.
This isn’t a price increase per suite, but it has introduced a new way for your business to proactively scale your licenses and budgets if you hold large-scale events that previously required multiple Premium licences.
From the 1st April 2026:
Users with existing Premium licences can continue using high-capacity meeting/event limits (up to 100,000 participants) until the term ends.
Once the term expires, attendee packs are required for more than 3,000 attendees rather than Premium alone.
This means as soon as your Premium licence expires you will be required to purchase attendee packs if you hold large scale events with 3,000 + attendees.
This is the right time to review weather you need a Premium licence or not as you may be able to reduce your licence at thsi stage.
Microsoft is retiring the classic Teams Live Events feature on the 30th of June 2026.
This is being replaced it with a newer unified event experience that’s tightly integrated into the Teams events framework.
Customers with live events scheduled can still run them through 28 February 2027, but must plan for the transition.
Microsoft 365 now offers a Paid Extended Service Term (EST) option for certain commercial subscriptions that lapse or expire.
The Extended Service Term allows customers to temporarily extend an expired subscription instead of immediately losing access or being forced into a full renewal.
Previously, if your subscription expired and wasn’t renewed on time, your business risked:
Service suspension
Loss of admin access
Data retention countdown periods
Potential disruption to users
EST introduces a short-term paid extension window to maintain service continuity.
To use Microsoft’s EST you will be charged an approximat 3% premium above the standard subscription cost. (This applies during the extended period only).
This premium effectively acts as a late-renewal surcharge.
For finance and procurement teams, this means:
Missing renewal deadlines now carries a direct financial penalty
Budget approvals should be aligned ahead of renewal dates
Renewal tracking processes should be tightened
EST is helpful in emergencies but it should not replace structured renewal planning.
We understand that keeping up with ongoing changes to your Microsoft licences can feel frustrating and time-consuming.
The real question is…
At Syn-Star, we take the complexity out of Microsoft licensing. Our team proactively manages your licences to ensure everything is accurate, up to date, and cost-effective so you don’t have to worry about it.
Microsoft is enforcing mandatory multi-factor authentication (MFA) for all Microsoft 365 administrative roles beginning in 2026.
This applies to:
Global Admins
Application Admins
Billing Admins
Helpdesk/Admin roles
Any privileged Entra ID (Azure AD) roles
If MFA is not configured:
Admin access may be blocked
Sign-ins may fail under new enforcement policies
Conditional access policies may require updating
This enforcement strengthens Microsoft’s secure-by-default posture.
Many businesses still rely on:
Legacy authentication flows
Shared admin accounts
Basic authentication for automation scripts
Older service accounts without MFA
These setups will no longer meet Microsoft’s baseline security requirements.
Audit all admin accounts
Remove shared credentials
Implement individual named admin accounts
Enforce MFA with phishing-resistant methods (e.g., Authenticator app, FIDO2 keys)
Review conditional access policies
Failure to prepare could result in admin lockouts or service management disruption.
These audits are to ensure every user has the correct subscription on a regular basis as we understand that evolving business will update these on a ragular basis.
We ensure you’re always aligned with the latest licensing changes by regularly reviewing guidance set out by Microsfot ahead of time so you don’t have to.
Our QBR’s have been built as part of our fully managed IT Support package to ensure your IT spend is continuously aligned with your budget and business goals.
We provide content on new features, updates, and productivity enhancements giving your team access to our free learning centre platform where they can enhance their knowledge and take full advantage of the tools you already pay for.
Your team can also request content they need on our platform.
You never have to worry about expiring cards or missed renewals because we handle everything on your behalf.
We support hundreds of UK businesses, managing their entire Microsoft 365 environment and ensuring their licensing remains compliant, optimised, and cost-efficient.
Book a Free Online IT Review with Our Team.
We’ll show you where improvements can be made and how we compare with no obligation.
Microsoft is rolling out its biggest licensing changes in years which will affect nearly every Microsoft 365 and Teams user worldwide. From new “Teams-optional” suites to billing term surcharges and Teams Phone price adjustments, understanding what’s changing will help your business budget accurately and stay compliant.
Let’s unpack what’s coming by the end of 2025 and into 2026.
Starting on the 1st of November 2025, Microsoft 365 and Office 365 customers will be able to choose between two options including:
This change aligns with Microsoft’s global commitment to provide fairer competition and interoperability originally developed for the European Economic Area (EEA) and now rolling out worldwide.
New enterprise customers can pick “no Teams” suites and buy Teams separately if needed.
Existing customers can continue renewing current suites that already include Teams.
Microsoft will maintain a fixed price delta the “no Teams” versions will cost less than their Teams-included counterparts.
Starting 1 November 2025, new customers worldwide will once again be able to purchase the enterprise versions of Microsoft 365 and Office 365 with Microsoft Teams included (i.e., bundled suites), in addition to the existing “without Teams” versions.
The licensing structure will include a fixed minimum price difference (“delta”) between versions “with Teams” and “without Teams”. For example:
£6.90 per user/month
(M365 E3/E5, Office 365 E3/E5)
£2.60 per user/month
Standard/Premium/Office 365 E1 etc.
£0.85 per user/month
M365 F3 (no Teams) version vs Teams-included version.
(typically lower cost) to reflect the “no Teams” option and the delta.
Those who already have multi-year contracts in the EEA will have guarantees, these guarantees give you the ability to transition from “with Teams” to “no Teams” at their annual order period for up to five years) and to receive equivalent discounts for both options.
The changes are part of Microsoft’s commitments to the European Commission around competition, interoperability, and data portability across collaboration platforms.
From the 1st of April 2025, Microsoft introduced a 5 % surcharge for customers paying monthly on an annual-commit subscription.
If you prefer monthly billing for cash-flow reasons, this could slightly raise your coss overall for this subscription.
Additionally, certain products like Teams Phone and Power BI will see targeted price adjustments (notably this change was implemented in July 2025 for US Government customers, with broader changes expected for everyone else later).
Stay compliant and cost-efficient with this free download to help guide your Licence infrastructure.
If you have alternative communication tools, you could reduce your costs by choosing the “no teams” subscription option, you should also review your billing options as monthly billing now ads a 5% monthly surcharge which could be avoided with better pre-planning.
By completing a full audit of your teams licences you can determine which users truly need which licences and reduce costs by streamlining this to match your teams needs.
By evaluating what other systems you already have in place and utilising the “no teams” option a well as the teams standalone option you may be able to cut costs.
Once you have completed a full audit of your teams access you will be in a better position to sign up for annual subscriptions with the knowledge that your entire team have the tools they need to do what they do best without the need for overspending on unneeded licences, you can then feel at ease to enter into an annual subscription and reduce your overall spend if you have no plans to move away.
By working with a certified Microsoft partner like us, you can ensure your audits are completed correctly and that you have an expert on your side to pinpoint key areas of improvement and cost savings.
By pre planning for these upcoming Microsoft licence changes you can update your internal budget and ensure going forward your procurement policies are inline with these checks.
Get a tailored audit of your M365 & Teams usage.
In 2026, organisations are dealing with:
Global list price increases effective 1 July 2026
Continued rollout of “Teams included” and “Teams without” suite options
New event attendee licensing models for large Teams webinars
Retirement of legacy Teams Live Events
Operational changes like Paid Extended Service Term (EST) and mandatory MFA enforcement for admin accounts
These updates affect pricing, billing structure, feature access, and security compliance.
Yes. Since November 2025, Microsoft offers both:
Suites that include Teams
Lower-cost suites without Teams
You can also purchase Teams as a standalone licence if needed.
Price increases vary by SKU, but:
Enterprise plans (E3/E5) increased approximately 5–13% (USD list pricing)
Business plans (Basic/Standard) saw notable increases
Frontline licences (F1/F3) experienced double-digit percentage rises
Exact impact depends on region, billing term, and agreement type.
If you are on an annual-commit subscription but choose to pay monthly instead of annually upfront, Microsoft applies a 5% premium.
Switching to annual upfront billing can reduce total annual costs.
The Extended Service Term allows organisations to temporarily extend an expired Microsoft 365 subscription at roughly a 3% premium.
It prevents sudden service disruption but should not replace proper renewal planning.
Not necessarily.
Microsoft introduced attendee capacity packs for larger events. Many enterprise users can now host town halls and webinars without Teams Premium, depending on attendee size.
Premium is still required for certain advanced capabilities and very large-scale events.
Yes. Classic Teams Live Events are being retired in 2026 and replaced with a new unified Teams events experience.
Organisations using Live Events should plan their transition strategy.
Yes. Microsoft is enforcing mandatory multi-factor authentication for all administrative roles.
Organisations that rely on shared accounts or legacy authentication must update their access policies to avoid admin lockouts.
Yes if your organisation uses another collaboration platform or only certain users require Teams.
However, a licence audit is recommended to ensure savings are real and not offset by standalone add-ons.
You may be overspending if:
Inactive users still hold licences
Teams Phone is assigned but unused
Users are on E5 when E3 would suffice
You’re paying monthly under annual commit
You haven’t reviewed licensing in the past 12 months
A structured licence audit typically uncovers optimisation opportunities.
To meet global regulatory commitments and offer more flexibility for customers who use different collaboration tools.
No. Existing customers can keep renewing current “with Teams” suites unless they choose to switch.
Starting April 2025, customers on annual-commit plans who pay monthly will pay 5 % more than those paying annually upfront.
Yes, Teams will be offered as a standalone licence if you choose a “no Teams” suite.
The key date is 1 November 2025, when Teams-optional suites become available worldwide.
The key date is 1 November 2025, when Teams-optional suites become available worldwide.
Giles Cleverley founded Syn-Star in 2002 shortly after graduating from Portsmouth university with an honours degree in Business & Economics.
His extensive knowledge and experience in IT strategy and business technology solutions. He is passionate about driving innovation and delivering tailored IT support that helps UK small and medium size businesses thrive. Under his leadership, Syn-Star continues to provide cutting-edge managed IT services designed to meet the evolving needs of modern organisations.
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