Microsoft 365 Price Increases July 2026: How to Audit & Optimize Your Licensing Now

Important Update: Microsoft is increasing prices on many Microsoft 365 commercial plans effective July 1, 2026. Customers who renew before this date can often lock in current rates for another year.

This is the perfect time to conduct a thorough licensing audit and optimization project.

What’s Changing?

Microsoft has announced price adjustments across Business, Enterprise, and Frontline suites, as well as several add-ons. New capabilities are also being introduced in some plans, including enhanced security and Copilot features.

The biggest opportunities for savings usually come from:

• Removing unused or underutilized licenses
• Downgrading users who don’t need premium features
• Consolidating add-ons into higher-tier bundles where it makes financial sense
• Evaluating the new Microsoft 365 Business with Copilot SKUs for appropriate users

Step-by-Step Licensing Optimization Process

1. Run a Complete License Inventory

Use the Microsoft 365 Admin Center + PowerShell to answer:

• How many of each license type do we own vs. how many are assigned?
• Which users have E5 but only use basic email and Teams?
• Are there duplicate or conflicting licenses assigned?
• Which add-ons (Audio Conferencing, Phone System, Defender, etc.) are actually being used?

2. Analyze Usage with Microsoft 365 Adoption Analytics & Reports

Look at:

• Last login/activity dates
• Feature usage (OneDrive storage consumed, Teams meeting participation, SharePoint activity)
• Mobile vs desktop usage patterns

This data often reveals users who can safely move to lower-cost plans.

3. Map Licenses to Actual Job Functions

Create simple personas:

• Frontline / Task workers — Often well served by F1/F3 or Business Basic
• Information workers — Typically need Business Standard/Premium or E3
• Power users / Executives — May justify E5 or E3 + specific add-ons
• Developers / Power Platform users — Evaluate Power Platform add-ons vs full E5

4. Evaluate New Copilot Business Offerings

Microsoft introduced new SKUs with Copilot built-in targeted at SMBs. Determine:

• Which users would gain real productivity value from Copilot?
• Does the incremental cost justify the benefit for specific roles?
• Are there governance and security controls in place before rolling out Copilot widely?

5. Model "What If" Scenarios

Build a simple spreadsheet comparing:

• Current monthly/annual spend
• Optimized scenario (right-sized licenses)
• Optimized + selective Copilot deployment
• Impact of renewing before vs after July 1

Quick Wins Most Organizations Find

• Reclaim unused licenses sitting on departed employees or contractors
• Move light email-only users from E3/E5 to Business Basic or Exchange Online Plan 1
• Replace standalone Audio Conferencing licenses with Teams Phone add-ons where it makes sense
• Consolidate multiple small add-on purchases into suite licenses
• Review shared mailboxes and resource accounts (they often don’t need full licenses)

Governance: Prevent License Creep Going Forward

After optimization:

• Implement a license request/approval process
• Use group-based licensing in Entra ID
• Review license assignments quarterly
• Educate managers on the cost implications of license requests

Don’t Just Cut — Optimize for Value

The goal isn’t only to spend less. It’s to spend wisely so your team has the right tools while maintaining strong security and compliance.

Many organizations discover they can add Copilot for key users while still reducing overall spend through better right-sizing.

Get a Professional Licensing Assessment Before July 1

Our team can complete a full licensing audit, usage analysis, and optimization recommendation in a short engagement. We’ll deliver a clear before/after cost model and help you execute changes with minimal disruption.

Book your free licensing optimization consultation: Contact Accred Consulting

We’ll help you lock in savings before the price increase takes effect and position your tenant for the AI-powered future of Microsoft 365.

Frequently Asked Questions

If I renew my subscription before July 1, can I lock in current prices? In most cases, yes — renewing early often allows you to maintain current pricing for the renewal term. Confirm with your licensing partner or Microsoft.

Will downgrading licenses break anything? Usually not, if done carefully. We always validate feature usage first and have a rollback plan.

Should every user get Copilot? No. Copilot delivers the highest ROI for knowledge workers who spend significant time in documents, email, and meetings. Many frontline and task-based roles see less benefit.