Microsoft has confirmed upcoming pricing and packaging changes to its commercial Microsoft 365 suites, effective 1 July 2026. These changes will apply to new subscriptions and renewals from that date.
While final pricing will be confirmed closer to July, Microsoft has signalled price increases across several Microsoft 365 offerings, including Business, Enterprise, Frontline, and selected standalone components. Organisations renewing or starting new agreements from July should expect higher costs compared to current pricing.
What this means for New Zealand businesses
For many organisations, licensing renewals take place months in advance. Microsoft has indicated that renewal discussions can successfully start up to three months ahead, creating an opportunity to:
- Lock in current pricing before July where possible
- Review existing Microsoft 365 subscriptions for suitability and value
- Consider optimisation or upgrades that better align with business needs
This update reinforces the importance of active licence management, particularly at a time when Microsoft continues to increase investment in security and AI-driven capabilities across the Microsoft 365 platform.
Opportunity to review value and reduce waste
In our experience, many organisations are not using the full capabilities of the licences they pay for. With pricing increasing, now is an ideal time to:
- Identify unused or underutilised Microsoft 365 licences (check your monthly reports for the license usage information)
- Right-size subscriptions based on actual usage
- Ensure built-in security features (already included in many plans) are correctly configured
- Assess whether higher-tier licences deliver a clear return on investment
A structured licence review can often offset some or all of the impact of price increases through optimisation alone.
Next steps
If your Microsoft 365 subscriptions are due for renewal in the second half of 2026, we recommend starting a conversation early. Proactive planning provides more flexibility, better commercial outcomes, and avoids last‑minute surprises.
If you’d like help reviewing your Microsoft 365 environment, subscription mix, or renewal options, the OutSource team is here to help.
Here’s what we are expecting. The good news is that Business Premium, our most commonly used subscription, looks like it will be unchanged in this price review.
| “Commercial” % increase | NFP % increase | |
| Microsoft 365 Business Basic | 16% | N/A (free) |
| Microsoft 365 Business Standard | 12% | 17% |
| Microsoft 365 Business Premium | 0% | 0% |
| Microsoft 365 Business Basic (No Teams) | 23% | N/A |
| Microsoft 365 Business Standard (No Teams) | 16% | N/A |
| Microsoft 365 Business Premium (No Teams) | 0% | N/A |
| “Commercial” % increase | NFP % increase | |
| Office 365 E1 | 0% | 0% |
| Office 365 E3 | 13% | 13% |
| Office 365 E5 | 8% | 8% |
| Microsoft 365 E3 | 8% | 8% |
| Microsoft 365 E5 | 5% | 5% |