On July 1, 2026, Microsoft is raising prices across most of its commercial 365 plans. Two of the three Business plans are going up. One isn’t.
For most small businesses in Maryland, the bigger question is whether you can avoid the increase. You can. There’s a short window before July 1 to lock in today’s rates for another 12 months.
What’s changing on July 1
Microsoft is increasing the price of two of its most popular Business plans. The third stays the same.
- Business Basic: going up around 17%
- Business Standard: going up 12%
- Business Premium: no change
Standalone Microsoft Teams and Copilot subscriptions are not affected. Existing customers stay on current pricing until their next renewal after July 1, so the date of your renewal determines when the new rate hits your invoice.
Microsoft is also rolling new capabilities into each plan between June and August, including more mailbox storage, expanded Copilot Chat features, and link protection in email. But for most businesses, the headline is the rate change.
How to lock in today’s rates
Microsoft’s annual commitment lets SMBs on Business Basic or Business Standard freeze current rates for another 12 months, but only if signed before July 1.
A Business Standard customer who signs an annual commitment before July 1 locks in today’s rate for the next 12 months. The same customer signing on July 2 pays the new, higher rate.
For SMBs currently on monthly billing, the math usually points to switching to annual before July 1. The annual rate is lower than monthly to begin with, and the switch protects you from the increase for a full year.
For SMBs already on an annual term with a renewal date just after July 1, it may be worth asking your reseller or MSP about renewing a few weeks early. For our IT support clients in Baltimore, we typically run this check 60 to 90 days ahead of any renewal.
The trade-off you need to understand
The annual commitment isn’t free of trade-offs. Microsoft requires:
- The 12-month commitment to be paid fully upfront.
- You can add new licenses at any time during the year.
- You cannot reduce your baseline license count until the 12-month term ends.
That last point matters. If you expect headcount to shrink in the next 12 months, the upfront commitment may cost more than the rate increase would. For most growing businesses, the math works the other way: every seat you already have stays at today’s rate, and any new seats are added at the locked-in price too.
Business Premium isn’t going up. Here’s what’s inside it.
Because Premium isn’t increasing, the months before July 1 are a good time to look at what you already pay for. Most Business Premium subscribers use Outlook, Word, Excel, Teams, and OneDrive every day, and never touch the rest of the plan.
Sitting in Premium and often unused:
- Microsoft Defender for Business, an endpoint security product that can replace some standalone antivirus tools.
- Microsoft Defender for Office 365 Plan 1, which scans email and links for phishing and malware before they reach a user’s inbox.
- Microsoft Intune, for remotely managing and wiping company devices.
- Microsoft Entra ID Plan 1, which is what you need to enforce conditional access policies like MFA on unfamiliar logins.
- Microsoft Purview Data Loss Prevention, which can stop sensitive data being copied or sent outside the business.
If a Premium subscriber is also paying a separate vendor for antivirus, mobile device management, conditional access, or email security, there’s a duplicate cost on the books. For most of our cybersecurity clients in Baltimore, getting more out of Microsoft’s built-in security tools is the cheapest first move.
How we’re handling this for our clients
Microsoft’s renewal cycles don’t always line up with how we run our pricing reviews, which means a vendor price change can land on a client’s invoice well before anything we’d planned. We’re not comfortable passing that on without warning.
For our clients on Microsoft 365, we’re absorbing the July 1 increase through August, so no client sees the new rate before our normal September review cycle. In the meantime, for any client where the annual commitment is the right call, we’re auditing user counts and quoting the upfront cost so they can lock in today’s rates and bypass the increase entirely.
Our managed IT services team runs this kind of review every renewal cycle. If your renewal date is in the next six months and nobody has talked to you about July 1, talk to us about a license review before your next invoice lands.
