Microsoft (MSFT.O) announced Thursday that it will raise prices for its Microsoft 365 productivity suites worldwide beginning July 2026, affecting both commercial and government clients.
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The move comes amid intensifying competition from Google’s suite of productivity tools. Microsoft said the price adjustments will hit businesses and public sector agencies, with the largest increases targeting small business and frontline worker plans.
Microsoft 365 Business Basic will rise 16.7% to $7 per user per month, while Business Standard increases 12% to $14. Enterprise plans see smaller hikes, with Microsoft 365 E3 up 8.3% to $39 and E5 up 5.3% to $60.
Subscriptions for frontline workers will see the steepest increases, with Microsoft 365 F1 moving from $2.25 to $3, and F3 from $8 to $10. Government plans will follow a similar path, with changes phased in based on local regulations.
Microsoft said the price adjustments reflect over 1,100 new features added to Microsoft 365, including AI-powered productivity tools and enhanced integrated security.
The company is expanding its AI capabilities across Microsoft 365, offering Copilot as a $30-per-month add-on and introducing new bundles tailored for small and medium businesses.
This marks the first major commercial Office price increase since 2022. Earlier this year, Microsoft also raised consumer subscription rates for the first time in more than a decade.
