Khaberni - Microsoft announced on Thursday a price increase for Microsoft 365 productivity packages starting from July 2026, impacting commercial clients and government institutions worldwide.
This increase comes at a time when the market is experiencing intense competition with Google's productivity services, according to Reuters.
Competition with Google Driving Change
Microsoft explains that the current technological environment demands radical updates to ensure the continuation of its packages, which include essential applications like Word, Excel, and PowerPoint.
The company faces direct competition from Google’s productivity services, which has played a role in the repricing of the packages.
According to Reuters, the increase is most apparent on small businesses and frontline workers, with changes as follows:
- Microsoft 365 Business Basic package will increase by 16.7% to reach 7 dollars per month per user.
- Business Standard package will increase by 12% to reach 14 dollars per month.
Smaller Increases on Major Enterprise Packages
Major enterprises will see limited rises compared to commercial packages, including:
- Microsoft 365 E3 package increase by 8.3% to become 39 dollars.
- Microsoft 365 E5 package increase by 5.3% to a subscription price of 60 dollars.
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Increases up to 33%
Frontline worker packages were the most affected, registering the highest percentage increase compared to other categories:
- Price of Microsoft 365 F1 rose from 2.25 dollars to 3 dollars.
- F3 package rose from 8 dollars to 10 dollars.
Phased Adjustments for Government Entities
However, government sector packages will follow the same approach but in a gradual manner that aligns with local regulations in each country, according to Reuters in its report.
More than 1100 New Features Supporting the Increase
Microsoft confirms that the price adjustments result from adding more than 1100 new features to Microsoft 365 packages over the past years, including significant security enhancements and advanced productivity tools powered by artificial intelligence.
Copilot
As part of the shift towards AI-driven productivity, Microsoft introduces the smart assistant Copilot as an additional service worth 30 dollars per month, alongside new packages aimed at small and medium-sized enterprises.
This step follows a series of previous increases, where Microsoft raised the prices of commercial Office packages in 2022, and earlier this year, increased consumer subscription prices for the first time in over ten years, according to a Reuters report.
