Microsoft raised the price of the AI you’re not using. The 2026 Copilot & M365 changes, decoded.
E3 and E5 went up, the enterprise volume discounts quietly vanished, and a new $99 tier appeared — all on seats where Copilot adoption is still under 4.5%. What actually changed, and what to do before you renew.
On 1 July 2026, your Microsoft bill got more expensive. And the headline number undersold it.
If you only read the press release, you saw a modest list-price bump. The real increase is bigger, and it landed on exactly the seats that are doing the least work.
What actually changed
Three moves, stacked:
- List prices rose. Microsoft 365 E3 went from $36 to $39 per user/month; E5 from $57 to $60.
- The enterprise volume discounts were removed. This is the part that isn’t in the headline. Add it back and large organisations are looking at an effective 15–23% increase for the same seats.
- Full Copilot is still separate. The $30 per user/month Copilot licence sits on top of all of the above — it didn’t get cheaper, and it didn’t get folded in.
There’s also a new top tier: Microsoft 365 E7, the "Frontier Suite," at $99 per user/month — E5 + Copilot + Agent 365 bundled into one SKU. It’s a real product, and for some organisations the bundle maths works. But it’s a bigger number, sold at the exact moment most companies can’t yet justify the tier they already have.
The number that changes how you should read all of this
Copilot adoption is still under 4.5%, with roughly 1% of licensed users active weekly.
So read the price change again with that in mind. The cost went up, on seats that are mostly idle. Rising price multiplied by flat, low usage is a waste number that just got worse — and metered agent features make it harder to predict, not easier.
What to do before you renew
You don’t need to panic-cancel, and you don’t need a new AI budget. You need three answers:
- What’s your real all-in cost per _active_ user? Not per seat — per person actually using it weekly. That’s the honest ROI denominator, and most finance teams can’t produce it on demand.
- Don’t buy the next tier to fix adoption of the current one. A bigger SKU doesn’t create capability; it creates a bigger invoice for capability you may not be using yet. Confirm people use the $60 E5 before you consider the $99 E7.
- Fund the fix from the waste. The money to make these tools pay back is usually already in your licence spend — sitting in seats nobody was shown how to use. Recover that first; let it fund the enablement.
Where we stop
We don’t sell licences, and we have nothing to upsell — which means we’ll happily tell you to cancel the ones nobody touches. That’s a sentence a reseller can’t say.
You’re not paying more for AI. You’re paying more for AI nobody was shown how to use.
The first move isn’t a purchase. It’s a number → the free Tool Waste Self-Check estimates what you’re wasting, in about two minutes.