Microsoft has announced two significant changes to Microsoft 365 taking effect in 2026. One impacting license management in April, and a price increase across several plans in July. Here’s what you need to know and how to prepare.
1) End of the 30-Day License Expiration Grace Period
Effective April 1, 2026
Microsoft is removing the 30-day grace period that previously allowed users to continue accessing their Microsoft 365 accounts after a license expired. Beginning April 1, 2026, access will be suspended immediately when a license lapses with no grace window.
What Changes
Today, when a Microsoft 365 license expires, users retain access to their accounts and data for up to 30 days before being locked out. As of April 1, that buffer goes away. The moment a license expires, whether due to a missed renewal, a billing lapse, or a subscription cancellation, access stops.
Who Is Affected
This change applies to all Microsoft 365 commercial plans across all customers globally, effective April 1, 2026. There is no opt-out. This is a Microsoft platform change and applies regardless of whether you purchase through a CSP, a partner, or directly from Microsoft.
What This Means for Your Business
Employees who lose access to their Microsoft 365 account immediately lose access to email, Teams, SharePoint, OneDrive, and any installed Office applications. Files stored in OneDrive or SharePoint may become inaccessible until the license issue is resolved. For businesses with even one or two users on expiring licenses, this could mean unplanned disruption with no warning period.
Key action items before April 1:
Review your current license expiration dates and renewal cadence. Confirm billing information is current and auto-renewal is properly configured. Identify any users on licenses that are set to expire soon and address them proactively.
2) Microsoft 365 Price Increases on Select Plans
Effective July 1, 2026
Microsoft will increase the list price on several Microsoft 365 and Office 365 commercial plans beginning July 1, 2026. The increases are tied to the addition of new features and capabilities including expanded Copilot Chat, security enhancements, and additional Intune management tools being bundled into the affected plans.
New Capabilities Being Added
Microsoft is adding the following features to the listed plans as part of this pricing change:
Across Business Basic, Business Standard, Business Premium, Office 365 E1, and Office 365 E3: Copilot Chat enhancements and Security, management, and analytics for Copilot Chat. Business Basic, Standard, and Premium also gain +50 GB of email storage and URL checks in Outlook and Office apps. The M365 E3 and E5 tiers receive additional Intune capabilities including Remote Help, Advanced Analytics, Intune P2, Endpoint Privilege Management, and Enterprise Application Management. M365 E5 adds Microsoft Cloud PKI and Microsoft Security Copilot.
Plan-by-Plan Price Changes (Per User, Billed Annually or Month-to-Month)
| Plan | Annual Subscription (Paid Upfront) | Month-to-Month Subscription | ||||
|---|---|---|---|---|---|---|
| Current per year | After July 1 per year | Change | Current per month | After July 1 per month | Change | |
| Microsoft 365 Business Basic | $72.00 | $84.00 | +16.7% | $7.20 | $8.40 | +16.7% |
| Microsoft 365 Business Standard | $150.00 | $168.00 | +12.0% | $15.00 | $16.80 | +12.0% |
| Microsoft 365 Business Premium | $264.00 | $264.00 | No change | $26.40 | $26.40 | No change |
| Office 365 E1 | $120.00 | $120.00 | No change | $12.00 | $12.00 | No change |
| Office 365 E3 | $276.00 | $312.00 | +13.0% | $27.60 | $31.20 | +13.0% |
| Microsoft 365 E3 | $432.00 | $468.00 | +8.3% | $43.20 | $46.80 | +8.3% |
| Microsoft 365 E5 | $684.00 | $720.00 | +5.3% | $68.40 | $72.00 | +5.3% |
| Microsoft 365 F1 | $27.00 | $36.00 | +33.3% | $2.77 | $3.69 | +33.3% |
| Microsoft 365 F3 | $96.00 | $120.00 | +25.0% | $9.60 | $12.00 | +25.0% |
Annual prices shown as total per-user cost paid upfront for a 12-month term. Month-to-month prices are per user per month. Post-July 1 month-to-month pricing is derived by applying the same percentage increase as the announced annual price change for each plan. All figures reflect Microsoft list pricing — actual pricing through your CSP may vary.
When Will You See the Increase?
The July 1, 2026 effective date applies to new subscriptions started on or after that date, and to existing subscriptions at their next renewal after July 1. If your annual term renews before July 1, you will not see the price change until your following renewal. Month-to-month subscribers will see the change at their first billing on or after July 1.
Want to delay the increase?
If your annual term renews between now and July 1, renewing early locks in current pricing for another full term. For eligible enterprise plans (M365 E3, M365 E5), a 3-year term is available that provides price protection for the full term.
A Note on These Changes
Both of these changes originate directly from Microsoft and apply across all purchasing channels, whether you buy through SysDrive, another Microsoft CSP, or directly from Microsoft. They are not adjustments made at the partner level.
We understand that any change to cost or access policy warrants review. That’s why we’re getting this information in front of you now, well ahead of the effective dates, so you can plan accordingly rather than be surprised.
We’re happy to do a review of your current Microsoft 365 licenses to verify your user count, which plans you’re on, and whether there are any opportunities to better align your licensing to how your team actually works. No pressure, just clarity.