Microsoft Licensing Update June 2026: M365 Price Increases, Azure RI Decommissions, and the Last Promo Window Before FY27

Last Chance to Lock In Current Microsoft 365 Prices

June is the final month to purchase or renew Microsoft 365 at today’s price levels. Effective July 1, 2026, Microsoft will implement a global price and packaging update across commercial Microsoft 365 plans.

What’s changing

Enterprise suites: Office 365 E3 +13% ($23 to $26), Microsoft 365 E3 +8% ($36 to $39), Microsoft 365 E5 +5%.

Business suites: Microsoft 365 Business Basic +16% ($6 to $7), Microsoft 365 Business Standard +12% ($12.50 to $14). Microsoft 365 Business Premium is unchanged.

What you get in return

New capabilities rolling out June-August 2026: Microsoft Defender for Office 365 Plan 1, Intune Remote Help, Intune Advanced Analytics, and additional security and management features bundled into existing tiers.

What to do now

Existing customers remain on current pricing until their next renewal. The new prices apply at the first renewal on or after July 1, 2026. Renewing before the end of June locks in current pricing for another full term.

If your renewal falls in Q3 or Q4 2026, model the cost of an early renewal now. Reach out to us if you want to run the numbers.

General Availability of High Volume Email in Exchange Online

Microsoft has announced that High Volume Email (HVE) is now generally available in Exchange Online. HVE is designed for applications and devices that need to send large volumes of internal email reliably and securely, without routing through third-party SMTP services.

For organizations with on-premises applications, printers, or automated systems that rely on SMTP relay, HVE provides a native Microsoft-hosted alternative. This is relevant for any Exchange Online customer running hybrid workloads or line-of-business applications with high email output.

Microsoft Expands Windows 365 and Azure Virtual Desktop

Windows 365 Business (organizations up to 300 seats) has received a permanent 20% price reduction, effective immediately for new customers and from the next renewal date for existing customers.

Windows 365 Frontline has been renamed to Windows 365 Flex. The rename signals a shift in positioning, not a change in underlying functionality.

Azure Virtual Desktop Hybrid is now in public preview. It extends Microsoft’s cloud-managed VDI service to on-premises environments, allowing organizations to run session hosts on their own hardware while Microsoft manages the control plane. For enterprises with data residency requirements or existing on-premises infrastructure investments, this is worth evaluating before committing to a fully cloud-hosted VDI approach.

GitHub Copilot Moves to Usage-Based Billing

Since June 1, 2026, GitHub Copilot usage consumes GitHub AI Credits. Base plan pricing is not changing; the GitHub Enterprise license remains $39 per user per month.

Key changes

• Code completions and Next Edit suggestions remain included without consuming credits.
• Fallback experiences are no longer available. Usage is now governed by available credits and admin budget controls.
• Copilot code review will also consume GitHub Actions minutes, billed at the same per-minute rates as other GitHub Actions workflows.

What this means for GitHub Enterprise customers

Price stays the same. Enterprise customers who transition receive an additional $31 in monthly AI credits, giving a total of $70 per user. Admins should review budget controls before usage patterns shift.

Microsoft 365 Copilot Frontier Program: Cowork, Critique, and Council

Three new capabilities, now live in the Frontier program, expand Microsoft 365 Copilot from assistance to execution.

• Copilot Cowork turns multi-step requests into background plans with clear checkpoints, running inside Microsoft 365 security, governance, and DPA boundaries.
• Critique (in Researcher) uses multiple leading models to cross-check drafting, accuracy, and citations, outperforming competing approaches on the DRACO benchmark.
• Council (in Researcher) runs a single prompt across multiple models in parallel and surfaces where they agree, disagree, and add unique value.

For organizations already in the Frontier program, these capabilities are available now. For those evaluating Microsoft 365 E7, these are concrete examples of what sits above the standard Copilot feature set.

Azure Reserved Instances Decommissioned for Select VM Series from July 1, 2026

Starting July 1, 2026, Microsoft will decommission Azure Reserved VM Instances for a range of older VM series.

One-year RIs no longer available for: Av2, Amv2, Bv1, D, Ds, Dv2, Dsv2, F, Fs, Fsv2, G, Gs, Ls, and Lsv2.

Both one-year and three-year RIs no longer available for: Dv3, Dsv3, Ev3, and Esv3.

If your Azure environment runs workloads on any of these series, review your current Reserved Instance coverage before July 1. Existing reservations are not affected, but renewals and new purchases will be blocked after that date. Migrate to supported VM series now to avoid a gap in commitment pricing.

Consumption-Based SharePoint Storage

Microsoft will introduce a pay-as-you-go billing model for SharePoint storage overages starting early June 2026. Admins can opt in to pay only for extra storage used beyond the included quota, with no need to purchase fixed storage add-ons in advance.

This shifts from the current model where organizations must pre-purchase storage blocks. The pay-as-you-go approach offers flexibility but requires monitoring to avoid unexpected charges. Review your current SharePoint storage position and set budget alerts before opting in.

CSP Promo Calendar — Final Month of FY26

June is the final month of Microsoft’s fiscal year, and most active promotions run only until June 30.

Microsoft 365

• Three-year M365 E3/E5 (new-to-offer): 10% discount, min 100 seats, until June 30.
• New M365 E5 (annual): 15% discount, until June 30.
• Getting started with M365 E7: 10% intro discount, min 10 licenses, until Dec 31.
• Accelerate with M365 E7: 15% discount, min 100 licenses, until Dec 31.
• Scale up with M365 E7: 15% discount, min 300 licenses, 3-year term, until Dec 31.

Windows 365 and security

• Getting started with Windows 365: 20% discount for new customers, until June 30.
• Purview and Defender Suite (3-year): 10% discount for M365 E3 customers new to offer, min 100 licenses, until June 30.
• Purview Suite for Business Premium: 50% discount with Copilot and Business Premium, 10-300 seats.

Copilot

• Getting started with Copilot: 15% discount, min 10 licenses, until June 30.
• Scale up with Copilot: 20% discount, min 100 licenses, until June 30.
• Copilot for all: 40% discount, min 1,000 annual subscriptions, until June 30.
• Copilot Business: 15% discount, max 300 licenses, until June 30.
• Bundle Business Standard + Copilot Business: up to 35% discount, 10-300 seats, until June 30.
• Bundle Business Premium + Copilot Business: up to 25% discount, 10-300 seats, until June 30.

Changes in the Microsoft Product Terms

Privacy and Security Terms

Microsoft added the Microsoft 365 Agent to the EU Data Boundaries table. New Azure Core Services added, existing service names updated, deprecated services removed.

Microsoft Azure: AI Services Definition

Microsoft introduced a Microsoft Azure AI Services definition to ensure cross-cutting terms apply consistently to all Azure services incorporating AI capabilities.

Microsoft Dragon Copilot

Microsoft removed the term preventing customers from deploying Dragon Copilot licenses in the same tenant. This restriction is lifted.

Microsoft Power Platform

Added clarification of liability for the query data obligation.

GitHub Offerings

The GitHub Copilot section of the Product Terms has been removed. Terms parity is now achieved through the standard Product Terms framework.

Agent 365

A License Prerequisites table has been added. The Data Privacy Notices terms have been updated.

If you want help modeling the M365 price increase impact, reviewing your Azure RI coverage, or identifying which CSP promotions apply to your estate, reach out to us before the end of the month.