Microsoft 365 price increase 2026: 7 ways to offset it

Microsoft 365 cost optimization · ~6 min read

On July 1, 2026, Microsoft raised list prices across seven commercial SKUs — by roughly 5% to as much as 33% depending on the plan. Microsoft 365 E3 went to $39 (+8.3%), E5 to $60 (+5.3%), Business Standard to $14 (+12%); Business Premium held at $22. There's also a new top-tier E7 plan.

You can't change the list price — but on most tenants you don't need to. Gartner estimates organizations waste 25–30% of SaaS license spend, which is almost always more than the increase itself. Here are seven read-only ways to claw it back before your next renewal.

1. Reclaim unassigned purchased seats

The fastest win. Compare seats purchased vs. seats assigned per SKU — the gap is money you're paying for nothing. Reduce the subscription quantity (or reclaim at renewal). Get-MgSubscribedSku shows prepaidUnits.enabled (purchased) vs consumedUnits (assigned).

2. Strip licenses off disabled accounts

Blocked sign-in doesn't stop billing. Accounts that are disabled but still licensed are pure waste — remove the licenses (and finish offboarding).

3. Offboard never-signed-in and inactive users

Licensed users who've never signed in, or haven't in 30/60/90 days, are reclaim candidates. Pair the licensing data with sign-in activity, then reassign or remove.

4. Downgrade over-provisioned E5 seats to E3

Every E5 seat that doesn't use the premium security, compliance, Power BI, or voice features is $21/user/month over E3 — $252/year each. See the full E5-vs-E3 downgrade math →

5. Consolidate overlapping plans

Users sometimes accumulate two base plans (e.g. E3 + E5, or a standalone that's already included in their suite). Find the overlaps and drop the redundant one.

6. Right-size frontline and shared scenarios

Frontline staff often don't need a full knowledge-worker SKU — F-plans exist for that. Shared mailboxes under 50 GB generally don't need a license at all. Both are common sources of quiet overspend.

7. Re-run the audit on a schedule

Waste creeps back the moment offboarding slips. A monthly license audit keeps the savings from leaking away — and gives you a clean number for the next renewal conversation.

Lock in current rates where you can. If you renew before your anniversary you may be able to hold current pricing for a term — but only right-size first, so you're not locking in seats you don't need.

Find your offset in 5 minutes

SeatScout runs all seven checks read-only inside your own tenant and reports exactly how much you can recover, in dollars. Free tier available.

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Pricing figures are Microsoft public list prices for the July 1, 2026 update (USD); your contracted/regional price may differ. Waste estimate: Gartner, as cited by license-optimization vendors. SeatScout is independent and not affiliated with Microsoft.