Microsoft’s biggest Microsoft 365 licensing update in years takes effect on 1 July 2026, and it is not just a price rise. Business Premium holds its price while mailbox storage doubles, E3 and E5 both gain meaningful new security capability, and a brand new top tier, Microsoft 365 E7, has arrived above E5 for the first time since 2015. For UK businesses approaching a renewal, the practical question is not whether prices are changing. It is whether your current licence still matches what you actually need.
This is the most consequential shift to the Microsoft 365 lineup since E5 launched over a decade ago, and the changes apply differently depending on which tier you are on. Here is what is actually happening, tier by tier, and what to do about it before your next renewal.
Business Premium is the standout: no price rise, double the mailbox
Microsoft 365 Business Premium is not increasing in price as part of this update, while Business Basic and Business Standard are both rising. At the same time, mailbox storage across all three Business tiers is doubling from 50GB to 100GB per user, rolling out through the summer with completion expected by August 2026.
This matters because the value gap between Business Standard and Business Premium has narrowed sharply. Business Premium already includes Intune for device management, Microsoft Defender for Business, and Entra ID conditional access, the security layer most businesses working towards Cyber Essentials genuinely need. With Standard rising in price and Premium staying flat, the cost of stepping up to Premium’s security tooling is now smaller than it has been in years.
Enterprise E3 finally gets built-in email threat protection
Microsoft 365 E3 is gaining Microsoft Defender for Office 365 Plan 1 as a built-in feature rather than a separate add-on. This brings Safe Links, Safe Attachments, and advanced anti-phishing protection into the E3 baseline, protections that previously required either E5 or a paid extra. E3 customers are also gaining Intune Remote Help, Intune Advanced Analytics, and Intune Plan 2 for device management.
If your organisation currently pays separately for Defender for Office 365 Plan 1 on top of E3, that add-on is now redundant. The practical step is to check whether it can be removed at your next renewal, rather than continuing to pay for coverage you already have.
Enterprise E5 adds security Copilot at no extra cost
Microsoft 365 E5 customers are gaining Security Copilot capabilities built into Defender, Entra, Intune, and Purview, alongside the same Intune improvements rolling out to E3. Microsoft has also added Intune Endpoint Privilege Management, Enterprise Application Management, and Microsoft Cloud PKI as E5-exclusive additions.
This is a genuine expansion of what E5 includes for the same headline price, ahead of the increase taking effect on the same date. For security teams already on E5, the practical task is auditing which of these capabilities are switched on. New features that arrive automatically often sit dormant in a tenant until an administrator enables them.
Microsoft 365 E7 is a new top tier built around AI agent governance
Above E5 sits a genuinely new product: Microsoft 365 E7, branded the Frontier Suite. It bundles Microsoft 365 E5, Microsoft 365 Copilot, the Microsoft Entra Suite, and a new product called Agent 365 into a single licence at $99 per user per month, roughly $18 less per user than buying the same four components separately.
Agent 365 is the part worth understanding even if E7 itself is not relevant to your business yet. It extends the same governance, identity, and security controls businesses already apply to human employees to AI agents operating across an organisation’s systems, giving IT teams a single console to view, monitor, and audit every agent in their environment. This is Microsoft’s clearest signal yet that AI agents are being licensed and managed like staff, not like software features.
E7 is built for large organisations already running E5 with Copilot in active use and AI agents being deployed at scale. For most UK SMBs, it is not the right tier today. But it is worth tracking, because it shows where Microsoft expects enterprise AI governance to head over the next few years.
| Tier | Price Change (from July 2026) | What's New |
|---|---|---|
| Business Basic | Increasing | URL checking added |
| Business Standard | Increasing | URL checking added |
| Business Premium | Unchanged | Mailbox doubles to 100GB |
| Enterprise E3 | Increasing | Defender for Office 365 Plan 1 included, Intune Plan 2 |
| Enterprise E5 | Increasing | Security Copilot included, Intune Endpoint Privilege Management |
| Enterprise E7 (new) | New tier, $99/user/month | Bundles E5, Copilot, Entra Suite, Agent 365 |
Three things are worth acting on before your next renewal:
- Review whether your current tier still matches your needs. Several capabilities that used to justify an upgrade or a separate add-on are now included as standard.
- Check your renewal date against 1 July 2026. Locking in a renewal before that date keeps you on current pricing for the full term, even as new features roll out.
- Audit any standalone security add-ons, particularly Defender for Office 365 Plan 1 on E3, that may now be duplicated by what your licence already includes.
The pattern behind these changes
In Dr Logic’s experience advising Mac first and hybrid UK businesses on Microsoft licensing, the businesses that get the most value from these changes are the ones who treat a renewal as a review point, not a formality. New capability landing inside an existing licence is only useful if someone actually switches it on, and several of the protections arriving with this update, including the Defender for Office 365 expansion into E3, do not activate automatically.
The better approach for most SMBs is to use this renewal cycle to right-size licensing tier by tier rather than defaulting to whatever was assigned when the account was first set up. A business that has been paying for security add-ons separately, or that has outgrown Business Standard’s mailbox limits, may now find the gap to Business Premium has closed considerably.
Dr Logic perspective
These changes are a genuine opportunity rather than just another price increase to absorb. Business Premium becoming relatively cheaper against Standard, combined with the mailbox storage doubling, removes two of the most common reasons businesses delayed upgrading their security tier. If you are approaching a Microsoft 365 renewal in the next few months, now is the time to check what your current licence already includes before assuming you need to pay for more.
If you want help working out which Microsoft 365 tier actually fits your business, and where AI governance tools like Agent 365 might eventually matter for you, Dr Logic Innovation is where our team helps Mac-first and hybrid businesses plan technology decisions like this one.
Related articles
- Securing Microsoft 365 and Google Workspace for Hybrid Teams in 2026
- The MFA and Email Security Shortlist for Microsoft 365 and Google Workspace
FAQs
Is Microsoft 365 Business Premium increasing in price in July 2026?
No. Business Premium is one of the few Microsoft 365 plans not increasing in price as part of the July 2026 update. Business Basic and Business Standard are both rising, while Premium stays at its current price and gains a mailbox storage increase from 50GB to 100GB per user.
What is Microsoft 365 E7?
Microsoft 365 E7, called the Frontier Suite, is a new top-tier licence sitting above E5. It bundles Microsoft 365 E5, Microsoft 365 Copilot, the Microsoft Entra Suite, and a new AI agent governance product called Agent 365 into a single subscription, priced at $99 per user per month.
Do I need to do anything before 1 July 2026?
If you are approaching a Microsoft 365 renewal, check your renewal date against 1 July 2026. Renewing or committing to a new term before that date locks in current pricing for the full term. It is also worth reviewing whether new included features make any separate add-ons you are paying for redundant.
Does Microsoft 365 E3 now include better email security?
Yes. Microsoft 365 E3 now includes Microsoft Defender for Office 365 Plan 1 as a standard feature rather than a paid add-on. This brings Safe Links, Safe Attachments, and advanced anti-phishing protection into the E3 baseline, rolling out through summer 2026.
