Microsoft 365: what’s changing?
Microsoft’s biggest Microsoft 365 update in years is live next month, and they have finally announced the pricing for UK organisations. We wrote an article a couple of months back after the initial announcement which you can view HERE
A major Shift – Not Just a Price Change
When Microsoft first announced these updates, the conversation focused heavily on what was changing. Now, with UK pricing confirmed, the conversation shifts to value vs cost.
This isn’t just a routine price increase. It represents a broader transformation of Microsoft 365 into an AI-first, security-led platform designed for modern working.
At a high level, Microsoft is investing in three core areas:
- Artificial Intelligence integrated into everyday tools.
- Enhanced built-in security and protection.
- Expanded management and endpoint capabilities for IT teams.
AI Moves to the Centre of Work
Microsoft’s continued push into AI is the biggest driver behind these changes.
With Copilot now embedded across Word, Excel, PowerPoint, Outlook and OneNote, users are moving beyond simple automation into AI-assisted workflows.
New capabilities such as:
- Copilot Chat with Agent Mode.
- Interative, in-app AI assistance.
- Greater IT governance and control over AI usage.
This means AI is becoming part of how work gets done.
Productivity gains are now directly tied to how well your organisation adopts and governs AI.
Security Is Getting a Significant Upgrade.
Alongside AI, Microsoft is strengthening baseline security across many licences.
New additions include:
- Microsoft Defender for Office 365 Plan 1 in E3 plans.
- Enhanced phishing, malware, and malicious link protection.
- URL scanning and warning capabilities for business-tier licences.
These changes reflect the reality that modern threats are more sophisticated – and organisations need security built in, not bolted on.
Behind the scenes, IT teams are also getting more capability included out-of-the-box including new Remote Help, Intune Advanced Analytics and Additional enterprise controls in E5 (e.g. Endpoint Privilege Management).
Microsoft is also introducing AI-driven security tooling, such as Security Copilot agents, which help teams respond faster and with greater visibility across environments.
Among the more straightforward improvements is an increase in mailbox capacity with an additional 50GB additional mailbox space for Business Basic, Standard and Premium users.
It’s a small change, but one many organisations will feel immediately, and could save you money if you are using Exchange Online Plan2 for space.
What Does It Cost in the UK?
Microsoft confirmed that updated pricing takes effect globally from 1 July 2026, with UK pricing now aligned in GBP.
Business Basic is up 17%, Business Standard up 13% but thankfully Business Premium is remaining the same price.
What Should Businesses Do Next?
With both the feature updates and UK pricing confirmed it could be a good time to take action.
We recommend:
1. Review Your Licensing Mix:
- Are you on the right plans for your users?
- Are you paying for features you don’t use.
- Could some users move to more cost-effective tiers?
2. Evaluate AI Readiness
- Are you ready to adopt Copilot securely?
- Do your data and permissions support AI usage?
3. Strengthen Security Baselines
- Take advantage of newly included protection features.
- Reduce reliance on third-party tools where possible.
4. Plan for Renewal Impact
- Identify when your licences renew.
- Budget for pricing changes now, not later.
The combination of AI, security, and management enhancements brings real opportunity, but also a shift in how organisations consume and manage IT services.
