Product changes, price increases, Copilot mechanics, MCA E transition, and the buyer side checklist for the next renewal cycle.
The Microsoft licensing program changed substantively across 2025 and the buyer side implications run through 2026. Copilot moved to general availability. MCA E replaced EA at scale. Annual list prices stepped up 5 to 8 percent. The European Economic Area Teams unbundling created new SKU options.
The guide below maps each change to its commercial implication for an enterprise renewal. Read the related Microsoft practice, the EA renewal guide, the Copilot licensing article, the EA True Up guide, the CIO proposal playbook, and the Microsoft knowledge hub.
Four headline changes shaped Microsoft licensing in 2025. Each carries implications for the buyer side renewal posture.
The 2025 to 2026 price changes are not uniform. Buyer side teams should benchmark each SKU rather than apply a blanket increase to the renewal envelope.
| SKU | 2024 list (USD/u/m) | 2025 list (USD/u/m) | Change |
|---|---|---|---|
| Microsoft 365 E3 | 36.00 | 38.75 | +7.6% |
| Microsoft 365 E5 | 57.00 | 60.50 | +6.1% |
| Microsoft 365 F1 | 2.25 | 2.40 | +6.7% |
| Microsoft 365 F3 | 8.00 | 8.70 | +8.8% |
| M365 Copilot | 30.00 | 30.00 | 0.0% |
| Defender for Office 365 Plan 2 | 5.00 | 5.25 | +5.0% |
| Entra ID P2 | 9.00 | 9.50 | +5.6% |
The list price changes above are the catalog reference. The actual enterprise price depends on the held price preserved across the EA cycle. Programs that maintain a held price discipline pay 18 to 32 percent below the list catalog. The first move at renewal is the held price restoration.
Microsoft 365 Copilot is the largest single commercial decision in the 2025 to 2026 cycle. The 30 dollar per user per month addition compounds against the M365 base. Adoption telemetry must drive the count.
The three Microsoft commercial channels each carry a different profile in 2026. The MCA E is the rising channel. The EA is the legacy channel still preferred by some long term customers. The CSP is the partner channel.
| Channel | Position in 2026 | Best for |
|---|---|---|
| EA | Legacy, still supported | 500+ seats with held price legacy |
| MCA E | Rising, default for new and renewing | 500+ seats migrating off EA |
| CSP | Partner channel, month to month | Partner heavy, services bundled |
The 2024 European Commission decision required Microsoft to offer Teams as a standalone SKU and to offer M365 SKUs without Teams in the European Economic Area. The 2025 rollout created new buyer side options for EEA based enterprises.
For EEA entities with an established alternative collaboration platform (Zoom, Webex, Google Workspace), the No Teams SKUs deliver a 4 to 6 percent reduction on the M365 base. For dual platform organizations, the Teams unbundling allows licensing only the active Teams population while leaving the rest of the M365 estate untouched.
The checklist below maps the 2025 to 2026 changes to the buyer side renewal actions. Each item ties to a workstream owner.
| Change | Buyer side action | Owner |
|---|---|---|
| Price increase 5 to 8% | Per SKU benchmark, restore held price | Procurement |
| MCA E channel | Channel decision modeled | Procurement plus IT |
| Copilot GA | Adoption telemetry pulled, right size count | IT licensing |
| EEA Teams unbundling | EEA entity SKU option evaluated | Procurement plus Legal |
| Add on premium steepening | Per workload telemetry, drop unused | IT licensing |
| Renewal window opening | 18 month timeline set | CIO |
The eight step checklist below moves a Microsoft estate from a 2024 baseline to a 2026 ready renewal posture.
Four headline changes drove 2025. Microsoft 365 Copilot moved from preview into general availability with the 30 dollar per user per month addition. Microsoft Customer Agreement for Enterprise (MCA E) opened as the EA successor channel. The European Economic Area unbundling rules brought new SKU options for Teams. And the 5 to 8 percent annual price increases across M365 and Office 365 SKUs reset the renewal baseline.
Three patterns dominate 2026. Copilot adoption telemetry is now mature enough to reset the buyer side baseline at True Up and renewal. The MCA E channel becomes the dominant renewal vehicle for enterprises above 500 seats. And the cloud add on premium across Defender, Entra ID P2, and Purview steepens the case for selective licensing rather than full bundle adoption.
Microsoft 365 E3 moved from 36 to 38.75 dollars per user per month. E5 moved from 57 to 60.50. F1 moved from 2.25 to 2.40. F3 moved from 8 to 8.70. Copilot remained at 30 dollars per user per month. Defender for Office 365 Plan 2 moved from 5 to 5.25. The increases are not uniform; buyer side teams should benchmark per SKU rather than apply a blanket uplift.
For most enterprises above 500 seats, the MCA E is the right successor in 2026. The MCA E offers cleaner commercial paper, direct billing, and simpler administrative overhead. The trade off is the loss of the historical EA volume discount structure, which is partially offset by negotiated discount on the MCA E. The decision should be modeled per estate.
Microsoft 365 Copilot is 30 dollars per user per month on top of E3, E5, or qualifying Business SKUs. Copilot is annual commit only inside an EA or MCA E. CSP allows month to month Copilot. The 2026 buyer side pattern is to commit a smaller annual base, run an MCA E or CSP delta for the pilot population, and right size at next anniversary.
Adopting the full Copilot population at the M365 base without an adoption ramp. Enterprises that committed 100 percent Copilot in 2024 and 2025 typically discovered 25 to 50 percent active use inside 12 months. The 2026 correction is to right size the Copilot count to active use plus a documented growth buffer, not to commit broadly and reclaim later.
Redress runs the Microsoft licensing workstream across the renewal cycle. The engagement maps the 2025 to 2026 changes to the estate, models the channel options, sets the Copilot count against telemetry, and supports the procurement team through the renewal envelope.
The engagement is independent. Buyer side. Industry Recognized. Five hundred plus enterprise software engagements. Two billion plus in client spend under advisory. Read the related Vendor Shield, the Renewal Program, the Benchmark Program, the Software Spend Assessment, the Benchmarking framework, the about us page, the management team page, the locations page, and the contact page.
The 2026 buyer side reference for the Microsoft renewal cycle. SKU benchmark, channel decision framework, Copilot sizing, EEA unbundling analysis, and the renewal posture playbook.
Used across more than 150 Microsoft enterprise renewals. Independent. Buyer side. Built for licensing teams running the next cycle.
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Open the Paper →The 2025 changes looked benign on the list catalog. Our renewal exposure landed 14 percent above the prior cycle once we modeled the held price erosion, the Copilot mandate, and the add on premium creep. The 2026 posture restored the held price, right sized Copilot to active use, and dropped two add ons we never deployed.
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