Microsoft 365 Price Increases Are Here – Why Licence Optimisation Has Never Been More Important

From July 2026, Microsoft has introduced one of its most significant commercial Microsoft 365 pricing updates in recent years. While many organisations expected prices to rise eventually, the scale of some increases means IT departments and finance teams are now looking much more closely at how effectively they are using their Microsoft 365 licences.

For many businesses, Microsoft 365 is one of the largest recurring IT expenses. A 10–20% increase across hundreds or thousands of users can add tens of thousands of pounds or dollars to annual operating costs. The good news is that many organisations are already paying for licences they don't fully use—and that's where licence optimisation can deliver immediate savings.

What's Changing?

Microsoft's updated commercial pricing affects many Business, Enterprise and Frontline subscriptions, with changes taking effect from 1 July 2026 for new purchases and renewals. While some plans remain unchanged, many of the most commonly deployed subscriptions have increased, including:

• Microsoft 365 Business Basic

• Microsoft 365 Business Standard

• Microsoft 365 Enterprise E3

• Microsoft 365 Enterprise E5

• Various Frontline (F-Series) licences

The exact increase varies by licence type, with some Frontline licences seeing increases exceeding 25%, while Enterprise plans typically rise between 5% and 13%. Microsoft states these changes reflect continued investment in AI capabilities, security, collaboration and cloud services.

Regardless of the reason, organisations now face a simple question:

Are we getting full value from every Microsoft 365 licence we pay for?

Most Organisations Are Paying for Unused Licences

After working with hundreds of organisations, one trend consistently appears.

Very few companies have perfect visibility into how Microsoft 365 is actually being used.

Common issues include:

• Employees who have left but still retain assigned licences

• Users licensed for premium services they never use

• Multiple licences assigned when only one is required

• Premium features enabled but rarely accessed

• Dormant accounts consuming subscription costs

• Licences purchased "just in case" but never allocated

These hidden inefficiencies often accumulate over several years. Before long, organisations can be spending thousands every month on software that delivers little or no business value.

Price increases simply magnify this waste.

Visibility Is the First Step to Cost Control

Licence optimisation isn't simply about removing licences.

It's about understanding how your users actually work.

Questions every IT team should be able to answer include:

• Which Microsoft 365 licences are actively used?

• Which users only require lower-cost subscriptions?

• When are licenses due for renewal?

• Which premium features are never accessed?

• Are Teams, OneDrive and SharePoint being adopted?

• Which licences have remained inactive for 30, 60 or 90 days?

• Where are duplicate or unnecessary subscriptions assigned?

Without continuous monitoring, these questions often require manual reporting from multiple Microsoft portals—making optimisation time-consuming and infrequent.

Introducing Continuous Licence Optimisation with CIQ® Cloud

CIQ® Cloud provides continuous visibility into Microsoft 365 licensing, usage and adoption, allowing organisations to make informed decisions based on real data rather than assumptions.

Instead of performing a licence review once a year before renewal, CIQ Cloud continuously analyses your Microsoft 365 environment and highlights opportunities to reduce unnecessary spend.

Key capabilities include:

Licence Usage Analysis

Understand exactly how licences are being consumed across your organisation.

Identify:

• Inactive users

• Underutilised subscriptions

• Over-licensed users

• Unassigned purchased licences

• Licence trends over time

User Activity Monitoring

Monitor actual adoption across Microsoft services including:

• Microsoft Teams

• Exchange Online

• OneDrive

• SharePoint Online

• Microsoft Entra ID

• Intune

• Power BI

This provides a much clearer picture of which services deliver value and where additional training or licence adjustments may be beneficial.

Licence Optimisation Recommendations

Rather than simply presenting raw data, CIQ Cloud highlights practical optimisation opportunities, such as:

• Downgrading users to lower-cost licences

• Recovering licences from inactive accounts

• Identifying duplicate assignments

• Highlighting dormant guest accounts

• Detecting unused premium capabilities

These recommendations help IT teams reduce subscription costs without impacting productivity.

Optimisation Should Extend Beyond Microsoft 365

Microsoft 365 is only one part of today's SaaS landscape.

Most organisations also subscribe to dozens of cloud services including:

• Google Workspace

• AWS

• OpenAI

• Network monitoring platforms

• Security solutions

• CRM systems

• Collaboration tools

• Finance applications

Each subscription introduces additional recurring costs.

Many organisations have excellent visibility into Microsoft licensing but very little understanding of the total cost of their cloud estate.

CIQ Cloud was designed to solve this challenge.

By providing a unified monitoring platform across multiple cloud services, organisations gain a single view of licence usage, security posture, service health and optimisation opportunities.

Instead of managing every platform independently, IT teams can identify waste across their entire cloud environment.

Beyond Cost Savings

Licence optimisation isn't only about reducing expenditure.

Better visibility also improves:

• Security by identifying dormant or unnecessary accounts

• Compliance through accurate user licensing

• Operational efficiency by simplifying licence management

• Budget forecasting using historical trends

• Software adoption by highlighting underused services

For many organisations, the operational benefits become just as valuable as the direct financial savings.

The Best Time to Review Your Licences Is Before Renewal

With Microsoft 365 pricing increasing, many organisations will naturally focus on negotiating better renewal terms.

However, the biggest savings often come before negotiations even begin.

Removing just 5–10% of unnecessary licences can offset much of the latest price increase without reducing productivity or user experience.

Continuous monitoring ensures those savings don't disappear over the following months as users join, leave or change roles.

Final Thoughts

Microsoft's latest pricing changes are unlikely to be the last. As cloud platforms continue to evolve with AI, enhanced security and new productivity features, subscription costs will inevitably continue to grow.

The organisations that manage these increases most successfully will not simply negotiate better prices—they will ensure every licence delivers measurable value. Whether you are an MSP looking after your customer licenses or an Enterprise IT business unit, CIQ Cloud helps organisations achieve exactly that.

Through continuous Microsoft 365 monitoring, licence optimisation, cloud usage analytics and cross-platform visibility, CIQ Cloud enables IT teams to reduce unnecessary costs, improve governance and maximise the return on every cloud subscription they purchase.

In an era of rising software costs, visibility isn't just useful—it's essential.