Microsoft announced it will increase the prices of its Microsoft 365 productivity suites for commercial and government clients starting in July 2026.
This comes as the Microsoft suite, which includes Word, Excel and PowerPoint, faces growing competition from Google products.
In a blog post, the corporate vice president for Microsoft 365 and Copilot also said that new features have been added to the value of the suites.
“We are continuously investing and innovating our platform for the future,” she said.
“In the last year, we released more than 1,100 features across Microsoft 365, Security, Copilot, and SharePoint.”
The price hike will impact businesses and public sector agencies, with small business and frontline worker plans seeing the highest increase.
Microsoft 365 Business Basic plans will increase by 16.7% to US$7 per month, and the Business Standard will rise by 12% to US$14.
Enterprise plans are set to have smaller rises, with Microsoft 365 E3 to jump 8.3% to US$39 and E5 by 5.3% to US$60.
Frontline workers are set to see the greatest surge by as much as 33%, with the Microsoft 365 F1 rising from US$2.25 to $3 and F3 from $8 to $10 and Government suites will follow a similar trajectory.
All these values exclude the $30 Microsoft 365 Copilot add-on.
Microsoft infrequently announces price increases, as productivity prices have been raised for the first time in 2022 since launching Office 365 in 2011.
The company also announced a price hike for consumer Office bundles in January this year.
Around 43% of Microsoft’s $7.7 billion first-quarter revenue came from its Productivity and Business Processes segment, which includes Office.
In October, the company said revenue from Microsoft 365 commercial cloud services rose 17%, while seats increased 6%, mainly from products targeting small and medium-sized businesses and front-line workers.
