Microsoft has announced another global pricing and packaging update for many of its Microsoft 365 commercial, business, frontline, government, and standalone products. The new pricing takes effect on July 1, 2026, with existing customers staying on their current pricing until their next renewal.
At Thexyz, we resell Microsoft 365 plans in both CAD and USD. Like every Microsoft partner, we’re subject to Microsoft’s upstream licensing changes, currency adjustments, and reseller costs. As a result, Microsoft’s increases will be passed through to affected Microsoft 365 customers at renewal.
This does not affect Thexyz Email plans.
What’s Changing?
Microsoft says the 2026 update reflects added value from new AI, security, compliance, storage, and IT management features. These include Copilot Chat enhancements, Microsoft Defender for Office 365 Plan 1, expanded Intune capabilities, URL time-of-click protection, and other additions bundled into existing tiers.
The increases vary widely by product. Across the commercial catalog, affected plans are rising by roughly 5% to 43%, depending on the plan and region. For example, Office 365 E3 moves from $23 to $26 per user/month (+13%), while Microsoft 365 E5 rises about 5%. Frontline plans (F1 and F3) see the steepest percentage jumps. Notably, Microsoft 365 Business Premium pricing is holding flat, while Business Basic and Standard both increase. Microsoft has also noted that final pricing may vary by country and currency.
The key dates are simple:
- July 1, 2026: new Microsoft 365 commercial pricing takes effect for new orders and renewals.
- Your renewal date: when existing customers see the increase applied.
This Isn’t the First Microsoft Price Increase
Microsoft 365 pricing has been climbing for several years:
- March 2022: Microsoft implemented its first major commercial Microsoft 365 price increase in years, raising prices across several business and enterprise plans.
- January 2025: Microsoft added Copilot to Microsoft 365 Personal and Family plans in many markets and increased consumer pricing, tying the higher cost to AI features.
- April 2025: Microsoft introduced a 5% premium for many annual subscriptions billed monthly, so businesses wanting annual pricing with monthly payments began paying more for that flexibility.
- July 2026: Microsoft raises prices again across many commercial and business suites.
The pattern is clear. Microsoft 365 is becoming more deeply tied to AI, security, compliance, and enterprise management features. These tools may be valuable for some organizations, but they also add cost and complexity. As Microsoft keeps investing heavily in AI, businesses should expect Microsoft 365 to keep moving upmarket.
If you want a deeper look at navigating these hikes, see our guide on how to avoid Microsoft’s price hikes with affordable email alternatives.
The Problem for Small Businesses
Many small businesses simply need reliable email, calendars, contacts, webmail, mobile access, spam protection, and support.
They don’t necessarily need every AI assistant, enterprise compliance module, or management feature bundled into Microsoft 365. But as these features become part of the package, the price of staying inside that ecosystem keeps rising.
For businesses watching costs carefully, this is a good time to ask:
Do we need the full Microsoft 365 stack, or do we mainly need dependable business email?
Thexyz Email: A Stable, Cost-Effective Alternative
Thexyz offers professional email hosting built around reliability, privacy, and open standards. If you want business-class email without being locked into an increasingly expensive Microsoft bundle, Thexyz Email is a strong alternative.
Our plans are simple and transparent:
| Plan | Price | Best For | Highlights |
|---|---|---|---|
| 10 GB Email | $2.95/month | Personal use | Webmail and mobile access, spam and virus shield, 25 aliases included, upgrade anytime |
| 25 GB Email | $4.95/month | Professionals (most chosen) | Everything in 10 GB, plus ActiveSync support, video calls, and Zulip chat |
| 50 GB Email | $6.95/month | Power users and teams | Everything in 25 GB, plus maximum data retention, priority support, and room to grow |
Optional add-ons:
- Enhanced upgrade: +$2 USD
- Extra storage per additional 25 GB: $2 USD
- Distribution lists: $0.20 USD
- Aliases: 25 included, 100 for $1, 500 for $2, unlimited for $5
Why Switch to Open Source and Open Standards?
Thexyz is built for customers who want dependable email without being forced into a constantly expanding software bundle. We support open standards, privacy-conscious hosting, and practical tools that work across devices and mail clients.
You can use Thexyz Email with standard email apps, mobile devices, webmail, and business workflows without buying into a large productivity suite.
For many businesses, that means:
- Lower monthly costs
- Less vendor lock-in
- More predictable pricing
- Professional email without unnecessary extras
- Support from a Canadian company that has been hosting email since 2006
Curious about the numbers? Read our breakdown of how much your organization can save by switching to open source email hosting.
Microsoft 365 Still Has Its Place
Microsoft 365 can be a good fit for organizations that rely heavily on Word, Excel, Teams, SharePoint, OneDrive, Intune, Defender, and Copilot. We continue to support and resell Microsoft 365 for customers who need it.
But if your main requirement is secure, reliable email, Thexyz Email may be the better long-term choice.
A Good Time to Review Your Email Costs
With Microsoft 365 prices increasing again on July 1, 2026, now is a good time to review your current licensing, renewal date, and actual usage.
If you’re paying for Microsoft 365 mainly to get business email, switching to Thexyz could significantly reduce your monthly costs while keeping your communication reliable and professional.
Ready to move away from rising Microsoft 365 costs? Switch to open source and open standards with Thexyz Email.
