Microsoft is changing commercial Microsoft 365 pricing from 1 July 2026. At the same time, it is pushing Copilot more firmly into the Microsoft 365 ecosystem. For SMEs, that means this is no longer just a software-subscription issue. It is a budgeting, productivity and licence-review issue.
If you are an MD or FD, the practical question is not, “What has Microsoft launched now?”, it should be, “Are we about to spend more on the wrong setup?”
What is changing for Microsoft 365?
Microsoft has confirmed that new commercial pricing for Microsoft 365 suites and standalone products takes effect on 1 July 2026. The change applies globally, with local market adjustments, and existing customers will see the new prices at renewal after that date.
That matters because many SMEs are still on licences they chose years ago and have never properly reviewed. So, the real risk is not only a price rise, but continuing to pay for licences, users, or tools that no longer fit the business.
Where Copilot is confusing businesses
This is where many businesses get tripped up.
Microsoft now includes Copilot Chat at no extra cost for eligible Microsoft 365 users.
That means many organisations already have access to a web-based AI chat experience through their Microsoft 365 entitlement.
But that does not mean every business suddenly has the full version of Microsoft 365 Copilot, and the majority don’t have their data structured in a manner to maximise its use.
Microsoft’s own licensing guidance distinguishes between Copilot Chat and Microsoft 365 Copilot. Web-based Copilot Chat uses internet information and is included for eligible users. A paid Microsoft 365 Copilot licence adds broader value across the Microsoft 365 stack, including deeper integration with apps and additional user and admin capabilities.
In plain English, included Copilot Chat is useful. Paid Copilot is where the bigger commercial decision starts.
So, what does the addition of Copilot actually mean?
For SMEs, it means Microsoft is making AI a normal part of the workplace stack rather than a separate experiment. Microsoft says Copilot Chat now includes enhancements such as inbox and calendar awareness and access to Word, Excel and PowerPoint agents for Microsoft 365 users.
That sounds impressive, and in some cases it will of genuine value.
If your team works heavily in Outlook, Teams, Word, Excel and PowerPoint, Copilot may help reduce admin time, speed up routine drafting and improve output.
But, if your data is messy, permissions are loose, files are hard to find, or people barely use the platform properly, then adding paid AI licences may simply increase costs without producing meaningful gains.
Does every SME need paid Copilot?
No, and that’s the main point many articles miss.
The right question is not, “Can we get Copilot?” The right question is, “Which roles would save enough time or improve enough output to justify it?”
In most SMEs, the first people to assess are leadership, finance, marketing, operations, sales support and admin-heavy roles. These are usually the people buried in email, documents, reporting and repetitive information handling.
If this software can help modernise your IT, streamline your IT strategy and save time, then it’s a worthy investment for these roles.
For everyone else, it may be smarter to hold off, use the included Copilot Chat where appropriate, and focus first on licence clean-up and better use of the Microsoft tools you already pay for.
For everyone else, it may be smarter to hold off, use the included Copilot Chat where appropriate, and focus first on licence clean-up and better use of the Microsoft tools you already pay for.
What about Microsoft 365 Copilot Business?
Microsoft is also positioning Microsoft 365 Copilot Business for organisations with up to 300 users.
On Microsoft’s UK business page, it is currently listed from £13.80 per user per month paid yearly, with a displayed standard starting price of £16.10, excluding VAT.
Microsoft also shows business plan bundles that combine Microsoft 365 with Copilot for eligible customers. These offers are promotional and can change, so they should always be checked at decision time.
That makes Copilot more accessible than it was at first. But accessible does not mean every business should buy it.
What should SMEs do now?
First, review your current Microsoft 365 licences before renewal. If you need help figuring out your licensing, get in touch with our team, and we can help.
A lot of SMEs are carrying inactive users, duplicated tooling or plans that no longer match how the business operates, and, put simply, they’re wasting money.
Second, separate AI interest from actual business needs. If Copilot is going to earn its keep, there should be a clear case around saved time, faster workflows, better reporting, or less admin drag.
Third, treat this as a commercial IT review, not a tech purchase. Microsoft 365 should support efficiency, security, and control. If costs are rising anyway, this is the right time to ask whether your setup is genuinely helping the business perform better.
Key takeaways
The most important factor to consider is whether your business is spending wisely on a platform that should be making people more productive.
Not sure whether you are on the right Microsoft 365 licences, or whether Copilot would create value or just extra cost? Give our team a call or book a no obligation IT review.
Newsletter
Subscribe for monthly IT advice and a chance to get Co-Op Live tickets.