There’s a familiar rhythm to Microsoft renewals. The date approaches. Someone checks the user numbers. Budgets are confirmed. And, unless something obviously needs changing, last year’s licences become next year’s licences. It’s efficient.
But heading into 2027, it could also mean renewing for the Microsoft environment you had, rather than the one you’re going to need.
Microsoft’s security proposition is evolving. E7 adds another option to the familiar E3 versus E5 conversation. AI is changing how organisations think about security and productivity. And the Microsoft estate you built for 2025 or 2026 might not be the one you would design today.
So, before anyone reaches for the virtual rubber stamp, there’s a useful question to ask:
If you were designing your Microsoft estate for 2027 today, would you buy exactly what you already have?
Don't budget using yesterday's numbers
Cost is an obvious place to start.
Microsoft introduced new commercial pricing across parts of its Microsoft 365 portfolio in July 2026, meaning businesses approaching renewal need to understand what their existing estate will actually cost when the new term begins.
But headline licence price only tells part of the story.
A cheaper licence isn’t necessarily better value if you then need several additional products to provide the capabilities your organisation needs. Equally, paying for a higher-tier licence makes little sense if those additional capabilities are never used.
So rather than asking “How much are our Microsoft licences?”, take a step back.
What are you paying for? What are you actually using? What sits alongside Microsoft today? And where are you spending twice to solve essentially the same problem?
The useful number isn’t simply today’s Microsoft bill. It’s the cost of delivering what the business actually needs next.
E3 versus E5 is no longer just a feature comparison
For organisations thinking seriously about cyber security, the difference between Microsoft 365 E3 and E5 goes beyond productivity features.
An E3 environment may need additional security capabilities depending on the organisation’s requirements and security operating model. E5 can bring more of those capabilities within the Microsoft estate.
That changes the calculation.
Instead of simply comparing:
E3 versus E5
Think about:
The total cost and capability required to achieve the outcome you actually need.
For some organisations, retaining E3 and adding specific capabilities may be the right approach. For others, consolidating more within E5 could make more sense. And heading into 2027, there’s another option to consider.
E7 adds a new question to the renewal conversation
E7 means the Microsoft conversation doesn’t necessarily stop at E5.
For organisations looking at more advanced security operations and greater use of AI, it introduces another potential route. But that doesn’t make E7 an automatic next step from E5, or mean every security-conscious business needs it.
The more useful question is what you’re trying to achieve.
Do you need to close specific gaps in an E3 environment? Would bringing more security capability together within E5 simplify your estate? Could E7 support the direction you want to take security operations and AI?
Then look at what each option means across your whole environment. The most expensive licence isn’t automatically the best one.
The right licence is the one that has a clear job to do.
Look at the security strategy, not just the licence
There’s a bigger reason to have this conversation before you renew.
Microsoft is increasingly bringing security data, tools and AI-assisted workflows together. That means licensing decisions can influence more than which applications employees can open.
They can affect how the organisation protects users and data, investigates threats and operates security day to day.
But having access to more capability doesn’t automatically make an organisation more secure.
Will you use it? Do you have the skills to manage it? How does it fit alongside your Security Operations Centre (SOC)? Could existing third-party tools become unnecessary, or do they still provide capabilities you need?
Otherwise, it’s perfectly possible to buy more security technology without becoming meaningfully more secure.
Renew the licences first and ask the security questions later, and you’ve got the process backwards.
Put your Q1 renewal through the five question test
1what are we actually using today?Not simply what you’ve bought. What’s deployed, adopted and delivering value?
2what will our existing estate cost at renewal?Budget using your 2027 position, not an old invoice.
3what else are we paying for around Microsoft?Look particularly at areas such as security where capabilities may overlap.
4what would e3, e5 and e7 actually mean for us?Compare the outcome and total requirement, not simply the licence price.
5what are we planning to do next?Your security, AI and wider technology roadmap should influence what you commit to now.
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There's a simple principle behind all five.
Don't just renew the licence. Review the investment.
Your 2027 Microsoft estate doesn't have to look like your 2026 one
That’s the opportunity a renewal creates.
You can carry everything forward because it’s familiar. Or you can use the moment to understand what you’re paying for, what people are actually using and whether those decisions still support where the organisation is heading.
You might conclude that E3 remains exactly the right fit. You might identify a stronger case for E5. E7 might deserve consideration. Or you might discover that the real opportunity is getting greater value from capabilities you already own.
Doing nothing different can be a perfectly sensible licensing decision. Doing nothing because nobody checked isn’t.
Look beyond the renewal with Intercity
That’s why Intercity looks at Microsoft renewal as part of a wider investment conversation.
Licensing doesn’t sit neatly in one box anymore. Decisions around E3, E5 or E7 can connect to security, AI, existing third-party technology, skills and what you want your Microsoft environment to do over the next few years.
The goal isn’t to add complexity or push every organisation towards a bigger licence.
It’s to understand where you are today, what you’re already paying for and where you’re heading, then make the next investment deliberately.
Because your next Microsoft agreement shouldn’t simply reflect where your organisation has been.
It should support where you’re going next.
Thursday 12 November, 10am GMT
Live on Microsoft Teams
Join our webinar: Beyond the Renewal - Maximising your Microsoft Investment
If your Microsoft renewal is approaching early 2027, don’t start with the paperwork.
Join Intercity’s Beyond the Renewal: Maximising Your Microsoft Investment webinar for a practical look at what’s changing, what E3, E5 and E7 could mean for your organisation, and how security and AI should influence the decisions you make next.
