Microsoft license changes in 2026: Everything you need to know.

With over 60% of license renewals occurring in Q1 next year, we explore what Microsoft’s latest changes mean, why they matter and how to get ahead of it now.

Microsoft has announced the biggest wave of new licence bundles we have seen in years. New Copilot plans. New Defender and Purview suites. Major changes across the Microsoft 365 Business family. All arriving ahead of a global price rise on 1 July 2026.

For many organisations, the detail feels buried in product pages and acronyms, yet the impact will be unavoidable. Pricing will shift. Bundles will change. Choices will matter. So we decided to cut through the noise.

To bring this to life, meet Sarah.

She runs IT for a 250 person organisation. Sensible. Busy. Stretched. The Microsoft estate she inherited is a patchwork built over years. And for Sarah, 2026 is a moment of truth. She can streamline and strengthen now or roll into renewal and act later. If you have ever sat where Sarah sits, this is for you.

The three concepts Sarah needs to know first...

Copilot. Defender. Purview.

These three pillars sit underneath every new licence Microsoft has released.

1. Copilot: AI inside the tools her teams already use. Drafting, summarising, analysing and automating everyday work.
2. Defender: Microsoft’s security stack that protects users, devices, email and cloud apps.
3. Purview: Data protection and governance so sensitive information stays controlled.

The Microsoft 365 Business plans

A clear comparison and why Business Premium stands out

1. Business Basic: For frontline and light users. Web apps, email, Teams. No desktop apps or device management.
2. Business Standard: For office workers who rely on full desktop apps and collaboration tools.
3. Business Premium: For organisations that want a secure, controlled and modern baseline. Adds Intune, Defender for Business and Purview Information Protection.

For Sarah, this is the plan she wants as her organisation’s default landing zone. One secure, managed and consistent foundation that reduces risk and simplifies everything that follows.

In one line for the board: Basic is communication. Standard is productivity. Premium is security and control.

Copilot for SMB

The biggest shift and why Copilot Business is the smart choice

Copilot Business (standalone add on): The full Copilot experience for organisations under 300 users.

In Word, Excel, PowerPoint, Outlook and Teams, with Copilot Chat included.

For Sarah, this is the new standard. It is the simplest, fastest way to get AI working across the organisation with measurable impact.

• Business Basic with Copilot: Strong option for large frontline teams but limited creation workflows.
• Business Standard with Copilot: High value for knowledge workers but still depends on strong security underneath.
• Business Premium with Copilot: The ideal pairing. A secure, managed estate with AI built in from day one. This is where Sarah wants to land her core workforce. It delivers the most consistent experience and the strongest value story.

Defender Suite

Defender Suite for Business Premium Adds advanced identity, endpoint, email and cloud app protection. For Sarah, this becomes her natural upgrade path once Premium is in place. She replaces multiple third party tools with a single integrated stack.

She avoids surprises by planning tenant wide licensing so protection does not fall back to a lower tier.

Purview Suite

How Sarah gets ahead of compliance and safe AI use

Purview Suite for Business Premium (The renamed E5 Compliance suite for larger environments): Adds data loss prevention, sensitivity labels, records management, insider risk and eDiscovery.

For Sarah, this is how she ensures Copilot can be rolled out safely. It gives her control over the data that AI will surface and generate.

The pressure point: Microsoft’s global price rise on 1 July 2026

If Sarah keeps her estate fragmented, the price rise will hit hard. If she consolidates around Business Premium and Copilot Business, her estate becomes predictable, scalable and easier to justify to the board. She is focusing on:

• Removing unused licences
• Moving core users to Business Premium as the standard build
• Pairing Premium with Copilot Business for clear productivity gains
• Adding Defender and Purview suites where risk genuinely warrants it
• Modelling the 2026 impact before renewal

How Intercity helps businesses take control:

• Audit your estate: We show you what you own, what you uses and where the waste sits.
• Build a standard pattern centred on Business Premium: Frontline on Basic. Office staff on Premium with Copilot. Sensitive roles upgraded with Defender and Purview where needed.
• Secure and govern before scaling AI: We align Defender and Purview so Copilot is introduced safely and responsibly.
• Plan renewals around the 2026 changes: We model scenarios and help present a clear, board-ready licensing plan.

Ready to get ahead of 2026?

• If Sarah’s situation sounds familiar, you are not alone. We support IT leaders across the UK who want clarity, stability and a licensing strategy that works.
• Bring us your current setup and we will map where Business Premium, Copilot Business, Defender and Purview add real value and where you can simplify without risking performance or security.