If your business runs on Microsoft 365 — and most small businesses do — you’ll want to pay attention to some changes coming this summer.

Microsoft has announced updates to its 365 subscription plans that will take effect in July 2026. While some of these are minor, others could affect your monthly costs, the tools your team has access to, and how your data is stored.

Here’s a plain-English breakdown of what’s happening and what you should do about it.

What’s Changing?

Microsoft regularly adjusts its 365 plans — adding new features, bundling tools differently, and occasionally raising prices. The July 2026 update continues that pattern. Here’s what we know so far:

Price Adjustments

Some Microsoft 365 Business plans are seeing modest price increases. If you’re on a monthly plan rather than an annual commitment, the increase may be more noticeable. For a business with 25–50 employees, even a few dollars per user per month adds up quickly.

New Features Bundled In

Microsoft is adding AI-powered features (under the Copilot brand) to more plan tiers. While that sounds exciting, not every business needs or wants these tools — and they may be contributing to the price bump.

Storage and Compliance Changes

Some plans are seeing adjustments to storage limits and data retention policies. If your business relies heavily on SharePoint, OneDrive, or Exchange Online archiving, it’s worth reviewing how these changes affect your setup.

Why This Matters for Small Businesses

For larger companies with dedicated IT teams, changes like these are just part of the routine. But for a small business, any change to a core tool like Microsoft 365 can feel disruptive.

Here’s why it’s worth paying attention:

• Budget impact: Even small per-user increases add up across your team. A $3/user/month increase for a 40-person company means an extra $1,440 per year.
• Feature overload: New tools and AI features can be confusing if your team doesn’t know they exist — or how to use them safely.
• Backup gaps: Many business owners assume Microsoft backs up all their data automatically. It doesn’t. Changes to storage and retention policies make this even more important to understand.

What You Should Do Before July

1. Review Your Current Plan

Do you know exactly which Microsoft 365 plan you’re on? Many business owners set it up years ago and haven’t looked at it since. Log into your admin center or ask your IT provider to review what you’re paying for versus what you’re actually using.

2. Check Your Backup Strategy

Microsoft 365 is not a backup solution. If an employee accidentally deletes a critical file or an attacker compromises your account, Microsoft’s built-in recovery options are limited. Make sure you have independent backup in place for your email, files, and cloud data.

3. Lock in Annual Pricing

If you’re currently on a month-to-month plan, switching to an annual commitment before the changes take effect could save you money. Talk to your IT provider about the best timing.

4. Train Your Team on New Features

If AI-powered tools are being added to your plan, make sure your team knows how to use them — and understands the boundaries. AI tools can be incredibly helpful, but they also raise questions about data privacy and accuracy that your team should be aware of.

5. Talk to Your IT Provider

If you work with a managed IT provider, now is the time to have a conversation about these changes. A good provider will already be reviewing your account and preparing recommendations.

The Takeaway

Microsoft 365 changes don’t have to catch you off guard. A little preparation now — reviewing your plan, checking your backups, and having a conversation with your IT team — can save you money and headaches this summer.

Not sure how the July changes affect your business? Contact us for a quick review of your Microsoft 365 setup — no obligation, no pressure.