Microsoft Announces Major Microsoft 365 Enhancements and Pricing Updates: What IT Leaders Need to Know for 2026

Microsoft has released a significant update detailing new AI, security, and management capabilities coming to Microsoft 365 in 2026—along with a commercial price increase that will take effect on July 1, 2026. 
This announcement signals two things very clearly: 

• Microsoft is rapidly expanding the baseline value of M365 across all tiers, especially around Copilot, security, and endpoint management
• Organizations need to begin planning for licensing and budget impacts now, because the changes touch Business, Office, and Enterprise suites.

CloudServus has already begun advising clients on how to assess these upcoming adjustments, and this blog breaks down what IT leaders should know as they prepare for FY26 budgets and roadmap decisions. 

Full Microsoft announcement: 
https://www.microsoft.com/en-us/microsoft-365/blog/2025/12/04/advancing-microsoft-365-new-capabilities-and-pricing-update/ 

Expanding AI Access Across the Microsoft 365 Ecosystem 

Microsoft’s update reinforces a trend we’re seeing across our client base: Copilot is becoming a foundational expectation, not an optional add-on. 

Copilot Chat Becomes Central to the Microsoft 365 Experience 

Microsoft is expanding Copilot Chat availability—bringing it into: 

• Word
• Excel
• PowerPoint
• Outlook
• OneNote 

And more importantly, Copilot will now understand your inbox, calendar, and documents, supporting iterative document creation and workflow automation through Agent Mode. 

Microsoft continues strengthening the administrative controls, giving IT teams more insight into usage, guardrails, and governance—critical for organizations preparing to scale AI across departments. 

For organizations assessing Copilot readiness, CloudServus offers a dedicated AI Readiness Assessment that evaluates permissions, data boundaries, governance, and risk: 
https://www.cloudservus.com/assessments/ai-readiness-assessment 

Strengthening Security for More Users 

Security enhancements are a major part of this update, especially for mid-market organizations and those currently on E3. 

Defender for Office P1 Added to Office 365 E3 and Microsoft 365 E3 

This expands access to phishing, malware, and malicious link protection—bringing E3 users closer to E5-level security capability. 

URL Protection Extended to Lower-Tier Licenses 

Users in: 

• Office 365 E1
• Business Basic
• Business Standard 

will now gain URL scanning and malicious link protection across email and Office apps. 

This closes a long-standing gap for organizations supporting frontline or part-time staff on lower-tier SKUs. 

These additions reinforce a larger theme we help customers evaluate: 
Microsoft is consolidating security value into core licensing—reducing the need for third-party cybersecurity tools. 

CloudServus supports IT leaders through detailed Microsoft 365 security posture assessments: 
https://www.cloudservus.com/assessments/cloud-security-assessment 

More Endpoint Management Capabilities Included in M365 E3 and E5 

Microsoft is pushing more Intune capabilities into the base E3 and E5 suites, strengthening endpoint governance without requiring additional add-on purchases. 

New capabilities added to M365 E3 and E5 include: 

• Intune Remote Help
• Intune Advanced Analytics
• Intune Plan 2 

For M365 E5 customers, Microsoft is also adding: 

• Intune Endpoint Privilege Management
• Enterprise Application Management
• Microsoft Cloud PKI 

These updates arm IT teams with better tools to secure devices, respond to issues faster, and implement controlled privileged access—essential as AI tools become accessible across endpoints. 

Security Copilot Coming to All Microsoft 365 E5 Customers 

Security Copilot agents—currently only available to existing Security Copilot customers licensed with Microsoft 365 E5—are being rolled out to all M365 E5 tenants soon. 

These agents will integrate directly into: 

• Microsoft Defender
• Microsoft Entra
• Intune
• Microsoft Purview 

With access to more than 70 Microsoft and partner-built agents, security teams can accelerate investigation, remediation, and policy enforcement. 

This continues Microsoft’s vision of AI-augmented security operations, something CloudServus regularly guides clients through as part of broader Microsoft security modernization. 

New Capabilities Coming to Microsoft 365 Business, Office 365, and Enterprise Plans 

Although Microsoft published detailed charts on what each SKU will include, the broader theme is clear: 

• More AI in Business Premium and Enterprise plans
• More security value added directly to core suites
• More endpoint management and governance built into Microsoft 365 

For organizations evaluating whether to stay on E3 or move to E5, these changes may shift ROI calculations—especially for organizations considering third-party tools that Microsoft is effectively replacing. 

Microsoft 365 Pricing Changes Effective July 1, 2026 

Microsoft will increase list pricing for M365 suites beginning mid-2026. 
Pricing updates apply to SKUs with Teams included as well as SKUs without Teams. 

The adjustments apply globally, and Microsoft has confirmed nonprofit pricing will increase proportionally. 

This change makes license optimization more important than ever. Most organizations we assess are carrying unused licenses, redundant SKUs, or overprovisioned E5 seats. 

CloudServus offers a Microsoft Licensing Assessment that identifies savings opportunities and SKU alignment strategies: 

What IT Leaders Should Do Now 

With price changes almost 6 months away, organizations have time—but not as much as it seems. CloudServus recommends focusing on: 

1. Reviewing current Copilot readiness

AI capabilities will be more deeply embedded in the suite; governance matters. 

2. Preparing a licensing impact model for FY26

Budget visibility early is critical. 

3. Evaluating E3 vs. E5 based on the new feature set

Several security and endpoint features are shifting into base suites, which may influence your licensing roadmap. 

4. Assessing overlap with third-party security tools

Many organizations pay for features now included in Microsoft 365. 

5. Creating an endpoint strategy aligned with new Intune enhancements

Device governance is tightening, especially as AI endpoints expand. 

CloudServus supports organizations through all five of these decisions, helping IT leaders strengthen security, lower cost, and gain clarity across their Microsoft environment. 

How CloudServus Helps You Navigate What Comes Next 

CloudServus is a Top 1% Microsoft Solutions Partner and Azure Expert MSP, uniquely positioned to support organizations preparing for the evolution of Microsoft 365. 

We help clients: 

• Model pricing impacts across E1/E3/E5 and Business plans
• Evaluate and consolidate licensing to reduce cost
• Build long-term Microsoft licensing strategies that adapt to change
• Prepare for Copilot adoption with proper governance
• Strengthen security posture with Microsoft-native tooling 

As Microsoft accelerates its AI roadmap and reshapes the value of its suites, IT leaders need expert guidance to ensure their environments, governance frameworks, and budgets are aligned. 

Start with a Microsoft Licensing Assessment. 

CloudServus ensures you get maximum value from Microsoft 365 while maintaining security, oversight, and cost control.