Panoramic view of the Microsoft office building on November 18, 2025 in Cologne, Germany.
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microsoft announced Thursday that it will increase prices on Office productivity software subscriptions for commercial and government customers starting July 1.
The company’s Office applications, including Word, Excel, PowerPoint, and Outlook, have faced increased competition in recent years. google.
“We continue to invest and innovate our platform for the future,” Nicole Herskowitz, corporate vice president of Microsoft 365 and Copilot, said in a blog post. “Last year, we released more than 1,100 features across Microsoft 365, Security, Copilot, and SharePoint.” The new features added value to the suite, she wrote.
Price increases for commercial Office subscriptions have not been common in the past. In 2022, Microsoft increased the price of its productivity bundle for the first time since launching the original Office 365 subscription in 2011. Microsoft changed the name of Office 365 to Microsoft 365 in 2020. In January, Microsoft announced price increases for consumer Office bundles.
Microsoft offers an Office 365 subscription for commercial use, which includes access to productivity applications, and a more expensive Microsoft 365 subscription, which also includes Windows operating system updates.
The breakdown of commercial price changes is as follows:
For small businesses, Microsoft 365 Business Basic costs between $6 and $7 per person per month. Microsoft 365 Business Standard will be available for $14, down from $12.50. Microsoft 365 Business Premium remains priced at $22. Entry-level Office 365 E1 products for enterprises will continue to be sold for $10. Office 365 E3 increases 13% from $23 to $26. The 365 E3 package that includes Windows for Enterprise will increase in price by 8% from $36 to $39. Full-featured Microsoft 365 E5 is priced from $57 to $60. The cost of Microsoft 365 F1 subscriptions for front-line workers like cashiers will increase from $2.25 to $3. Microsoft 365 F3 will be available for $8 to $10.
The U.S. Department of Defense and other government customers will face similar percentage increases.
Various subscriptions exclude access to the $30 Microsoft 365 Copilot add-on, which leverages generative artificial intelligence models. CNBC reported last week that while some companies have begun widespread deployment of Copilot, others are holding back on expanding their deployments.
Although organizations often receive discounts off list prices, Microsoft has reduced direct volume transactions for some types of customers.
Almost 43% of Microsoft’s first quarter fiscal revenue of $77.7 billion came from its Productivity and Business Processes division, which includes Office. In October, the company announced a 17% increase in revenue from its Microsoft 365 commercial cloud service and a 6% increase in seat capacity from products aimed primarily at small businesses and frontline workers.
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