Microsoft 365 (formerly Office 365) is Microsoft’s cloud-based productivity suite launched in 2011, combining Word, Excel, PowerPoint, Outlook, Teams, OneDrive, and SharePoint in one subscription. As of early 2026, over 430 million people use Microsoft 365 apps globally with more than 90% of Fortune 500 companies using the platform. The Business plans are capped at 300 users; larger organizations use the Enterprise tier.
Three core Business plans are relevant for SMBs and teams. Business Basic at $6/user/month (annual) covers web and mobile versions of Office apps only — no desktop installs — plus Exchange email with 50GB mailbox, Teams, SharePoint, and 1TB OneDrive storage per user. This is the entry point for teams that primarily need email hosting and collaboration without desktop Office. Business Standard at $12.50/user/month (annual) adds desktop versions of all Office apps (Word, Excel, PowerPoint, Outlook, Access on PC) and Microsoft Teams with meeting recordings and transcription. Business Premium at $22/user/month (annual) adds advanced security via Microsoft Defender for Business, Intune device management, and Azure AD Premium P1 — the recommended tier for any organization handling sensitive data, healthcare records, or operating in regulated industries. All Business plans are capped at 300 users.
Microsoft announced global pricing updates effective July 1, 2026. Business Basic increases from $6 to $7/user/month and Business Standard increases from $12.50 to $14/user/month. Business Premium remains unchanged at $22/user/month. The increases are attributed to new bundled capabilities including expanded Copilot Chat features, additional mailbox storage, Microsoft Defender for Office 365, and enhanced Intune management tools. Existing customers on active annual agreements remain on current pricing until their renewal date after July 1 2026.
Microsoft 365 Copilot — the AI assistant that integrates with Office apps — is not included in any Business plan. It is available as a separate add-on at $30/user/month for qualifying plans. Monthly billing is 20% more expensive than annual commitment pricing across all tiers. An independent audit typically surfaces 10–20% in unused or oversized licenses at most organizations — a review before renewal can reduce costs meaningfully.
