Microsoft 365 is Microsoft's cloud-based productivity and collaboration suite that brings together applications such as Word, Excel, PowerPoint, Teams, SharePoint, Exchange, and OneDrive in a centrally managed subscription model. For businesses, Microsoft 365 goes beyond office tools—it's a communication, collaboration, and security platform whose cost and compliance need to be actively managed. In 2026, the stack gained a new top tier with E7 (Frontier Suite) and Microsoft 365 Copilot as a mandatory AI layer for businesses adopting intelligent agents.
Microsoft 365 plans and licenses in 2026
The Microsoft 365 enterprise stack evolved in 2026 with the addition of E7 above E5. The complete hierarchy is now E1 → E3 → E5 → E7.
| Flat | Price (list) | Recommended profile | Main inclusions |
|---|---|---|---|
| Microsoft 365 Business Basic | ~$6/user/month | SMEs without desktop apps | Teams, Exchange, SharePoint, OneDrive (web) |
| Microsoft 365 Business Standard | ~$12.50/user/month | SMEs with desktop apps | Basic + Office desktop + Bookings |
| Microsoft 365 Business Premium | ~$22/user/month | SMEs with security requirements | Standard + Intune + Azure AD P1 + Defender |
| Microsoft 365 E3 | ~$36/user/month | Enterprise with advanced compliance. | Full apps + compliance + EMS E3 |
| Microsoft 365 E5 | ~$57/user/month | Enterprise security and analytics | E3 + Defender P2 + Power BI Pro + PSTN |
| Microsoft 365 E7 (Frontier Suite) | $99/user/month | Enterprise with AI, agents, and identity. | E5 + Copilot + Agent 365 + Entra Suite |
Prices are reference prices in USD (June 2026). CSP discounts: 10% for 10+ seats, 15% for 100+ seats annually.
Microsoft 365 E7 — the new top of the enterprise stack
Microsoft 365 E7, dubbed Frontier Suite by Microsoft, was announced in March 2026 and became available for purchase on May 1, 2026, at $$99/user/month. E7 is not simply E5 with Copilot added—it's a bundle of four previously separate products:
- Microsoft 365 E5 ($57/user/month as standalone)
- Microsoft 365 Copilot ($30/user/month as an add-on)
- Agent 365 ($15/user/month as standalone) — AI and identity agent orchestration via Entra Suite
- Microsoft Entry Suite ($12/user/month as standalone) — advanced identity governance
The combined standalone price comes to $114/user/month. The E7 at $99 represents a discount of approximately 13% compared to buying it separately — but It only makes financial sense if the organization actually needs all four components for all users.. For organizations that already purchased E5 + Copilot ($87/user/month), the E7 premium is $12 — which purchases Agent 365 and Entra Suite. Starting in July 2026, E5 + Copilot will increase to $90, reducing the E7 premium to $9.
Attention: the price of $99 does not cover all costs. The E7 introduces a hybrid model — seat + consumption. Copilot Cowork (available in GA since 06/16/2026) requires a Microsoft 365 Copilot E license plus usage charges via Copilot Credits. Microsoft Scout, the always-on personal agent, is still in the Frontier phase without public pricing.
Microsoft 365 Copilot — Licensing and Prerequisites
Microsoft 365 Copilot is licensed as an add-on for $30/user/month on top of a qualifying base plan. As of June 2026, there were 15 million paid seats, growing by 160% year-over-year. Base plans that qualify for the add-on include E3, E5, E7, Business Standard, Business Premium, and others.
Critical distinctions for license managers:
- Copilot Chat (Basic): Included free with eligible Microsoft 365 subscriptions. Access to web chat; does not include integration with Office apps, Teams meeting summaries, or presentation creation.
- Microsoft 365 Copilot (Enterprise): Paid add-on for $30/user/month. Unlocks built-in Copilot in Word, Excel, PowerPoint, Outlook, and Teams, with administrative controls, eDiscovery, DLP, and business data protection.
- The E5 does not include Copilot by default. Common mistake — the E5 qualifies as the base model, but Copilot needs to be purchased and assigned separately. Only the E7 includes Copilot natively.
Risk of oversharing: Copilot inherits user permissions in SharePoint and OneDrive. If permissions are not correct before rollout, Copilot could expose sensitive data—compensation, strategic plans, HR records—to any user who queries it. Data governance and permission review are non-negotiable prerequisites before activation.
Implications for Microsoft 365 license management in 2026
The increasing complexity of the M365 stack — E7, Copilot as an add-on, Agent 365, hybrid seat+consumption model — makes active license management more critical than ever. The most common financial risks in 2026 are:
- Inactive E5/Copilot seats: Terminated employees with active E5 + Copilot licenses represent a budget leak of up to $87/user/month. The M365 admin center shows aggregated activity data but does not identify which specific licenses are linked to inactive accounts.
- Copilot not activated: Organizations that purchased Copilot but failed to properly roll it out are paying $30/user/month with no return. Activation audits typically reveal 20–35% of dormant seats.
- Adjustment for July 2026: Microsoft is adjusting prices in July 2026, with Copilot Chat being incorporated into base plans and a price increase for the E5 + Copilot. Companies renewing their EA subscriptions should evaluate the stack before this date.
- Unbudgeted consumption model: Copilot Cowork and SharePoint agents have variable costs via Copilot Credits in addition to the seat fee. Without monitoring, these costs remain invisible until the invoice appears.
Key services included in Microsoft 365
In addition to office applications, Microsoft 365 includes services that often go unnoticed and can generate redundant costs when not managed:
- Microsoft Teams: unified communication platform with chat, video, files and integrations
- SharePoint Online: Content management and corporate intranet
- OneDrive for Business: cloud storage per user
- Exchange Online: Corporate email and calendar
- Power BI Pro: Included in E5 and E7 plans; requires an additional license for other plans.
- Microsoft Planner: Task management integrated with Teams.
- Copilot Chat: Basic AI is included in eligible plans at no additional cost.
Microsoft 365 license management: the most common mistakes
- Over-provisioned licenses: users with E3 or E5 plans who only use Business Basic features
- Inactive seats: Employees who have been on leave for months or years but have been on active leave.
- Spreadsheet-based management: Without centralized visibility, data becomes outdated and the process is not scalable.
- Duplication of tools: Teams and Slack, OneDrive and Dropbox active simultaneously
- Assuming that E5 includes Copilot: Copilot is a separate add-on, except on the E7, and is not included.
- Ignoring rule changes: Microsoft changes its terms and prices periodically — companies that don't keep up end up paying for outdated models or missing out on negotiation opportunities.
How to efficiently manage Microsoft 365 licenses.
The Software Asset Management (SAM) It is fundamental for controlling costs and compliance in Microsoft 365. The essential practices are:
- Automate license inventory with direct integration to Microsoft 365 via API.
- Monitor actual usage data per user to identify candidates for downgrading, removing, or recovering Copilot seats.
- Establish offboarding processes that include automatic license recovery — especially critical for E5 and Copilot seats.
- Review your stack before EA renewals, especially in 2026 with the July price adjustment.
- Evaluate E7 vs. E5+Copilot based on actual Agent 365 and Entra Suite usage — not just list price.
- Centralizing management on a platform like ServiceNow SAM Pro, which integrates M365 usage data with the overall inventory of ITAM
4MATT, a ServiceNow Elite Partner in Brazil with the 2024–2025 Technology Excellence Partner Award and over 80 certified specialists, developed an M365 License Management Dashboard integrated with ServiceNow SAM Pro for an enterprise client—replacing spreadsheets with real-time visibility, centralized control, and automated license recovery processes. The same approach applies to monitoring Copilot seats and controlling consumption via Copilot Credits.