Microsoft 365: Smarter Tools, Bigger Costs Ahead

Enhancing Workplace Support in an AI-Driven World

Microsoft is set to roll out significant updates to its Microsoft 365 suite, aiming to better support workplaces in an AI-driven world. These changes come with a catch: higher prices starting in 2026.

Key Upgrades

• Smarter Apps: Word, Excel, PowerPoint, Outlook, and OneNote will get AI-powered features.
• Stronger AI Management: IT teams will receive enhanced tools to manage AI use, ensuring safer and more confident adoption.
• Improved Security: Expanded protections and new features to help tech teams diagnose device issues, prevent problems, and manage apps more efficiently.
• Access Control: Higher-end plans, like Microsoft 365 E5, will include tools to control access to sensitive information and keep AI use within safe limits.

Price Changes

Microsoft is raising prices for its commercial and government subscriptions, attributing the increases to significant investments, including over 1,100 new features released across Microsoft 365, Security, Copilot, and SharePoint in the past year.

Recent Challenges and Clarifications

• Sales Growth Targets: Microsoft addressed reports claiming it lowered sales growth targets for certain AI products, clarifying that these reports misrepresented how its sales quotas work.
• Bug Investigations: Microsoft is investigating a bug that has prevented customers from downloading Microsoft 365 desktop apps since November 2. The issue was traced to a service update that disrupted license checks, and a fix is being tested before rollout.
• Stock Performance: Despite these challenges, Microsoft continues to perform well, gaining over 14% year-to-date, although it lags behind the NASDAQ Composite Index’s 22% returns.