About 12; min
Microsoft 365 bundles Word, Excel, Outlook, Teams, and OneDrive into one subscription. It’s the default for companies that need desktop Office apps. But the plan names are confusing, the Copilot AI add-on costs more than some plans, and there are price increases coming in 2026. We sorted it all out.
Prices verified March 2026 via microsoft.com.
Microsoft 365 Business Plans (2026)
| Plan | Annual billing | Includes | Best for |
|---|---|---|---|
| Business Basic | $6/user/mo | Web apps + Teams + 1TB | Web-only teams |
| Business Standard | $12.50/user/mo | Desktop apps + web + Teams | Most businesses |
| Business Premium | $22/user/mo | Standard + advanced security | Security-focused |
| Apps for Business | $8.25/user/mo | Desktop apps only, no Teams | Need Office without email |
| Add-on | Price |
|---|---|
| Microsoft Copilot | $30/user/mo (on top of any plan) |
| Teams Phone Standard | $10/user/mo |
| Teams Phone with Calling | $17/user/mo |
Business Basic ($6/user/mo): Teams + Web Apps + Storage
Basic is not the full Microsoft experience. There are no desktop apps. You get:
- Web versions of Word, Excel, PowerPoint (browser only)
- Microsoft Teams — chat, video, meetings up to 300 people
- 1TB OneDrive storage per user
- Exchange email with custom domain
- SharePoint and Lists
No desktop Word. No desktop Excel. If your team can live in a browser, Basic works. If anyone needs offline access or advanced Excel features (macros, pivot tables, Power Query), you need Standard.
$720 /year
$6 × 10 × 12 = $720/year. Cheapest way to get Teams + business email + 1TB storage.
Business Standard ($12.50/user/mo): What Most Companies Need
Standard is the plan Microsoft wants you on. Everything in Basic plus:
- Desktop apps — Word, Excel, PowerPoint, Outlook (install on up to 5 devices)
- Webinar hosting with registration and reporting
- Microsoft Loop — collaborative workspace
- Clipchamp — video editor
- Microsoft Bookings — appointment scheduling
$3,750 /year
$12.50 × 25 × 12 = $3,750/year
vs Basic: $1,800/year — $1,950 more for desktop apps.
That’s $6.50/user/month for full Office suite. Worth it.
If you’ve ever emailed a colleague asking to “export that as PDF because I can’t open the formatting” — you need Standard, not Basic.
Business Premium ($22/user/mo): Enterprise Security Lite
Premium adds security features aimed at companies handling sensitive data:
- Intune — mobile device management
- Azure Information Protection — classify and protect documents
- Defender for Business — endpoint security
- Conditional Access — location/device based login policies
- Advanced threat protection for email
The $9.50/user jump from Standard is for IT departments that need device management and compliance. If your team doesn’t handle regulated data, Standard is enough.
The Copilot Problem: $30/User Extra
Microsoft Copilot AI costs $30/user/month on top of your plan. That’s not a typo.
| Scenario (10 users) | Annual cost |
|---|---|
| M365 Standard only | $1,500/yr |
| M365 Standard + Copilot | $5,100/yr |
| Google Workspace Standard (Gemini included) | $1,680/yr |
Adding Copilot to a 10-person team costs more than Standard itself ($3,600 for Copilot vs $1,500 for the base plan). Google Workspace Standard with Gemini AI included costs $1,680 — less than M365 Standard + Copilot combined.
Copilot is powerful. It writes in Word, analyzes in Excel, summarizes in Teams. But $30/user/month makes it a premium tool for power users, not a company-wide deployment.
Microsoft 365 vs Google Workspace
| M365 Business Standard | Google Workspace Standard | |
|---|---|---|
| Price | $12.50/user/mo | $14/user/mo |
| Desktop apps | Yes (Word, Excel, PPT) | No (web only) |
| Storage | 1TB/user | 2TB/user |
| Video meetings | Teams (300 ppl) | Meet (150 ppl) |
| AI | Copilot: +$30/user | Gemini: included |
| Outlook | Gmail | |
| Collaboration | SharePoint + Teams | Drive + Docs |
Microsoft is $1.50 cheaper and includes desktop apps. Google has 2x storage and includes AI free. The deciding factor is usually what your team already uses — switching ecosystems is painful.
Price Increase Alert (July 2026)
Microsoft announced pricing changes effective July 1, 2026. If you’re planning to subscribe, locking in annual billing before July could save money. The exact increases haven’t been fully disclosed for all plans.
Who Should Pick What
Small team, browser-first: Basic ($6/user). If you never open desktop Office, don’t pay for it.
Most businesses: Standard ($12.50/user). Desktop apps + Teams + email. The default for a reason.
Need Office apps but not email: Apps for Business ($8.25/user). Rare use case but it exists.
Regulated data: Premium ($22/user). Intune + Defender + Conditional Access.
AI power users: Add Copilot selectively — not for everyone, only for users who’ll use it daily. $30/user is too expensive for occasional use.
Frequently Asked Questions
Is Microsoft 365 the same as Office 365?
Microsoft rebranded Office 365 to Microsoft 365 in 2020. Same products, new name. If you see “Office 365” references, they’re outdated.
Do I need Microsoft 365 if I already have Teams?
Teams is included with all M365 business plans. You can also get Teams standalone (Teams Essentials at $4/user), but you miss out on email, storage, and Office apps.
Is Copilot worth $30/month?
For executives, analysts, and heavy document writers: potentially yes. For most employees: no. Start by giving Copilot to 2-3 power users, measure the impact, then decide whether to expand.
Can I mix plans in one organization?
Yes. You can assign different users different plans. Give Standard to most, Premium to IT/security staff, and Copilot only to select users.
What happens if I cancel?
You lose access to desktop apps and email. Data in OneDrive is retained for 90 days, then deleted. Export everything before canceling.
Pricing from microsoft.com, March 2026. Price increases effective July 1, 2026. Verify current rates before purchasing.
