--- title: "Microsoft's cheapest seats rose the most: F1 +33%, E3 +8%, bundled VMware ends 31 October" summary: "Microsoft's 1 July 2026 list, the 1 October 5% uplift on monthly-billed CSP software, and the 31 October Azure VMware deadline, priced for a 500-seat Indian company." url: https://www.thetechbag.com/blog/microsoft-365-price-rise-india-renewal-2026 format: Analysis desk: "Buying software in India" published: 2026-10-27 facts_checked: 2026-10-27 author: TechBag (The TechBag Journal) tags: ["Microsoft 365","licensing","price increase","CSP","E3","F1","Azure VMware Solution","Broadcom","VCF","renewal","GST"] cover: https://www.thetechbag.com/blog/covers/microsoft-365-price-rise-india-renewal-2026.png --- # Microsoft's cheapest seats rose the most: F1 +33%, E3 +8%, bundled VMware ends 31 October *Microsoft's 1 July 2026 list, the 1 October 5% uplift on monthly-billed CSP software, and the 31 October Azure VMware deadline, priced for a 500-seat Indian company.* Analysis · Buying software in India · By TechBag · Published 2026-10-27 · Facts checked 2026-10-27 · Canonical: https://www.thetechbag.com/blog/microsoft-365-price-rise-india-renewal-2026 The short version - From 1 July 2026 Microsoft 365 list prices rose at renewal, and the cheapest seats rose the most: F1 went up 33%, F3 25%, Business Basic 16%, E3 8% and E5 5%. A 500-seat Indian company on a mix of E3, Business Standard and F3 pays about 11% more.[1] - From 1 October 2026 paying monthly on an annual-term CSP software subscription (SQL Server, Windows Server, CALs, System Center) costs 5% more at renewal. Annual-upfront and month-to-month terms are unchanged. The same day, the 15% E7 promotions retired.[2] - 31 October 2026 is the last day a pay-as-you-go Azure VMware Solution deployment may run on Microsoft-bundled VCF. After that the licence must be bought from Broadcom and registered in the Azure portal; reservations get until 30 August 2027.[3] Most Indian companies renew Microsoft in the October to December quarter, which is why three separate changes are landing on one purchase order this year. The question a finance or IT head is actually asking is not “did Microsoft raise prices?” but “by how much, for which seats, on which billing term, and what else moved while I was not looking?” We went through Microsoft’s own price list, its Partner Center notices and its Azure VMware Solution licensing reference, and priced the result for a 500-seat company. Three levers are pulling at once: the list price plus what is bundled into it, financing sold as a price, and a channel that has been removed. ## The cheapest seats rose the most Microsoft announced the July 2026 change on 4 December 2025 and published the full table on its licensing site. Every enterprise suite went up by a round US$3 a seat: E3 from US$36 to US$39, E5 from US$57 to US$60, Office 365 E3 from US$23 to US$26. Because the base prices differ, the same US$3 is an 8% rise on E3, 5% on E5 and 13% on Office 365 E3.[1] The frontline and small-business SKUs did not get a flat US$3; they got a larger share. F1 went from US$2.25 to US$3.00, a 33% rise, and the no-Teams variant from US$1.75 to US$2.50, a 43% rise. F3 rose 25%, Business Basic 16%, Business Standard 12%, Apps for business 21%. Of the 26 commercial SKUs with a stated percentage, only two moved by less than 8%: Microsoft 365 E5 and its no-Teams twin.[1] **Figure: The lower the seat price, the larger the rise: F1 up 33%, E3 up 8%, E5 up 5%** *Percentage change in Microsoft 365 commercial list price per user per month, effective 1 July 2026 at renewal* Microsoft 365 F1 (no Teams) $1.75 → $2.50 43% Microsoft 365 F1 $2.25 → $3.00 33% Windows Enterprise per device $5.85 → $7.63 31% Microsoft 365 F3 $8.00 → $10.00 25% Apps for business $8.25 → $10.00 21% Business Basic $6.00 → $7.00 16% Entra ID P1 $6.00 → $7.00 16% Office 365 E3 $23 → $26 13% EMS E3 $10.60 → $12.00 13% Business Standard $12.50 → $14.00 12% Microsoft 365 E3 $36 → $39 8% Microsoft 365 E5 $57 → $60 5% | | Value (%) | | --- | --- | | Microsoft 365 F1 (no Teams) | 43 | | Microsoft 365 F1 | 33 | | Windows Enterprise per device | 31 | | Microsoft 365 F3 | 25 | | Apps for business | 21 | | Business Basic | 16 | | Entra ID P1 | 16 | | Office 365 E3 | 13 | | EMS E3 | 13 | | Business Standard | 12 | | Microsoft 365 E3 | 8 | | Microsoft 365 E5 | 5 | Source: Microsoft, 2026 Microsoft 365 packaging and pricing updates (USD list); 12 of 26 priced SKUs shown · as of 16 February 2026 · the 14 SKUs not shown moved between 6% and 29%; prices may vary by country and currency Microsoft’s justification is bundling. E3 now carries Defender for Office Plan 1, Intune Plan 2, Intune Remote Help and Intune Advanced Analytics; E5 adds Security Copilot, Endpoint Privilege Management and Cloud PKI on top. The features are real and they are rolling out through the summer of 2026.[1] The buyer’s problem is that they are not optional. A company that already pays a third-party email filter and a third-party device-management tool is, from July, paying for both twice. TechBag’s [UEM and MDM guide](https://www.thetechbag.com/browse/endpoint-management/uem-mdm) puts third-party device management at roughly US$2 to US$8 per device a month on published list prices, which is the size of the overlap a Microsoft-committed shop should now go and find.[7] ## A 500-seat company pays 11% more, and frontline seats drive a third of it Here is the arithmetic for a company we would call typical of TechBag’s enquiries: 500 people, a head office of knowledge workers, two or three branches, and a field or shop-floor workforce. We have assumed 200 seats of Microsoft 365 E3 for the people who need Intune and Defender, 100 seats of Business Standard for branch and back-office staff who need desktop Office and little else, and 200 seats of F3 for frontline workers. Business plans are capped at 300 seats a tenant, so the mix is permitted. All prices are Microsoft’s USD list on an annual commitment, per user per month.[1] **Figure: Every seat type moved, but a frontline seat moved by a quarter and an enterprise seat by a twelfth** *Microsoft 365 commercial list price, US$ per user per month on annual commitment, before and after 1 July 2026* | | Before 1 Jul 2026 | From 1 Jul 2026 | Change | | --- | --- | --- | --- | | Microsoft 365 E5 | 57 | 60 | 5% | | Microsoft 365 E3 | 36 | 39 | 8% | | Business Standard | 12.5 | 14 | 12% | | Microsoft 365 F3 | 8 | 10 | 25% | | Business Basic | 6 | 7 | 17% | | Microsoft 365 F1 | 2.25 | 3 | 33% | Source: Microsoft, 2026 Microsoft 365 packaging and pricing updates (USD list) · as of 16 February 2026 · Microsoft India's INR list was not readable when we checked; INR prices differ and carry 18% GST 11.4% The rise in the 500-seat company's annual Microsoft 365 bill: US$120,600 to US$134,400 TechBag arithmetic on Microsoft's USD list; the workings are below. TechBag countThe 500-seat worked example, in USD list Before July: 200 E3 at US$36, 100 Business Standard at US$12.50 and 200 F3 at US$8 come to US$10,050 a month, or US$120,600 a year. After: US$7,800 plus US$1,400 plus US$2,000 is US$11,200 a month, or US$134,400 a year. The rise is US$13,800 a year, 11.4% on the whole bill. The 200 F3 seats were 16% of the old bill and account for 35% of the increase; the 200 E3 seats account for 52%; the 100 Business Standard seats for 13%. TechBag arithmetic on Microsoft’s published USD list; the INR invoice will differ and adds 18% GST.[1] Two things follow. First, the blended rise on a real estate is higher than the 8% headline because few Indian companies are all-E3; the frontline and small-business seats that make up the long tail rose two to four times as fast. Second, the increase is largest exactly where the per-seat value of the bundled additions is smallest: an F3 user gets no Intune Plan 2 and no Defender for Office Plan 1 for the extra US$2, because those were added to E3 and E5, not to F3.[1] ## 1 October: paying monthly became a 5% price, and the E7 discount went away The second lever is quieter. On 12 August 2026 Microsoft told its Cloud Solution Provider partners that “starting October 1, 2026, Microsoft applies a 5% cost of capital uplift for Cloud Solution Provider (CSP) software subscriptions (such as SQL Server, Windows Server, Client Access Licenses, and System Center) with annual-term commitments billed monthly.” There is “no change to annual billing or month-to-month subscriptions”, and for existing subscriptions the uplift “takes effect at renewal on or after October 1, 2026.”[2] 5% Uplift on an annual-term CSP software subscription billed monthly, at renewal Partner Center, 12 Aug 2026 0% Change for annual-upfront or month-to-month terms Partner Center, 12 Aug 2026 15% E7 one- and three-year promotions retired on 1 Oct 2026 Partner Center, 3 Aug 2026 20% E3 one-year targeted promotion still open to 31 Dec 2026 Partner Center, 3 Aug 2026 Read it as a finance person would. You commit to a year, you pay in twelve instalments, and Microsoft charges 5% for carrying the receivable. That is a financing charge presented as a licence price, and it is invisible unless your reseller quotes both billing terms side by side. Note the scope precisely: the notice names software subscriptions, not Microsoft 365 or Dynamics online services, and Microsoft’s FAQ on which subscriptions are in scope sits behind a partner login, so we could not read it.[2] If your SQL Server or Windows Server CALs are on a monthly-billed annual term through a partner, ask for the annual-upfront quote before you renew; on a ₹10,00,000 annual software subscription the difference is ₹50,000 before GST, which is arithmetic, not a price claim. ReportedPromotions, 3 August 2026 Microsoft 365 E7 promotional offers, 10% off one-year and 15% off one- and three-year terms, remained available “through September 30, 2026”, with “no new promotional transactions” from 1 October. Two E3 promotions continue to 31 December 2026: 10% off a three-year term for new-to-offer customers and a targeted 20% off one year. From 1 October Microsoft also pays partners “growth margins” for sustained deployment rather than for the transaction.[2] The growth-margin point matters to a buyer because it changes what your reseller is paid for. Until September a partner earned on the sale and on the promotion; from October it earns on your usage growing. Expect more adoption workshops and fewer discounts, and treat the E3 offers that survive to December as the last transactional discount of this cycle. ## 31 October: the VMware licence leaves the Azure bill and lands on a Broadcom one The third lever is a channel being removed. Broadcom no longer lets hyperscalers resell VMware Cloud Foundation inside their own services. Microsoft’s licensing reference, updated 27 October 2026, states that “as of November 1, 2025, Microsoft no longer includes a VCF license or subscription with new Azure VMware Solution node purchases”, that on 31 October 2026 “license-included pay-as-you-go deployments must transition to portable VCF to remain compliant”, and that by 30 August 2027 holders of license-included reservations “must exchange their reservations for VCF BYOL reservations or transition those workloads off Azure VMware Solution.”[3] Google required portable VCF on its VMware Engine from 1 November 2025.[5] **Figure: Five dates in 22 months: the list rises, monthly billing gets a price, and the VMware licence moves to Broadcom's invoice** *Microsoft and Broadcom licensing milestones affecting an Indian Microsoft estate, November 2025 to August 2027* | Date | Event | Detail | | --- | --- | --- | | 1 Nov 2025 | VCF no longer bundled with new AVS nodes | Every new Azure VMware Solution deployment must bring a Broadcom subscription; Google VMware Engine does the same on 1 Nov. | | 1 Jul 2026 | Microsoft 365 list rises at renewal | E3 up 8%, E5 5%, F3 25%, F1 33%, Business Basic 16%; Defender for Office P1 and Intune P2 move into E3. | | 1 Oct 2026 | Monthly billing costs 5%; E7 promos end | A 5% uplift on annual-term CSP software subscriptions billed monthly; E7 10% and 15% promotions retire; partner growth margins begin. | | 31 Oct 2026 | Pay-as-you-go AVS must bring its own VCF | License-included pay-as-you-go deployments must move to portable VCF to remain compliant. | | 30 Aug 2027 | AVS reservations exchanged or moved off | License-included reservations must be exchanged for VCF BYOL reservations, or the workloads moved off. | Source: Microsoft Learn, portable VCF licensing reference; Microsoft Partner Center, August 2026; Microsoft licensing news; CloudTech News for the Google date · as of 27 October 2026 What this does to a bill is the point. The Azure line falls, because Microsoft stops charging for the VCF it no longer supplies, and a new Broadcom line appears, sized by physical cores. Microsoft counts 36 cores for each AV36 or AV36P host, 48 for AV48, 52 for AV52 and 64 for AV64, so a four-node AV36P private cloud needs 144 registered cores, and “the total number of registered cores must not exceed the number purchased from Broadcom”; exceed it and the private cloud “becomes noncompliant and is at risk of suspension”.[3] Registration is through the Azure portal, per private cloud, and a converted private cloud switches to portable-VCF pricing without downtime.[4] Broadcom has published no VMware list-price change for 2025 or 2026 and still sells per core with a 16-core minimum per CPU, so the price of those 144 cores is whatever Broadcom or its distributor quotes you.[6] We have left the per-core dollar figures circulating among partners out of this piece because Broadcom does not publish them. Our view Our view: an Indian company with a small AVS footprint should not sign a Broadcom subscription this week merely to make a deadline. It should price three exits against it: stay and bring the licence, which is right for a large committed VMware estate; move the workloads to native Azure or to a VMware-free stack, for which TechBag’s [Nutanix hub](https://www.thetechbag.com/nutanix) covers the migration tooling; or, if a reservation is running, use the time to 30 August 2027 that Microsoft has written down. The deadline is real, but it is a deadline for a licence, not for a decision. ## Microsoft is not alone, but it is the only one that raised the bottom of its list by a third Set the Microsoft figures beside the other renewals an Indian IT department has signed since January 2025. Google Workspace Business Starter went from US$6 to US$7 and Business Plus from US$18 to US$22 in January 2025, with Gemini bundled. Salesforce Sales Cloud Enterprise rose from US$165 to US$175 on 1 August 2025. Atlassian Cloud Standard went up 5% and Premium 7.5% on 15 October 2025, and Atlassian Data Center about 15% at renewal from 17 February 2026: a 500-user Jira Data Center licence moved from US$51,000 to US$59,000 a year.[6] **Figure: Across 2025–26 renewals, Microsoft's F1 rise is the largest and its E3 rise is in the middle of the pack** *Published percentage increase at renewal, by vendor and SKU, January 2025 to October 2026* Microsoft 365 F1 (Jul 2026) 33% Google Workspace Business Plus (Jan 2025) 22% Google Workspace Business Starter (Jan 2025) 17% Atlassian Data Center (Feb 2026) 15% Microsoft 365 E3 (Jul 2026) 8% Atlassian Cloud Premium (Oct 2025) 7.5% Salesforce Sales Cloud Enterprise (Aug 2025) 6% Atlassian Cloud Standard (Oct 2025) 5% Microsoft CSP software, billed monthly (Oct 2026) 5% | | Value (%) | | --- | --- | | Microsoft 365 F1 (Jul 2026) | 33 | | Google Workspace Business Plus (Jan 2025) | 22 | | Google Workspace Business Starter (Jan 2025) | 17 | | Atlassian Data Center (Feb 2026) | 15 | | Microsoft 365 E3 (Jul 2026) | 8 | | Atlassian Cloud Premium (Oct 2025) | 7.5 | | Salesforce Sales Cloud Enterprise (Aug 2025) | 6 | | Atlassian Cloud Standard (Oct 2025) | 5 | | Microsoft CSP software, billed monthly (Oct 2026) | 5 | Source: Licenseware software price-increase tracker citing vendor notices; Microsoft licensing news; Microsoft Partner Center · as of 24 October 2026 · list-price changes only; negotiated and promotional prices excluded; no Zoho change is published The pattern across all four vendors is the same: raise the list, attach an AI or security feature to justify it, and leave negotiated prices to the account team. What is specific to Microsoft is the shape. Google and Salesforce raised their cheapest tiers by 17% and 6%; Microsoft raised its cheapest tier by 33% and its no-Teams frontline tier by 43%.[1] For a buyer that means the negotiation has moved. The E3 price is what it is, and the surviving promotions run to December. The place to push is the frontline count, the billing term, and the third-party tools that E3 now duplicates. Our viewWhat to take into the renewal meeting Ask for three quotes, not one: the renewal as it stands; the renewal with every E3 user’s third-party MDM and email filter removed, priced through TechBag’s [Intune page](https://www.thetechbag.com/microsoft/microsoft-intune) against the specialists; and the renewal with frontline seats re-counted against the people who actually sign in. Then ask for annual-upfront and monthly-billed figures for any software subscription on the order. The combination is usually worth more than the discount you will be offered. If you are buying this in India Microsoft prices India in rupees on its own list, and its US page says prices “may vary by country and currency”.[1] We tried to read the INR list for E3, E5, F3 and the Business plans on microsoft.com/en-in and could not: the pages return only Microsoft’s script shell to anything that is not a browser. So this piece is in USD list, and the rupee figure on your quote is the one that counts. Whatever it reads, the GST line adds 18%: licensing of information-technology software falls under heading 9973, Entry 17(ii) of Notification 11/2017-Central Tax (Rate), at 18% since the 1 October 2021 amendment, so a ₹1,00,00,000 annual Microsoft invoice carries ₹18,00,000 of GST and an ITC claim of the same size.[8] Two procurement facts shape the quarter. Through CSP the 5% uplift is applied by Microsoft, not the partner, so a reseller cannot waive it; it can only requote the term. And a VMware exit from Azure now has a fourth Indian landing place: Microsoft’s India South Central region in Hyderabad reached general availability on 6 August 2026, joining Pune, Chennai and Mumbai, which matters to a regulated firm whose[RBI and SEBI duties](https://www.thetechbag.com/industries/bfsi/obligations) constrain where infrastructure sits.[9] TechBag resells Microsoft 365 and Intune through CSP, and the device-management products named above, and quotes all of them in INR with GST shown. How we did this Figures as of 27 October 2026 The SKU prices and percentages are Microsoft’s own, from its licensing-news page dated 16 February 2026 (announcement 4 December 2025, effective 1 July 2026); the two bar charts and the before-and-after chart use that table unaltered, and the 500-seat example is TechBag’s arithmetic on it. The 5% uplift, E7 retirement and E3 promotions are quoted from the Partner Center August 2026 announcements page; the cost-of-capital FAQ it links to requires a partner login and was not read. The Azure VMware Solution dates, core counts and compliance wording are from Microsoft Learn’s portable-VCF licensing reference (updated 27 October 2026) and configuration guide; only the Google VMware Engine date rests on CloudTech News. The Google, Salesforce and Atlassian figures are from Licenseware’s tracker (prices checked 24 October 2026), not from those vendors’ pages. Microsoft India’s INR prices were attempted by two methods and not read; no INR price appears here and no exchange rate was applied. Partner-reported VMware per-core prices were excluded as unpublished. No Zoho price change was found and none is claimed. Spotted an error? Write to us; corrections are published at the foot of the piece. Sources 1. [Microsoft, 2026 Microsoft 365 packaging and pricing updates (commercial USD list, effective 1 July 2026)](https://www.microsoft.com/en-us/licensing/news/2026-M365-Packaging-Pricing-Updates) — 16 February 2026 Announced 4 December 2025. 2. [Microsoft Partner Center, August 2026 announcements: CSP software pricing update effective October 1, 2026 (12 Aug) and Microsoft 365 promotion updates (3 Aug)](https://learn.microsoft.com/en-us/partner-center/announcements/2026-august) — page updated 31 August 2026 The linked cost-of-capital FAQ is behind a partner login. 3. [Microsoft Learn, Portable VMware Cloud Foundation licensing reference for Azure VMware Solution](https://learn.microsoft.com/en-us/azure/azure-vmware/portable-vcf-licensing-reference) — 27 October 2026 4. [Microsoft Learn, Configure portable VMware Cloud Foundation for Azure VMware Solution](https://learn.microsoft.com/en-us/azure/azure-vmware/vmware-cloud-foundations-license-portability) — 14 August 2026 5. [CloudTech News, Azure VMware Solution licensing changes set October deadline](https://www.cloudcomputing-news.net/news/azure-vmware-solution-licensing-changes/) — 21 August 2026 Used for the Google Cloud VMware Engine date only. 6. [Licenseware, Software price increases 2025–2026 tracker (Google Workspace, Salesforce, Atlassian, Microsoft, Broadcom)](https://licenseware.io/software-price-increases-2025-2026/) — updated 23 October 2026; prices checked 24 October 2026 Secondary; cites vendor notices. 7. [TechBag, UEM and MDM decision guide, price table (Omnissa, Scalefusion, Hexnode, Intune and others)](https://www.thetechbag.com/browse/endpoint-management/uem-mdm) — vendor documents, August 2026 8. [Taxguru, CBIC notifies CGST rate on various services w.e.f. 01.10.2021 (Notification 06/2021-Central Tax (Rate), amending Entry 17 of Notification 11/2017)](https://taxguru.in/?p=789149) — 30 September 2021 Secondary summary; the CBIC PDF was not fetched. 9. [Microsoft Source Asia, Microsoft's newest India datacenter region goes live (India South Central, Hyderabad)](https://news.microsoft.com/source/asia/features/microsofts-newest-india-datacenter-region-goes-live-to-power-the-countrys-ai-economy-and-enable-frontier-firms/) — 6 August 2026 Related on TechBag: the [Microsoft 365 page](https://www.thetechbag.com/microsoft/microsoft-365) compares the Business and Enterprise plans; the [Omnissa hub](https://www.thetechbag.com/omnissa) covers the former VMware end-user products now sold separately; the [JumpCloud SaaS management page](https://www.thetechbag.com/jumpcloud/jumpcloud-saas-management) is where the duplicate-licence hunt usually starts. **Disclosure.** TechBag is a software reseller: it earns a margin when a reader buys through it, including from vendors named here. The analysis is TechBag’s own; no vendor paid for or saw this piece before publication. Facts are labelled reported, TechBag count or our view. Go deeper on TechBag - [Microsoft 365: Business and Enterprise plans compared](https://www.thetechbag.com/microsoft/microsoft-365) — the plans the worked example is built on - [UEM and MDM decision guide](https://www.thetechbag.com/browse/endpoint-management/uem-mdm) — the third-party device management E3 now duplicates, with list prices - [Nutanix hub](https://www.thetechbag.com/nutanix) — the VMware exit path, including ESXi-to-AHV migration tooling