Microsoft price changes: what to lock in before December 31

Copilot usage billing turns on by default, E3 and Copilot promotions expire, and Power Apps and Azure prices rise. What to decide this quarter.

Microsoft has stacked its next round of price and licensing changes into a 90-day window. Copilot Business starts billing for usage by default on December 1, the biggest discounts on Microsoft 365 E3 and Copilot expire December 31, and Power Apps and Azure prices rise in January and February. If you want today's prices, the decisions have to be made this quarter, before most finance teams have closed the 2027 budget.

Each change is small. Together they hit the same contracts in the same two months, so we'd treat them as one project with one owner.

What changes, and when?

Here is the calendar. Where a figure comes from a partner or licensing advisor rather than Microsoft, we say so.

• Already in effect: a 5% CSP price increase on annual-term, monthly-billed subscriptions for SQL Server, Windows Server, Client Access Licenses and System Center, per Pax8. Annual terms billed upfront are not affected.
• Nov 10, 2026: Windows 11 Enterprise and Education version 23H2 reach end of servicing and stop getting security updates.
• Dec 1, 2026: new Microsoft 365 Copilot Business licenses bought through CSP get usage-based billing turned on by default, with a preset limit of 4,000 Copilot Credits per user per month. Copilot can also be bought without a qualifying Microsoft 365 base license from this date.
• Dec 31, 2026: Microsoft 365 E3 and Copilot Business promotions expire.
• Jan 1, 2027: Power Apps Premium rises from $20 to $22 per user per month, and from $12 to $14 on the 2,000-seat plan. MetrixData 360 reports that Microsoft's annual local-currency price update lands the same day.
• Feb 1, 2027: Azure prices rise for selected VM series and storage in seven regions, between 8% and 17%. MetrixData 360 also reports that Power Apps will start blocking users who lack a license they always needed.

Why does the Copilot default matter?

Because it turns a fixed seat price into a variable bill, and the meter starts at a number nobody chose.

Licensing advisors MetrixData 360 and Origami both put Copilot Credits at 1 cent each, which makes the default cap worth up to $40 per user per month on top of the license. Microsoft charges only for credits used, so a quiet user costs nothing extra. A busy one running agents can hit the cap every month.

Two details matter for North American companies. MetrixData 360 reports that the default applies in Canada and the United States, while 11 countries (including France, Germany and Australia) are excluded at launch. And it applies to new CSP licenses, so a company buying Copilot seats in December, often to catch the year-end promotion, gets both the discount and the open meter in the same order.

Admins set the limits in the Microsoft 365 admin center under Copilot, then Cost Management. Microsoft's documentation describes per-user monthly budgets, a total limit for each policy, and alerts. When a user hits the limit, access stops until credits reset on the first of the month. There's also an "Auto-apply new services" toggle that adds new agents to a policy automatically. Turn it off until someone has decided those agents are worth paying for.

We've written before that AI spend needs a budget owner. This is that problem with a date on it.

Should you take the year-end promotions?

Take them if you were going to buy anyway. Don't buy seats to catch a discount.

Per Pax8 and MetrixData 360, the offers ending December 31 are:

• Microsoft 365 E3, three-year term: 10% off for first-time purchases of 100 or more seats.
• Microsoft 365 E3, one-year term: 20% off for targeted customers at 250 or more seats.
• Copilot Business: 15% off a one-year term, up to 300 seats.
• Business Basic plus Copilot Business: 25% off a one-year term, up to 300 seats.

The catch is in the renewal. MetrixData 360 notes that promotional pricing applies only to the term purchased. A one-year 20% discount is a one-year price, and next year's renewal comes in at list unless you negotiated something else. Before you sign, write down what the seat costs in year two and put it in the 2027 and 2028 budgets now. If the three-year E3 offer fits your seat count, it gives you longer price certainty than any one-year deal.

What does the Azure increase mean outside Europe?

The seven regions are North Europe (Dublin) at 17%, France Central and France South at 11%, West Europe (Amsterdam), Norway East and Norway West at 9%, and Southeast Asia (Singapore) at 8%. No US or Canadian region is on the list. Techzine reports that Microsoft notified customers through Azure Service Health in early October, and that the common D-series and E-series v4, v5 and v6 virtual machines are in scope while v7 is exempt.

If you run everything in North American regions, the direct hit is small. But companies with European customers, a disaster recovery site in Dublin or a team in Singapore usually have more workloads there than finance realizes. Pull a cost report by region before you assume you're clear.

The other number to watch is the older hardware. Both Techzine and MetrixData 360 cite partner reports that selected v1 and v2 VM series will rise about 25% worldwide on the same date. Microsoft hasn't confirmed it. Treat it as the push to move them.

Reservations vs. savings plans. Reservations bought before February 1 keep today's rate for their term, per MetrixData 360 and Techzine. Savings plans do not lock the rate: your hourly commitment stays the same and buys less compute. If you have steady workloads in the affected regions, a reservation bought in January is worth more than the same one bought in March. Size it to what you run today, not what you plan to run. Our cloud cost work starts with exactly this split.

What should a CFO or CIO do this quarter?

Five things, in order:

• Audit Copilot seats and set caps. List who has Copilot, who uses it, and which seats are new CSP licenses after December 1. Set a policy limit per group well below 4,000 credits for anyone not running agents, and turn off auto-apply for new services.
• Decide reservations vs. savings plans before February 1. Get a regional cost report, find steady workloads in the seven regions, and buy reservations for those in January. Flag every v1 and v2 VM for migration.
• Price the promotions to year two. For any E3 or Copilot deal you take before December 31, write down the renewal price. If you can't get a renewal cap in writing, assume list.
• Build a renewal calendar. Power Apps renewals and co-terminations starting on or after January 1 pay the new price, and existing subscriptions keep their price only to the end of the current term, per Microsoft. Know which of yours renew in Q1.
• Budget 2027 for the increases. Add the Power Apps change, the Azure regions you use, the Copilot meter and the year-two price of any promotion. Canadian companies billed in local currency should also hold room for the January 1 local-currency update until Microsoft publishes it.

If the Microsoft renewal is one of your bigger software contracts, it belongs in the same review as the rest of the stack, not in a separate IT ticket.

Start with the Copilot policy, because it's the only change here that grows with use. If you have a Microsoft quote on the table before December 31, send it to us for a Second Opinion and we'll tell you within five business days what it will cost in year two and what to change before you sign. For the full calendar, our Renewal Desk keeps it.

Sources: Pax8, Pax8 and Microsoft Updates for November 2026, MetrixData 360, Microsoft Licensing Changes, November 2026, Microsoft, New pricing for Power Apps Premium, Techzine, Azure price hike: European workloads face up to 17 percent price increase, Microsoft Learn, Managing AI experiences enabled by usage-based billing, 2toLead, Microsoft 365 Copilot Licensing Changes: December 2026 Guide, Origami, Copilot Usage-Based Billing Turns On by Default, BleepingComputer, Windows 11 23H2 reaches end of support in 30 days