How SMBs Can Save on Microsoft Licensing in 2026 Without Sacrificing Security

Microsoft 365 licence costs are increasing this year, and if you renew without reviewing your options, you could find yourself paying more for the same outcomes. Fortunately, there’s a smart way to navigate these changes, and in many cases, cut your overall IT expenditure.

With the right mix of the various licensing options and bundles, SMBs can reduce their total cost while improving their security, compliance, and most importantly, their productivity. In this blog post, I’ll break down where the real savings are in 2026, and how to avoid paying enterprise-level prices when you don’t need to.

What are you currently paying for?

Microsoft 365 Business licensing falls into three tiers:

• Business Basic – web & mobile applications for Office only
• Business Standard – desktop applications for Office
• Business Premium – everything in Business Standard, plus advanced security & management capabilities

While many organisations default to Business Standard, it’s often Business Premium that delivers the best long-term value when used properly.

What’s in Microsoft 365 Business Premium Today?

Business Premium bundles several powerful tools alongside the Office applications:

• Microsoft Intune – device & application management
• Microsoft Defender – email & device security
• Microsoft Purview – data protection & compliance controls
• Entra ID Plan 1 – conditional access policies and identity security
• Azure Virtual Desktop usage rights

For many SMBs, Microsoft 365 Business Premium can, when used correctly, eliminate the need for multiple third-party tools, significantly reducing their overall IT spend.

What’s Changing In 2026?

From July, new licence subscriptions, or renewals of existing licences, may be more expensive. Microsoft has confirmed that the Enterprise licences (E3 and E5) will see a price increase, as will Microsoft 365 Business Standard. Business Premium pricing will stay put, making it a more attractive offer over Business Standard.

In a world where everything is going up, this isn’t just a price increase; there are some significant benefits to justify the increase.

First and foremost, mailboxes on a Microsoft 365 Business licence will receive an extra 50GB storage, potentially eliminating the need for some Exchange Online Plan 2 top-up licences.

Additionally, more features of Microsoft Defender will be rolled out across the Business Basic and Business Standard licences, including URL checks in emails, to better protect your organisation from a phishing attack.

And finally, in the Enterprise licences, additional functionality from Microsoft Defender as well as Intune will also be rolled out, potentially eliminating the need for the Intune extension licences.

What Does This Mean for SMBs?

The price gap between Business Standard and Business Premium is shrinking, and Business Premium now includes more value than ever before. Upgrading to Business Premium now delivers better security and management at a marginal additional cost, and moving to E3 or E5 is becoming harder to justify unless there’s a genuine enterprise requirement.

Licence Bundles – Even Greater Savings Available Now

Last year, Microsoft released a handful of licencing bundles to help SMBs dramatically reduce costs.

Microsoft Copilot now has a lower-cost Business tier available, complete with the full Enterprise feature set, at Business tier prices. There is currently a promotional price running until April 2026 for Copilot Business. Microsoft have also released Copilot Business bundles, bundling a Microsoft 365 Business and Copilot licence together, at a combined reduced cost compared to buying them separately.

Last summer, for organisations using Business Premium, Microsoft released mini suites for Defender and Purview.

The Defender suite bundles a handful of Microsoft Defender licences along with Entra ID P2 (for Privileged Identity Management), equating to a 65% saving compared to buying the licences individually.

The Purview suite bundles a handful of Microsoft Purview licences together, nearly halving the cost of buying the Purview licences individually.

When bundled together, they amount to a 68% total cost reduction enabling organisations to achieve E5-level security, without buying Microsoft 365 E5.

Frontline Licensing: The SMB Secret Weapon

Many SMBs unknowingly over-license users who don’t need full desktop apps or device management.

Frontline licensing makes sense for users who work on shared computers or mobile devices (with a screen size under 10.9"), or who don’t have a dedicated corporate device. These roles typically don’t need the full feature set of a Business or Enterprise licence, which is reflected in reduced mailbox and OneDrive storage limits.

With Microsoft 365 Business capped at 300 seats, Frontline licensing helps organisations scale efficiently without prematurely moving to costly enterprise licences.

Final Thoughts

In 2026, the biggest Microsoft licensing savings won’t come from discounts, they’ll come from streamlining your licences and external tools using Business Premium, purchasing bundles rather than individual licences, aligning Frontline licensing with real-world usage to avoid unnecessary jumps to E3/E5, and timing Microsoft Copilot adoption around promotional pricing.

If your licensing hasn’t been reviewed in the last 12 months, chances are you’re overpaying. Get in touch with us today for a free licencing and cloud security assessment to help you optimise your licencing strategy.