Sherweb's Microsoft updates for MSPs — July 2026

Microsoft packed a lot into July, headlined by new agentic experiences in Microsoft 365 Copilot and a new usage-based billing model to go with them. On top of that, the July 1 price increases are now in effect, and Microsoft has rolled out a fresh set of FY27 promotions worth putting to work.

Here’s what to have on your radar this month, and what each change means for you and your customers.

TLDR: Deadlines and pricing

Short on time? Here’s what’s time-sensitive and what’s changing financially.

Deadlines to watch

• September 30, 2026: Microsoft 365 E3 and E5 FY27 promotions end, along with the new one-year Copilot promotions and the Windows 365 Enterprise promo. Jump to section.
• October 2026: Partner margins drop 5% on several legacy and standalone products, including Office 365 E1/E3 and Microsoft 365 Apps. Jump to section.
• December 31, 2026: Microsoft 365 E7 promotions end, plus the Copilot Business and Business Basic + Copilot Business promos. Jump to section.
• June 30, 2027: Windows 365 Business, Flex and Government promotions end. Jump to section.

Pricing at a glance

• Now in effect: July 1 commercial Microsoft 365 price increases (full table below).
• Program changes: FY27 CSP incentives now reward growth, security and AI over flat run-rate volume, with the Modern Work and Dynamics 365 run-rate rebate retired. Jump to section.
• New permanent SKUs: Microsoft 365 Business with Copilot, from $23.50 USD per user/month. Jump to section.
• New billing model: Usage-based Copilot Credits for Cowork and Scout, from $0.01 per credit. Jump to section.
• No change: August 1 license-based pricing, since no NCE preview list is being published. Jump to section.

Product and feature updates

New agentic experiences: Copilot Cowork and Microsoft Scout

Microsoft has announced new agentic experiences in Microsoft 365 Copilot: the general availability of Copilot Cowork and a new personal agent called Microsoft Scout. Alongside them comes a new usage-based billing model built on Copilot Credits, which is the part worth paying closest attention to.

Copilot Cowork is now generally available

Cowork is an agentic system for complex, long-running tasks. You describe the outcome you want, and Cowork works through the steps and hands back a finished result rather than a draft.

Cowork requires a Microsoft 365 Copilot license and runs inside your customers’ existing Microsoft 365 security, compliance and governance controls.

With general availability, Cowork introduces several new capabilities:

• Multiple AI models selected automatically based on the task at hand
• Enhanced security and compliance controls
• Support for partner and Dynamics 365 plugins

Introducing Microsoft Scout

Microsoft Scout is an always-on personal agent, currently available in Frontier to a limited set of customers. It connects across cloud, desktop and web, integrating with Teams, Outlook, OneDrive and SharePoint, while leveraging data such as chats, emails, calendars and contacts to help throughout the day.

How does billing shift with Copilot Cowork? Usage-based pricing with Copilot Credits

This is the real change. Instead of flat per-seat pricing, customers are charged based on actual usage, measured in Copilot Credits. For Cowork, each task is priced by the models, context, tools and runtime it uses.

Pay-as-you-go runs $0.01 per credit, or customers can commit usage upfront for a discount. Scout pricing will vary by usage, with more guidance to come from Microsoft. Cowork is off by default, and admins can set spending limits, budgets and alerts at the tenant, group and user level.

What this means for you: Usage-based billing is a different conversation than per-seat licensing, and the upside is control. It also opens up services work around Cowork: helping customers spot and prioritize high-value, multi-step scenarios, supporting agent strategy and lifecycle management as they scale and guiding cost and consumption strategy (pay-as-you-go versus prepaid credits).

For more information, Microsoft has a partner launch kit, a cost estimator and partner FAQs for Cowork and Scout to help you get up to speed.

Now available: Microsoft 365 Business with Copilot SKUs

As of July 1, 2026, the Microsoft 365 Business with Copilot SKUs previewed in the June price list are generally available. These turn a successful promotional motion into a permanent, predictable offer you can build around.

New permanent offers (1 to 300 seats, annual commit with annual billing):

• Microsoft 365 Business Standard + Copilot Business: $23.50 USD per user/month
• Microsoft 365 Business Premium + Copilot Business: $32 USD per user/month

Promotional offers (1 to 300 licenses, annual subscription with annual billing):

• New: Microsoft 365 Business Basic + Copilot Business: $21 USD per user/month, after a 25% promo running through December 2026
• Extended: Microsoft 365 Copilot Business: $18 USD per user/month, after the 15% promo was extended through December 2026

With Copilot moving from promo bundles to always-on SKUs with stable pricing, AI becomes part of the core Microsoft 365 Business suites rather than an add-on you position separately.

What this means for you: Standardized SKUs simplify the SMB sales motion and give you cleaner upsell and renewal conversations. For customers ready to adopt AI at scale, these become your go-to SMB offerings, and they set up recurring revenue and services around Copilot. Learn more.

Pricing updates and promotions

Reminder: July 1 pricing updates for commercial Microsoft 365 suites are now in effect

Microsoft’s price increases for commercial Microsoft 365 suites took effect July 1, 2026, for new and renewing customers. Existing customers affected by the increase will see the new prices at their next renewal after July 1.

Here are the list price changes:

These list prices are for SKUs that include Microsoft Teams. Suites without Teams can also be purchased and will see an equivalent dollar increase. List prices apply globally with local market adjustments for certain regions. Pricing shown is for annual paid yearly commitment. Monthly paid monthly and annual paid monthly will have an equivalent increase.

What this means for you: As customers reach their renewals, the increase is a natural opening for upsell conversations toward Microsoft 365 E3/E5 and Microsoft 365 Business plus Copilot, which raises both customer value and your margins.

What this means for your customers: Nonprofit pricing adjusts in line with commercial pricing, since it’s set as a fixed percentage discount off commercial rates.

For information on billing impacts specific to Sherweb partners, see Sherweb’s FAQ. Learn more on Microsoft Learn and on Microsoft’s blog.

July price list update: No August NCE license-based services preview

There’s no NCE license-based services preview price list on July 1, 2026 for August pricing, because no changes are scheduled for the August 1 license-based services price list. If Microsoft announces future pricing updates, they’ll come through the standard CSP pricing channels. Learn more.

FY27 promotions: Microsoft 365 and Copilot

As Microsoft opens its new fiscal year, it has extended a set of CSP promotions and added new Copilot promotions, in line with its push to help partners speed up AI adoption.

Microsoft 365 E3, E5 and E7

All Microsoft 365 E3 and E5 promotions are extended through September 30, 2026. Microsoft 365 E7 promotions run through December 31, 2026.

Microsoft 365 Copilot and Copilot Business

Both Copilot one-year promotions are new for FY27 and run through September 30, 2026. Microsoft is also introducing a Business Basic plus Copilot Business promotion and extending the Copilot Business standalone promotion through December 31, 2026.

What this means for you:

• Prioritize the right customers. Target accounts with existing Microsoft 365 E3, E5 or Business investments, budget clarity, AI readiness and active Copilot pilots. Use ASPX for targeting data.
• Lead with commitment. Position the three-year promos for customers with budget clarity and plans to expand Copilot across more users and use the one-year promos for those still validating early adoption.
• Grow every deal. Use the promotions to expand seat counts, increase deal size and lock in longer-term AI commitments.

Learn more.

New Windows 365 promotions: Save up to 25%

As of July 1, partners can unlock up to 25% savings across Windows 365 editions. That lowers the barrier to entry and makes Cloud PC adoption an easier conversation with both new and existing customers. Learn more.

Admin and licensing updates

Dynamics 365 Business Central Dual Use Rights (DUR) license key update

If you support customers running Dynamics 365 Business Central online with on-premises deployments through Dual Use Rights, there’s a licensing change to track. As of June 5, 2026, customers need to download and replace their DUR license keys every six months to keep access to their on-premises environment, or they risk disruption to service.

We covered this in full in our July Dynamics 365 updates blog, so if you run a Dynamics practice, head there for the details. You can also learn more from Microsoft directly.

Microsoft partner program updates

What’s changing with FY27 CSP incentives?

Microsoft has updated its FY27 CSP incentive program, shifting rewards away from flat run-rate volume toward growth, security and AI-led solutions.

What’s changing:

• Incentives now prioritize premium Microsoft 365, Dynamics 365, Azure and Copilot-related growth opportunities
• The Modern Work and Dynamics 365 run-rate rebate has been retired
• A new Growth Accelerator rewards year-over-year growth and upsell activity
• Starting October 2026, partner margins drop by 5% on several legacy and standalone products, including Office 365 E1/E3 and Microsoft 365 Apps

What this means for you: The strongest opportunities now lie in premium offerings like Business Premium, Copilot, E5 and E7, and in net-new growth and customer upgrades. The October margin change is worth planning for now if you carry a lot of legacy or standalone product volume. Read our full breakdown on the changes to learn how to get the most out of the new model.

Skilling updates for summer 2026

Microsoft is retiring a batch of certifications between June 1 and August 31, 2026, as it shifts toward AI-era skilling. Most have a direct replacement focused on building and operating AI solutions, and if you completed a retiring certification before its retirement date, it stays valid for a year.

Here’s what changed:

• Azure AI Engineer Associate (AI-102) retired June 30, replaced by Azure AI Apps and Agents Developer Associate (AI-103)
• Azure Data Scientist Associate (DP-100) retired June 1, replaced by Machine Learning Operations (MLOps) Engineer Associate (AI-300)
• Dynamics 365 Field Service Functional Consultant Associate (MB-240) retired June 30, with Dynamics 365 Contact Center AI Engineer Associate (AB-250) arriving once it reaches general availability in July
• Four certifications (MB-335, MB-700, PL-500 and PL-600) retired June 30 and are collectively replaced by Agentic AI Business Solutions Architect (AB-100)

What this means for you: Review which certifications your team holds and plan any transitions to the new AI-focused paths. Existing credentials stay valid for a year, so there’s time, but the sooner you map it out the better. Learn more.

Other updates

Business Central for SMB: Ready-to-use campaign resources

Microsoft has shared a Business Central for SMB Campaign in a Box, a customizable marketing campaign that partners can use to start SMB conversations and build pipeline. If Business Central is part of your practice, you’ll find the full rundown in our July Dynamics 365 update blog. You can also explore Microsoft’s GTM resources.

Explore MCAPS Start for Partners sessions

This year’s MCAPS Start for Partners sessions are built to help partners start FY27 with a clear plan, whether you’re building AI solutions, expanding managed services or scaling a security practice.

The sessions span Microsoft 365 Copilot and agents, cloud modernization and security, with a first look at updated program benefits and investments tied to this year’s cloud and AI priorities. Take a look at the preview, with more sessions to come.

Webinars and events

Sherweb webinars

• The latest Microsoft 365 threats and how to shut them down (on demand)

Microsoft webinars and events

Technical training:

• Cloud and AI Platform skilling
• AI Business Solutions skilling
• Security skilling
• Certification weeks for the Microsoft AI Cloud Partner Program

Sales training:

• Sales and Tech Deal Ready skilling

Other events:

• Microsoft Partner FY27 GTM Kickoff Event (July 28)
• Microsoft AI Business Solutions Partner Executive Summit (July 29 to 30)

Staying ahead of Microsoft change

If you have questions about how any of these updates affect your Sherweb account or your customers, reach out to our team. We’re here to help you turn Microsoft’s changes into opportunities for your business.

Catch up on past updates: June 2026 | May 2026