Microsoft Licensing Insights: 10 Changes You Might’ve Missed

Microsoft continues to make significant changes across its licensing, product portfolio and commercial models. For customers, keeping track of these changes is becoming increasingly important, particularly where they affect renewals, pricing, end-of-support dates or how Microsoft services are purchased and consumed. Here are 10 Microsoft changes that businesses should be aware of in 2026, from end-of-support deadlines and pricing updates to new purchasing options and consumption-based services.

Microsoft Publisher reaches end of life in October 2026. For Microsoft 365 subscribers, Publisher will no longer be available after 1 October 2026. The perpetual version of Publisher will reach end of support on 13 October 2026, alongside Office LTSC 2021. Microsoft recommends moving common Publisher scenarios to applications such as Word and PowerPoint.

For organisations that still have Publisher files, this is more than simply a product retirement. Existing .pub files may need to be identified and converted before access to Publisher is removed.

The extended support period for Exchange Server 2016 and Exchange Server 2019 ends in October 2026. Microsoft previously extended the original 2025 deadline through Extended Security Updates. The additional support period now comes to an end, meaning organisations still running these versions need to consider their next step.

For many organisations, this will mean accelerating a move to Exchange Online. For others, there may be requirements that mean a supported on-premises Exchange deployment remains necessary.

Exchange is not the only legacy communications platform approaching its final deadline. The extended support period for Skype for Business Server 2015 and 2019 also ends in October 2026.

For organisations that have already moved to Microsoft Teams, this may simply be the final stage of retiring legacy infrastructure. However, businesses still operating Skype for Business Server should be assessing migration requirements, dependencies and licensing implications.

One of the more visible changes this year is a change in terminology. Microsoft 365 Copilot is now named Microsoft Copilot, while Microsoft 365 Copilot Chat is now Microsoft Copilot Chat. Microsoft states that the naming change does not represent a change to security, compliance or privacy. However, the distinction between Copilot Chat and the licensed Microsoft Copilot experience remains important. Microsoft Copilot Chat can be available to organisations with eligible Microsoft 365 subscriptions, while the licensed Copilot experience provides additional capabilities and access to work-based data.

From 1 October 2026, Microsoft is applying a 5% cost-of-capital uplift to annual-term CSP software subscriptions that are billed monthly. This applies to products such as SQL Server, Windows Server, Client Access Licences and System Center. The uplift applies to new purchases and to existing subscriptions when they renew on or after 1 October 2026. There is no equivalent change to annual upfront billing or month-to-month subscriptions. This makes the choice of billing model increasingly relevant when reviewing software subscriptions. For example, an organisation may value monthly billing for cash-flow reasons, but should now factor the additional cost into their purchasing decision.

Microsoft introduced a new three-year CSP purchasing option for Microsoft Copilot in May 2026 for purchases of 100 or more licences. This gives organisations another option when planning a larger Copilot deployment and brings Copilot more closely into line with existing three-year purchasing options for Microsoft 365 E3 and E5.

For customers moving beyond a short pilot and towards a longer-term AI strategy, purchasing term is now another consideration alongside licence quantity, adoption and deployment readiness.

Microsoft’s Copilot strategy is increasingly combining traditional per-user licensing with consumption-based services. From the 1^st of December 2026, new Microsoft 365 Copilot Business licences purchased through CSP will have usage-based billing enabled by default. This applies to eligible usage-based experiences including Copilot Cowork, Work IQ APIs and GitHub Copilot Harness. This is an important change because the cost of AI is no longer necessarily determined solely by the number of licences purchased. Customers will increasingly need to consider both who has access to AI and how much AI they consume.

For organisations using perpetual or long-term servicing versions of Microsoft’s productivity applications, another important deadline is approaching. Support for Office LTSC 2021, Project LTSC 2021 and Visio LTSC 2021 ends on 13 October 2026. After this date, these products will no longer receive security updates, improvements or technical support.

This is particularly relevant for organisations that have deliberately retained perpetual software because of application compatibility, regulatory or operational requirements.

Microsoft has also changed its approach to local currency pricing for Commercial Cloud services. From FY27, Microsoft is moving towards annual local currency pricing updates every January. The first update under the new approach is scheduled for 1 January 2027, with guidance expected in advance. Product-specific pricing changes can still be communicated separately.

For UK customers, this means foreign exchange-related pricing changes should become easier to anticipate and incorporate into annual budgeting.

Perhaps the biggest change is not a single SKU or product announcement. It is the direction Microsoft is taking its commercial model. Traditional licensing has largely been based around users, devices and fixed subscription terms. Increasingly, Microsoft is introducing consumption-based elements alongside those licences.

Copilot is a clear example. Customers may have a licence that provides access to Copilot while additional AI experiences introduce consumption measured through Copilot Credits and, where applicable, funded through pay-as-you-go billing. This creates a new consideration for IT and procurement teams: licence management alone is no longer enough, organisations need visibility of usage, consumption and associated costs.

The common theme across these changes is the need to be more proactive about Microsoft licensing. Some changes have a clear deadline, such as Publisher and Office LTSC 2021 reaching end of support. Others affect commercial decisions, such as the 5% CSP software subscription uplift or the introduction of new Copilot purchasing options.

And then there are broader changes to how Microsoft services are consumed, particularly around AI. Rather than waiting until a renewal or end-of-support date is approaching, customers should regularly review:

Keeping up with Microsoft’s licensing and product changes can be challenging, particularly when updates affect pricing, contract terms, end-of-support dates and new consumption-based services. At Telefónica Tech, our Microsoft licensing specialists can help you understand what these changes mean for your organisation and identify opportunities to optimise your Microsoft estate.

Whether you are approaching a renewal, planning a migration, reviewing your CSP subscriptions or looking at how to manage the growing cost of Copilot and AI consumption, we can help you assess your options and build a licensing strategy around your business requirements.

Talk to Telefónica Tech today to review your Microsoft licensing strategy and make sure you are prepared for what comes next →