M365 E7 from Microsoft Incoming!!
Directions on Microsoft has published news about a new $99 p/m SKU that is probably going to be released in the near future.
Commentary about this can be found across many publications. If you are in any way involved with AI at your company and/or in any negotiations with Microsoft regarding licensing agreements, I URGE you to read the two documents published by Directions.
Below is some additional opinion and commentary that may be useful to ponder.
Driving more investment amid sluggish adoption
Microsoft has poured billions (and more billions) into AI infrastructure, but standalone M365 Copilot adoption remains sluggish (reportedly hovering around just 3.3% of its 450 million commercial users). To drive a return on investment, the rumoured E7 "Super SKU" (expected to cost around $99 per user/month) potentially bundles E5, Copilot, and a new "Agent 365" governance hub. It shifts the paradigm from licensing humans to licensing digital workers, requiring AI agents to have their own Entra IDs, inboxes, and compliance policies.
This potentially drastically increases IT budgets, especially as leaks suggest Microsoft may introduce a hybrid model combining flat per-seat fees with Azure-style, unpredictable consumption based metering for AI workloads.
The Google Lockout
This is a strategic move designed to "box out" competitors like Google Workspace. While Google is aggressively integrating Gemini AI directly into its baseline subscriptions to make AI highly accessible, Microsoft is appearing through this new SKU (as yet still a "rumour") to monopolise the enterprise AI operating environment.
By goading organisations to use Agent 365 and Entra ID to secure, grant permissions to, and govern all AI agents, Microsoft is building a deep architectural moat.
This entrenches companies deeper into the Microsoft ecosystem, making it incredibly difficult and costly to securely plug Google Gemini or third-party AI models into enterprise workflows.
How big is this bet?
Sticker Shock: Jumping to nearly $100 a month per user is a massive financial hurdle, particularly as baseline M365 E3 and E5 prices are already scheduled for general hikes in July 2026.
Microsoft risks customer fatigue, alienation, and hardball negotiations during Enterprise Agreement (EA) renewals.
Having an EXPERT partner to support you in these renewals is now critical.
The "Shelfware" Problem: Enterprises are still struggling to prove the day-to-day ROI of standard M365 E5 let alone Copilot features.
Driving customers to buy an ultra-premium bundle to manage autonomous AI agents before the technology is fully mature could lead to massive resentment from ending up with "shelfware" (paying for software that provides no value).
Driving Customers to Custom Alternatives: By taxing "micro-agent" architectures with high per-seat governance fees, Microsoft might unintentionally drive price-sensitive enterprises to build custom, open-source AI infrastructures using raw compute rather than buying into the pre-packaged M365 ecosystem.
Will Microsoft Pull this Off?
Despite these significant risks and the undeniable sticker shock, Microsoft is uniquely positioned to succeed with this strategy.
Enterprises are already so deeply entrenched in the Microsoft ecosystem that many are realising Copilot, anchored by the Microsoft Graph and Purview—is the only enterprise AI solution integrated deeply enough to enforce the strict data governance, sensitivity labels, and security guardrails required for autonomous AI without massive data leakage risks.
To execute this shift, Microsoft is likely to adopt a playbook reminiscent of Broadcom’s recent, highly lucrative strategy with VMware: bypassing broad market resistance (and it's partner channel) by directly engaging and heavily pressuring its top (let's say) 2,000 global enterprise customers through high-touch, customised Enterprise Agreement negotiations (and we are already seeing evidence of these agreements).
By driving the world's largest, most heavily regulated organisations to adopt E7, Microsoft can cement this high-premium, agent-centric architecture as the inescapable industry standard, validating their massive AI gamble regardless of potential mid-market pushback.
Through this entire process, ensuring that you know exactly what value (or not) you are getting from the Microsoft suites you are already paying for, along with a support contract that ensures problems are quickly resolved, and new capabilities you are already paying for are implemented is absolutely essential.
AI is inevitable, and securing and preparing your environment for its deployment is clearly not an option anymore.
Now that you have read all this, please re-read the Directions publications, as I regard them the "Gold Standard" for predicting what Microsoft is going to do, and another read-through will help ponder how to deal with an AI-infused future!
Please contact your First Technology account manager to connect you with our Universal Support specialists to ensure that you get the necessary advice and support to plan what support ecosystem you need to ensure you can adopt what comes your way, even if what Microsoft is offering is too rich - there are always alternatives.
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