The Microsoft Office ecosystem has evolved significantly since the days of rushing to OfficeMax to buy a physical copy of software. Today, if you work in an office, you’ve likely encountered the Microsoft 365 subscription model, which Microsoft recently updated to fully integrate its growing Copilot artificial intelligence tool. As a result, many subscription tiers of Microsoft 365 are increasing in price to accommodate these new AI features.
Currently, the Microsoft 365 Personal plan costs $99.99 per year ($9.99 per month), while Family and Premium plans are offered at $129.99 ($12.99 per month) and $199.99 ($19.99 per month) annually, respectively. For users looking to avoid these higher subscription costs or who do not want the AI integration, Microsoft offers alternative options: a “Classic” legacy plan without Copilot or a one-time purchase of the Office software.
For those who dislike subscriptions, the one-time Office Home purchase is available for $149, allowing installation on a single device. This approach can be cost-effective compared to subscription fees over time if the one-device limit suits your needs. Alternatively, Microsoft provides a temporary option to switch to the 365 Personal or Family Classic plans at lower prices ($69.99 and $99.99 per year, respectively), which include the same core software but without integrated Copilot AI. However, these Classic plans are expected to be phased out eventually in favor of the modern subscription models.
The primary difference in the new Microsoft 365 plans is the inclusion of integrated Copilot AI across all compatible apps, which assists users with drafting text, brainstorming ideas, and more. Additionally, Microsoft has introduced Designer, an AI-powered design tool. Aside from these AI enhancements, the plans retain the same apps as before, including Word, Excel, PowerPoint, Outlook, OneNote, OneDrive storage, and Defender. Usage limits remain consistent, with Personal plans supporting one user on up to five devices, and Family plans accommodating six users on five devices each. The Premium plan additionally offers extended Copilot usage and exclusive AI features like Deep Research for advanced users.
In summary, Microsoft’s updated subscription plans cost more to support the integration of AI tools such as Copilot and Designer. Users who do not require these AI capabilities can save money by choosing the Classic legacy plans or a single-device, one-time Office license instead.
