Software Price Increases 2025 – 2026
The enterprise software landscape in 2025 and 2026 continues to experience aggressive price increases that fundamentally challenge IT budget planning and procurement strategies. This comprehensive analysis reveals an industry-wide escalation driven by AI monetization, subscription model enforcement, the removal of legacy volume discounts, and continued post-acquisition restructuring. From Microsoft’s sweeping M365 increases to VMware’s ongoing subscription mandates under Broadcom, organizations face compounding cost pressures across virtually every software category.
Scale and Scope of Price Increases
The 2025-2026 cycle marks a continuation and intensification of the pricing trends that began in 2024. Microsoft alone is implementing increases across its entire M365 portfolio effective July 2026, with frontline worker licenses seeing jumps of 25-33% and business tiers rising 12-17%. Combined with the November 2025 removal of Enterprise Agreement volume discounts (worth up to 12%), large organizations face a double hit on their Microsoft spend.
VMware’s transformation under Broadcom remains the single most disruptive force, with customers reporting net increases of 150% to 1,200% as perpetual licenses are forcibly converted to subscription bundles. The new 72-core minimum for vSphere Standard (up from 16) disproportionately impacts SMBs, while a 20% late renewal penalty adds further financial pressure.
Beyond these headline-grabbers, the breadth of increases is striking. Google Workspace raised prices 17-22% in early 2025. Atlassian is implementing 5-15% cloud increases with Data Center hikes reaching 15-40%. Adobe restructured Creative Cloud with effective increases up to 27%. SAP, Oracle, IBM, Salesforce, ServiceNow, AWS, and Cisco all implemented their own rounds of increases, creating a compounding effect that no IT budget can absorb without strategic intervention.
Notable Software Vendor Price Increases 2025 – 2026
| Vendor | Product / Service | Previous Price | New Price | Increase % | Pricing Unit | Effective Date | Category |
|---|---|---|---|---|---|---|---|
| VMware (Broadcom) | VCF / vSphere Subscription | Perpetual baseline | Subscription only | 150 – 1,200% | per core/year | April 2025 | Virtualization |
| VMware (Broadcom) | vSphere Standard Min Cores | 16 cores min | 72 cores min | 350%+ min cost | core license | April 2025 | Virtualization |
| Microsoft | Microsoft 365 F1 (Frontline) | $2.25 | $3.00 | 33% | per user/month | July 2026 | Productivity |
| Microsoft | Windows Enterprise E3 | $6.63 | $7.63 | 15% | per user/month | July 2026 | OS Licensing |
| Microsoft | Microsoft 365 F3 (Frontline) | $8.00 | $10.00 | 25% | per user/month | July 2026 | Productivity |
| Microsoft | Apps for Business | $8.25 | $10.00 | 21% | per user/month | July 2026 | Productivity |
| Microsoft | Microsoft 365 Apps | $12.00 | $14.00 | 17% | per user/month | July 2026 | Productivity |
| Microsoft | Business Basic | $6.00 | $7.00 | 16.7% | per user/month | July 2026 | Productivity |
| Microsoft | Business Standard | $12.50 | $14.00 | 12% | per user/month | July 2026 | Productivity |
| Microsoft | Office 365 E3 | $23.00 | $26.00 | 13% | per user/month | July 2026 | Productivity |
| Microsoft | Microsoft 365 E3 | $36.00 | $39.00 | 8.3% | per user/month | July 2026 | Productivity |
| Microsoft | Microsoft 365 E5 | $57.00 | $60.00 | 5.3% | per user/month | July 2026 | Productivity |
| Microsoft | EA Volume Discount Removal | Up to 12% discount | 0% discount | Up to 12% | enterprise agreement | November 2025 | Licensing Model |
| Adobe | Creative Cloud Pro (All Apps) | ~$55 | $69.99 | ~27% | per user/month | June 2025 | Creative Software |
| Workspace Business Plus | $18.00 | $22.00 | 22.2% | per user/month | January 2025 | Productivity | |
| Workspace Business Starter | $6.00 | $7.00 | 16.7% | per user/month | January 2025 | Productivity | |
| Workspace Business Standard | $12.00 | $14.00 | 16.7% | per user/month | January 2025 | Productivity | |
| Atlassian | Jira / Confluence Data Center | Baseline | +15 – 40% | 15 – 40% | per user/year | February 2026 | Project Management |
| Atlassian | Bitbucket Cloud (Std & Premium) | Baseline | +10% | 10% | per user/month | October 2025 | Development Tools |
| Atlassian | Jira / Confluence Cloud (Premium) | Baseline | +7.5% | 7.5% | per user/month | October 2025 | Project Management |
| IBM | Cloud Security & Compliance Center | $8.24 | $18.00 | 118% | per instance/month | January 2025 | Cloud Security |
| IBM | SWMA for IBM i | Baseline | +10% | 10% | annual maintenance | January 2026 | Maintenance |
| IBM | Software Portfolio (Global) | Baseline | +6% | 6% | portfolio-wide | January 2026 | Enterprise Software |
| Red Hat (IBM) | All Software Subscriptions (EUR/GBP) | Baseline | +10% | 10% | subscription | April 2025 | Enterprise Linux |
| AWS | EC2 p5e.48xlarge (ML Capacity) | $34.61/hr | $39.80/hr | 15% | per hour | January 2026 | Cloud / ML |
| AWS | EC2 p5en.48xlarge (ML Capacity) | $36.18/hr | $41.61/hr | 15% | per hour | January 2026 | Cloud / ML |
| SAP | Cloud ERP Private Edition | Baseline | +10%+ | 10%+ | per renewal | 2025 | ERP |
| SAP | ECC 6 / S/4HANA Support | Baseline | +5% | 5% | annual support | 2025 | ERP |
| Oracle | Java (Per-Employee Model) | Per-processor | Per-employee | Varies (massive) | per employee/year | Ongoing 2025-2026 | Software Licensing |
| Oracle | Support Services | Baseline | +4 – 15% | 4 – 15% | annual | Ongoing | Support |
| Salesforce | Sales Cloud Enterprise | ~$165 | $175 | 6% | per user/month | August 2025 | CRM |
| Salesforce | Sales Cloud Unlimited | ~$330 | $350 | 6% | per user/month | August 2025 | CRM |
| ServiceNow | Platform (Annual Uplift) | Baseline | +5 – 10% | 5 – 10% | annual contract | Ongoing | ITSM |
| ServiceNow | Now Assist (AI Add-on) | Base price | +30 – 45% | 30 – 45% | per user add-on | 2025 | AI / ITSM |
| Cisco | Hardware & Technical Services | Baseline | +3.4% | 3.4% | portfolio-wide | September 2025 | Networking |
Vendor Risk Tiers
HIGH RISK 50%+ Increases
- VMware (Broadcom): 150-1,200% via forced subscription migration and bundle restructuring
- IBM Cloud Security: 118% increase on Security & Compliance Center
- Oracle Java: Massive cost impact from per-employee licensing model shift
MEDIUM RISK 15 – 50% Increases
- Microsoft Frontline: 25-33% increases on F1 and F3 licenses
- Adobe Creative Cloud: ~27% with Pro tier restructuring
- Google Workspace: 17-22% across all business tiers
- Atlassian Data Center: 15-40% on Jira and Confluence DC
- ServiceNow AI: 30-45% for Now Assist add-on
- Microsoft Apps/Windows: 15-21% on standalone products
LOWER RISK Under 15% Increases
- Microsoft M365 E3/E5: 5-13% on enterprise suites
- IBM Software Portfolio: 6% global price harmonization
- Red Hat: 10% on EUR/GBP subscriptions
- Atlassian Cloud: 5-10% on standard and premium tiers
- Salesforce: 6% on Sales/Service Cloud Enterprise and Unlimited
- SAP: 5-10% on support and cloud ERP renewals
- Oracle Support: 4-15% annual increases
- ServiceNow: 5-10% annual contract uplift
- AWS ML Instances: 15% on EC2 Capacity Blocks
- Cisco: 3.4% portfolio-wide uplift
Key Observations
AI Monetization (“AI Tax”): Vendors across the board are bundling AI features into existing products and using this as justification for price increases. Adobe’s Creative Cloud Pro restructuring, ServiceNow’s Now Assist add-on (30-45%), and Microsoft’s Copilot ecosystem all follow this pattern. Whether customers use these AI features or not, they are paying for them.
Subscription Enforcement: VMware’s forced migration from perpetual to subscription licensing continues to be the most aggressive example, but the pattern is industry-wide. Vendors are eliminating perpetual options and locking customers into recurring revenue streams with multi-year commitments.
Discount Erosion: Microsoft’s removal of automatic EA volume discounts (November 2025) signals a broader trend where vendors are clawing back negotiated benefits. Large enterprises that relied on volume-based pricing are particularly exposed.
Bundle Restructuring: Both VMware and Adobe are consolidating product lines into larger bundles, forcing customers to pay for capabilities they may not need. This approach inflates per-user costs while vendors claim “more value.”
Virtualization: Remains the highest absolute impact category due to VMware’s ongoing restructuring under Broadcom. Organizations with significant VMware footprints face existential cost decisions.
Productivity Suites: Both Microsoft and Google implemented broad increases across their entire productivity portfolios, affecting virtually every organization. The combined effect of M365 price hikes plus EA discount removal creates a compounding cost challenge.
Creative & Design: Adobe’s restructuring of Creative Cloud into Pro and Standard tiers represents a significant shift, with effective increases of up to 27% for users who need full AI capabilities.
ERP & Business Systems: SAP and Oracle continue their steady drumbeat of support fee increases, while SAP’s cloud ERP renewals carry 10%+ premiums. These increases are particularly painful because switching costs are prohibitively high.
ITSM & DevOps: ServiceNow’s annual uplift model (5-10%) combined with aggressive AI add-on pricing (30-45%) creates a dual cost pressure. Atlassian’s Data Center increases of 15-40% push organizations toward their cloud offerings.
Cost Impact Summary by Organization Size
The following estimates illustrate the annual cost impact of the 2025-2026 price increases across different organization sizes. These figures account for a typical enterprise software stack including productivity suites, virtualization, ERP, CRM, and development tools. VMware-related costs remain the dominant driver for organizations with significant virtualization footprints.
| Organization Size | Estimated Annual Cost Impact | Increase Over Prior Year | Primary Cost Drivers |
|---|---|---|---|
| Small (50 users) | $70,000 – $90,000 | 130 – 150% | VMware migration, M365 increases, Google Workspace |
| Medium (250 users) | $350,000 – $450,000 | 65 – 80% | VMware, M365, Atlassian, Adobe CC |
| Large (1,000 users) | $1.4M – $1.8M | 65 – 75% | VMware, M365 + EA discount loss, SAP/Oracle support |
| Enterprise (5,000 users) | $7M – $9M | 65 – 75% | VMware, M365, Oracle Java, SAP, ServiceNow |
Major Vendor Analysis
Microsoft has executed a multi-layered pricing strategy for 2025-2026 that hits organizations from multiple angles. The headline is the July 2026 M365 price increase affecting virtually every SKU, from Business Basic (+16.7%) to Frontline F1 (+33%). But the more strategically significant move was the November 2025 removal of automatic volume-based discounts from Enterprise Agreements, which can add up to 12% to costs for large organizations at renewal. Combined with the Copilot add-on at $30/user/month and standalone product increases of 15-21%, Microsoft is systematically extracting more revenue per seat while positioning AI as the justification.
VMware under Broadcom continues to be the most disruptive force in enterprise software pricing. The April 2025 mandate requiring all new deployments to use subscription-only licensing, combined with the consolidation from 8,000+ SKUs to a handful of bundles (VCF and VVF), has created reported price increases of 150% to 1,200%. The increase of minimum core requirements from 16 to 72 for vSphere Standard disproportionately impacts SMBs. A 20% late renewal penalty and pressure toward 3-5 year commitments further reduce customer flexibility. While Broadcom announced a 50% reduction in VCF per-core pricing (from $700 to $350), the bundled structure often results in net increases for customers who previously purchased standalone products.
Oracle’s most significant pricing move is the ongoing enforcement of its per-employee Java licensing model, which requires organizations to license every employee regardless of whether they directly use Java. For a mid-sized company with 500 employees, this can mean annual Java licensing costs of approximately $90,000. Gartner predicts that by 2026, 20% of organizations using Java will face Oracle audits. Additionally, Oracle support renewal costs continue to climb at 4-15% annually, with cloud contracts offering fewer contractual protections against price resets than traditional on-premise agreements.
IBM has announced a global price harmonization effective January 2026, implementing approximately 6% increases across most of its software, hardware, and services portfolio. Notable exceptions include IBM i software maintenance (SWMA) at 10% and Cloud Security & Compliance Center, which saw a dramatic 118% increase (from $8.24 to $18.00 per instance/month) in January 2025. Red Hat, as an IBM subsidiary, implemented a 10% increase on all software subscriptions for EUR and GBP customers in April 2025, attributed to foreign exchange fluctuations.
The SaaS sector shows a consistent pattern of annual price escalation. Salesforce implemented a measured 6% increase on Enterprise and Unlimited editions. Adobe restructured Creative Cloud into Pro and Standard tiers with effective increases of up to 27%, bundling generative AI features as the value justification. ServiceNow’s mandatory 5-10% annual uplift, combined with the Now Assist AI add-on at 30-45% premium, creates significant compounding costs. Atlassian’s approach is particularly aggressive on Data Center products (15-40% increases in February 2026), while cloud increases remain more moderate at 5-10%, clearly incentivizing cloud migration.
Licensing Model Evolution
The 2025-2026 cycle accelerates several fundamental shifts in how software is licensed and priced. The most visible is the continued elimination of perpetual licensing, with VMware’s forced subscription migration serving as the template that other vendors are watching closely. Organizations that built their IT infrastructure on the assumption of perpetual license ownership are facing a structural cost increase that goes far beyond typical annual adjustments.
AI-driven pricing tiers represent the newest evolution. Adobe’s split of Creative Cloud into “Pro” and “Standard” tiers, ServiceNow’s consumption-based Now Assist pricing, and Microsoft’s $30/user Copilot add-on all establish a pattern where AI capabilities command premium pricing. This creates a two-tier market where organizations must decide whether AI features justify 20-45% cost premiums, often without clear ROI data.
Oracle’s per-employee Java licensing model represents perhaps the most radical licensing model change, decoupling license costs from actual software usage entirely. This approach, if adopted by other vendors, could fundamentally alter how organizations calculate software costs, shifting from usage-based to headcount-based models that are far more difficult to optimize.
The erosion of volume discounts, exemplified by Microsoft’s EA changes, signals that vendors are moving away from rewarding scale. Combined with minimum purchase requirements (VMware’s 72-core minimum), these changes disproportionately impact organizations at both ends of the size spectrum: SMBs that are forced to over-purchase, and large enterprises that lose their negotiated advantages.
Implementation Timeline
IBM Cloud price adjustments (IaaS, PaaS, Security & Compliance Center 118% increase). Google Workspace increases take effect for new customers (17-22%).
Google Workspace increases roll out to existing customers. Red Hat 10% increase on EUR/GBP subscriptions. VMware subscription-only mandate for new deployments. 72-core minimum for vSphere Standard.
Adobe Creative Cloud restructuring into Pro and Standard tiers (~27% effective increase).
Salesforce 6% increase on Enterprise and Unlimited editions of Sales Cloud, Service Cloud, and Field Service.
Cisco 3.4% portfolio-wide uplift on hardware and technical services. Atlassian Cloud price increases (5-10%).
Microsoft removes automatic EA volume-based discounts (up to 12% impact at renewal).
Palo Alto Networks retires Precision AI Network Security Bundle, replaces with Pro Bundle.
IBM global price harmonization (+6% across portfolio, +10% SWMA). AWS EC2 ML Capacity Blocks +15%.
Atlassian Data Center price increases (15-40% on Jira, Confluence, JSM).
Microsoft M365 price increases take effect across all Business, Enterprise, and Frontline SKUs (5-33%).
Strategic Recommendations
Conduct a comprehensive software asset inventory to understand your exact exposure to each vendor’s price increases. Review all contracts approaching renewal, particularly Microsoft EAs, VMware agreements, and Oracle support contracts. Assess Java usage across the organization to prepare for Oracle’s per-employee licensing enforcement. Lock in current pricing where possible through early renewals or multi-year commitments on favorable terms.
Invest in software asset management (SAM) capabilities to gain continuous visibility into license consumption and compliance posture. Evaluate VMware alternatives including Proxmox, Nutanix, and Hyper-V for organizations facing the most severe Broadcom-related increases. Assess open-source Java distributions (Eclipse Temurin, Amazon Corretto, Azul Zulu) to reduce Oracle Java exposure. Negotiate AI feature opt-outs where possible, particularly for ServiceNow Now Assist and Adobe Creative Cloud Standard tiers.
Develop a vendor diversification strategy that reduces concentration risk with any single vendor. Accelerate cloud-native architecture adoption to increase portability and reduce lock-in. Build internal capabilities around open-source alternatives for categories with the highest price pressure. Establish a dedicated software procurement function that treats vendor management as a strategic discipline rather than a tactical purchasing activity.
Risk Management Priorities
The 2025-2026 pricing landscape creates multiple overlapping risk categories that require systematic management. Vendor concentration risk is the most acute, as organizations heavily dependent on VMware, Microsoft, or Oracle face disproportionate exposure to pricing changes and licensing model shifts. The compounding effect of multiple vendor increases hitting simultaneously can overwhelm IT budgets that were planned based on historical 3-5% annual escalation assumptions.
Compliance and audit risk has intensified, particularly with Oracle’s aggressive Java licensing enforcement and the prediction that 20% of Java-using organizations will face audits by 2026. VMware’s new licensing structure, with its minimum core requirements and bundle mandates, creates new compliance complexities that organizations must actively manage.
Effective risk mitigation requires dependency assessment and mapping across the entire software portfolio, diversification planning for high-risk vendor categories, automated compliance monitoring to avoid audit penalties, and scenario-based budget planning that accounts for the full range of potential price increases. Organizations must prepare for continued pricing pressure and develop capabilities to respond proactively rather than reactively to vendor changes.
Future Outlook
The fundamental drivers behind the 2025-2026 price increases will persist and likely intensify. AI monetization is still in its early stages, and vendors will continue to bundle AI capabilities into existing products at premium prices. Market consolidation (Broadcom/VMware, Cisco/Splunk) reduces competitive pressure and gives acquirers pricing power. The shift from perpetual to subscription licensing is approaching completion for most major vendors, locking in recurring revenue streams that are structurally higher than the models they replace.
Regulatory responses remain slow and limited in scope. The EU’s Digital Markets Act and similar regulations may eventually constrain some pricing practices, but relief for immediate cost pressures is unlikely. However, competitive responses from alternative vendors and open-source projects are accelerating as the cost differential with incumbent vendors widens. Organizations willing to invest in vendor diversification and architectural flexibility will find increasingly viable alternatives.
The software vendor price increases of 2025-2026 represent a structural shift in enterprise software economics, not a temporary market adjustment. Success in this environment demands sophisticated software asset management capabilities, strategic vendor relationship management, and architectural flexibility that reduces switching costs and vendor dependencies. Organizations that respond strategically and proactively will achieve competitive advantages that extend beyond cost savings to include improved operational flexibility and enhanced strategic positioning in an increasingly expensive software environment.
Sources
- [Microsoft] Advancing Microsoft 365: New capabilities and pricing update
- [Microsoft] Microsoft 365 Pricing and Packaging Updates
- [Microsoft] Flexera: Microsoft licensing changes – How to prepare for additional price hikes
- [VMware] VMware Price Increase 2025: Key Details You Must Know
- [VMware] VMware Licensing Changes Explained: 2025-2026 Update for Enterprises
- [Oracle] Block64: Major Software Licensing Changes in 2026
- [Oracle] House of Brick: Oracle Support Renewal Costs 2025-2026
- [SAP] The Register: SAP Private Cloud Price Hikes
- [Salesforce] Salesforce: Pricing Update 2025
- [Adobe] Adobe: Changes to Creative Cloud Individual Plans
- [Google] 9to5Google: Google Workspace Price Increase 2025
- [IBM] IBM Cloud: Price Adjustments Documentation
- [IBM] Schneider: IBM Price Increases 2026
- [Red Hat] Schneider: Red Hat Price Increase 2025
- [Atlassian] Valiantys: October 2025 Atlassian Cloud Price Changes
- [Atlassian] Valiantys: Atlassian Data Center Price Changes in 2026
- [ServiceNow] Eesel: ServiceNow Pricing Guide
- [AWS] The Register: AWS EC2 Capacity Blocks Price Increase
- [AWS] Data Center Dynamics: AWS H200 EC2 Instance Price Increase
- [Cisco] Cisilion: Upcoming Cisco Price Changes
- [Palo Alto] Palo Alto Networks: End-of-Sale Announcements
