Your Software Raised Its Price for AI: Keep, Downgrade or Switch?

Keep the plan if staff use the new AI features weekly or the rise is small; downgrade the users who don't need them if your vendor lets you mix plans; switch only if a rival costs less after migration and retraining. For most small firms a rise of $1-2 per user a month is cheaper to absorb than to escape.

The Google Workspace price increase shows why the answer depends on the vendor. When Google built Gemini into its business plans in 2025, Business Standard rose to $14 per user per month, which Google described as only $2 more than Workspace without Gemini, and it stopped selling the separate Gemini add-ons, so no AI-free version was left to keep. Google also puts everyone in an organisation on the same edition, so you can't downgrade only the people who never touch Gemini. Microsoft, whose Business Basic and Standard prices rose on 1 July 2026, lets you mix plans user by user.

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The 2025-26 price rises that came bundled with AI

Most of the rises small businesses have met recently follow one pattern: an AI feature that used to be a paid add-on becomes part of the plan, and the plan price goes up for everyone. The exceptions are standalone AI products, which rise on their own.

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Not every AI launch raises your bill. Zoom retired its AI Companion brand in June 2026 and renamed the features after what they do, such as meeting summary and chat compose; they remain included on eligible paid Zoom Workplace plans. ZoomMate, launched on 1 June 2026 at $20 per user per month, is a separate agentic product rather than a price rise, and you only pay for it if you add it. Before reacting to any announcement, work out which of the two you're facing: a bundled increase you can't avoid, or an optional add-on you can decline.

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Price the rise over a year before reacting

Per-seat rises look trivial and add up quietly. Convert each one into a yearly figure with one line of arithmetic:

Extra cost per year = (new price - old price) x users x 12

Then note when the new price actually hits you, because that's how long you have to decide. Both suite rises applied to existing annual customers at renewal, not on the announcement date. Google moved existing monthly subscriptions to the new price from 17 March 2025 and Annual/Fixed-Term plans at their renewal date if that came later. Microsoft's July 2026 rise applies at each customer's next renewal on or after 1 July. A business that renewed in June 2026 has until June 2027.

A rise of a few hundred dollars a year sets a ceiling on how much effort a response deserves. Spending two weekends to save $216 is a poor trade unless the change also fixes something else.

Check who uses the AI you're now paying for

The rise is only waste for the people who never touch the new features, so find out who they are before deciding anything. Both suites now report it.

• Google Workspace: in the Admin console, go to Menu, then Generative AI, then Gemini reports. The org-level view shows active Gemini users and adoption per app; the user-level view grades each person's use as High, Medium, Low or Zero.
• Microsoft 365: the admin centre's Copilot usage report shows active users over the last 7, 28, 90 or 180 days.

Export the user-level data, replace names with roles if you'd rather not paste names into a chatbot, and ask an assistant to sort it:

Here is a usage export for our AI features, one row per user, with job
role, days active in the last 90 days and the apps they used AI in.
1. Group users by role and show median active days for each role.
2. List users with zero or near-zero use.
3. For each low-use user, say whether their role is likely to need the
   full desktop office apps, using only the role information given.
Do not recommend plan changes; just lay out the evidence.

An illustrative answer for a 14-person maintenance firm:

Office (5 users): median 41 active days; heavy use in Outlook and Word.
Field supervisors (2): median 9 days; use in Teams and Excel.
Field operatives (7): median 0 days; 6 of 7 show no AI use at all.
Desktop app need: office staff and supervisors likely; operatives'
roles (site work, mobile job sheets) suggest web and mobile only.

The summary is useful and one line is wrong. The assistant guessed that supervisors need desktop apps because they appear in Excel, but the usage report only covers AI activity. Whether someone needs installed Excel is a question for the person, not the report: the supervisors turned out to maintain a macro-driven job costing workbook that only runs in the desktop app. Treat the output as a shortlist to confirm, not a decision.

What a downgrade costs you besides the saving

Microsoft: mix plans, but know what Basic lacks

Microsoft lets you assign Business Basic to some users and Business Standard to others in the same organisation. The saving is $7 per user per month at the new prices. What Basic users lose: the installable desktop versions of Word, Excel, PowerPoint and Outlook, since Basic includes only the web and mobile versions. A less obvious loss is self-service password reset, which Microsoft reserves for Business Standard and above (or Entra ID P1 or P2). On Basic, every forgotten password becomes a job for whoever administers the account. If you're weighing the security side of plan choice too, Business Premium vs Standard for AI security covers the other direction.

Google: one edition for everyone, and a storage wall

Google's help page on switching to Business Starter is blunt: everyone in the organisation gets the same subscription. A downgrade is all or nothing. Business Starter gives 30 GB of pooled storage per licence, and Gemini on Starter is limited to Gmail and the Gemini app rather than working across Docs, Sheets, Meet and Drive. If a downgrade removes a feature such as data loss prevention or Vault, Google lets you restore it by upgrading again within 51 days.

A nine-user estate agency on Business Standard ran the storage check before downgrading. Starter would give 9 x 30 GB = 270 GB of pooled storage; the agency's Drive held 1.1 TB, mostly property photos and signed tenancy paperwork. Google's help says users don't lose data when over the limit, but they can't upload new files or create new documents. The $756 a year the downgrade would save ($7 x 9 x 12) wasn't worth an office that couldn't save a new listing. The agency kept Standard and turned to the question it could control: whether to drop a separate ChatGPT subscription now that Gemini was included. What Gemini includes on each Workspace plan lays out what each edition covers.

Standalone AI add-ons: cap or cut

Add-ons like Kajabi's Teaching Assistant are the easiest to act on because they're separate lines. At $79 per agent per month from 1 October 2026, with 1,000 messages included, the test is simple: divide the fee by the conversations that actually helped a student or customer last month. If one assistant answers 600 useful questions a month, that's about 13 cents each; if it answers 60, it's over $1.30 and a well-organised help page may do the job.

Switching suites: the migration bill behind a cheaper quote

Switching makes sense when a rival is meaningfully cheaper or better for the whole business, not as a protest at one rise. The numbers rarely support the protest. After their respective rises, Microsoft 365 Business Standard lists at $14 per user per month on an annual commitment and Google Workspace Business Standard at about $14 on an annual plan. Moving from one to the other to escape an AI price rise lands you on the same price.

The costs that don't appear on either quote:

• Overlap months. You pay both suites while mail, files and calendars move. An annual commitment on the old side can't be cut short, so time the switch to the renewal date.
• Migration labour. Mailboxes, shared drives, permissions and calendars, whether done by you or paid for.
• Broken links. Every shared document link in emails, your CRM and client portals points at the old system.
• Integrations. Accounting, CRM, e-signature and phone systems all need reconnecting and retesting.
• Retraining. Staff lose shortcuts and habits; expect slower weeks.

Here is how a switch to escape a rise can go wrong, using an illustrative six-person lettings office. It moved from Microsoft 365 to Google Workspace in mid-2026 to avoid Microsoft's $1.50 rise, worth $108 a year. The move took two weekends of the owner's time, a month of paying both suites, and weeks of tenants reporting dead links to inventory reports that had been shared from OneDrive. The new plan's list price matched the old one. Nothing was wrong with either suite; the switch simply had no saving to pay for its cost. A fuller comparison of the two suites' AI is in Google Workspace vs Microsoft 365 for AI.

A property maintenance firm works through the Microsoft rise

Consider a property maintenance firm with 14 Microsoft 365 users, all on Business Standard: five office staff (owner, two schedulers, an estimator and an accounts clerk), two field supervisors and seven field operatives who use Outlook and Teams on their phones and fill in job sheets in a separate field-service app. The business is illustrative; the prices are Microsoft's list prices on an annual commitment.

The usage check had already shown that six of the seven operatives never used the AI features and none of them needed desktop apps. The supervisors' costing workbook ruled out moving them. So the firm moved the seven operatives to Basic, saving $588 a year, which more than cancels the $252 rise and leaves the bill $336 lower than before it.

It priced the hidden cost too. Operatives on Basic can't reset their own passwords. The firm estimated one forgotten password a month at about 15 minutes of the office manager's time, three hours a year, and judged that acceptable. It also wrote the reset steps into its starter checklist so the job wouldn't depend on one person. Switching to Google was dismissed in a sentence: same list price, plus a migration.

The same exercise also answered a question the firm hadn't asked. With Copilot Chat included in every plan, the schedulers' separate chatbot subscriptions were overlapping with what they already had; what the free Copilot Chat covers compared with the paid licence is worth reading before renewing either.

Levers to pull before the new price lands

1. Use the renewal date. Rises tied to renewal give you months. An annual term renewed before the new price applies can hold the old price for another year; annual versus monthly billing covers when that commitment is worth making.
2. Ask your reseller about promotions and bundles. Microsoft's Copilot Business add-on lists at $21 per user per month on an annual commitment, with a promotional $18 from 1 July to 31 December 2026 for the first year. The Business Standard plus Copilot bundle at $23.50 costs less than Business Standard at $14 plus the add-on at $21 bought separately. Only worth it for people who'll use Copilot heavily, but cheaper if they will.
3. Check the usage-based settings on new licences. Microsoft has told its resellers that new Copilot Business licences bought through its Cloud Solution Provider programme from 2 November 2026 come with pay-as-you-go usage billing switched on by default for extras such as Copilot Cowork, with a preset monthly limit. Find out what that limit is and who can change it before anyone starts using the extras.
4. Cap standalone AI add-ons. Message allowances, agent counts and credit pools are all dials. A smaller allowance used fully beats a bigger one used lightly.
5. Write down the next review date. A price that rose once can rise again. The usage check above takes twenty minutes and is worth repeating before every renewal.

Last, a filled-in record of the decision helps when the next letter arrives. The estate agency's read:

Six rows, one page, and the reasoning is still there in a year when someone asks why the agency didn't move.

Further reads

• How to Audit Your AI Subscriptions and Cut Wasted Spend — A wider sweep for AI tools nobody opens any more.
• AI Software Contracts: Auto-Renewals, Price Rises, Notice Periods — The contract terms that decide when a rise can land.
• Is Microsoft 365 Copilot Worth It for a Small Business? — Whether the paid Copilot licence earns its place.
• Gemini or ChatGPT for a Google Workspace Business? — Whether Gemini can replace a separate ChatGPT bill.
• AI Features Already in Your Software: What to Switch On First — Which bundled AI features to switch on first.
• How to Read AI Software Pricing: Seats, Credits, and Usage Fees — Read seat, credit and usage pricing before the next rise.
• Per-Seat SaaS Fees vs One Custom Tool: Five-Year Costs Compared — Five-year costs of per-seat software against a custom AI tool, year by year, with a break-even seat count and the upkeep costs quotes leave out.
• How to Keep Up With AI in 30 Minutes a Week — A timed weekly routine for owners: scan your own tools' release notes, filter hard, test one change on real work, and log what you decide.
• Pet Grooming Software With AI: Features and Prices Compared — What the AI in MoeGo, Teddy, Groomify, DaySmart Pet and Gingr actually does, what each costs a year, and a 14-day trial script for groomers.
• Salon and Spa Software With Built-In AI: What to Compare — Five tests that separate useful salon and spa AI from a feature list, with September 2026 prices for Vagaro, GlossGenius, Boulevard, Mangomint and more.
• How Much Does It Cost to Add AI to a Shopify Store? — Adding AI to Shopify can cost $0 extra, or $35 to $500+ a month with apps. Itemised prices, three store budgets and the costs listings don't show.
• How Much Does AI Cost a Small Accounting Firm? — An itemised AI budget for three-, eight- and fifteen-person accounting firms: list prices, per-client costs, internal time and the hidden extras.
• AI Estimating Software for Small Builders: Six Options Compared — Six AI estimating options for small building firms compared on what the AI does, list price, best fit and the catch, plus a way to test them on a real job.
• Microsoft 365 Copilot Pricing: Business vs Enterprise Licences — Every Microsoft 365 Copilot price in one place, when the Business licence applies, and the add-on versus bundle sum that decides what a small business pays.
• Is Notion AI Worth It Now It Comes With Paid Plans? — What Notion AI includes since it moved into the Business plan, what it really costs your team, and a 30-day test to decide if it earns its place.
• Hidden Costs of AI Implementation Most Small Businesses Miss — The AI costs that never appear on a pricing page, a subscription box company's real first-year bill against the headline, and a cost sheet to copy.
• AI Tools and AI Development: The Complete 2026 Guide — the AI hub, including every tutorial in the AI-for-business series.

Sources: Google Workspace announcement on including Gemini in business plans (January 2025); Google Workspace help (switching to Business Starter, Gemini usage reports); Microsoft 365 business plan pages and Microsoft Learn; Microsoft's partner announcements (September 2026); Slack's June 2025 pricing announcement; Kajabi help centre; Zoom product pages. Checked September 2026.