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Microsoft Licensing Update January 2026: incl. D365 License Enforcement, Defender for O365 and more
Jeroen Hidding
Jeroen entered Microsoft Licensing in 2008 at a Global LSP. Jeroen is specialized in optimizing complex Microsoft licensing requirements from a commercial perspective.
Microsoft Licensing Update ... Microsoft Licensing Update January 2026: incl. D365 License Enforcement, Defender for O365 and more
Jeroen Hidding
Welcome to our first Microsoft licensing update of 2026
This edition highlights several important changes and reminders that may directly impact your environment in the coming months, including the start of Dynamics 365 license enforcement, updates around Security Copilot entitlements, Windows 365 developments, and clarifications in Defender for Office 365 licensing. As always, staying ahead of these changes is key to avoiding compliance risks and unexpected costs.
Reminder: Dynamics 365 license enforcement starts 15. January 2026
After a delay in November, Microsoft is officially introducing the license enforcement for all Dynamics F&O user licenses, starting January 15, 2026. Enforcement starts at your renewal date.
All users require to have the correct license assigned to them, if this is not the case, a user is not able to access the (non-licensed) application anymore.
Microsoft Security Copilot included in Microsoft 365 E5
Microsoft has once again created a new abbreviation: SCU.
Microsoft has started the roll out of Security Compute Unites (SCU) and these will become available for all customers that are licensed for the M365 E5 suite. As of November 18, 2025, if you are using Security Copilot you can already access this benefit. For every 1000 user licenses you will receive 400 SCU’s, up to 10.000 SCU’s per month. In fact, you will receive 1 SCU for every 2.5 M365 E5 user license.
Not yet started with Security Copilot? You will be included in the phased rollout, scheduled to continue until June 2026.
More on Security Compute Unit:
A Security Compute Unit is a unit measure of the compute power to run Security Copilot workloads – for AI capabilities within the standalone and embedded experiences.
Updates for Windows 365
Windows 365 Cloud Apps now generally available
Microsoft announced that Windows 365 Cloud Apps are now generally available. This Cloud App feature provides users access to individual apps instead of requiring a dedicated cloud PC for every user.
This functionality is included in the Windows 365 Frontline license, when used in shared mode. These licenses are not assigned to dedicated users, but can be assigned to groups of users who can dynamically work on a one-user-per-pc basis for the duration of their work.
Windows 365 Reserve
With Windows 365 Reserve users get instant access to a pre-configured Cloud PC when their primary device is unavailable, perhaps through theft or damage. Each Windows 365 user licenses gives access to 10 days of Cloud PC usage during the 1-year license term.
Do you want to test Windows 365 Frontline or Enterprise?
There is a promo (-20%) available until the end of April 2026.
Important updates for Defender for Office 365
There is frequent discussion about how Defender products are licensed. Although it is a user-based license, in many cases, tenant-wide licensing is advised.
Microsoft just updated the terms for Microsoft Defender for Office 365 to clarify its licensing requirements.
“A licence is required for any user or mailbox that benefits from Defender for Office 365 protections. This includes users accessing their own or shared protected mailboxes, anyone using SharePoint, OneDrive, or Teams with Safe Attachments enabled, and those using Microsoft 365 apps or Teams with Safe Links active.“
Although it’s possible to implement policies that restrict these features to specific users, the added wording to this update of the terms is a reminder to be cautious when licensing tenant-level services.
Reminder: Currently, Defender for Office 365 Plan 1 and Plan 2 are available in the M365 E5 suite or in the Defender suite.
Starting July 1, Defender for Office 365 Plan 1 will be included in the M365 E3 suite. If functionality of Plan 2 is required, a step-up license is available.
Product term updates
- Microsoft rebranded Azure AI Foundry to Microsoft Foundry in the different sections of the Product Terms.
- Microsoft Defender Experts added to the Product Terms. A customer must have Entra P1 or P2 for its users, plus the following prerequisites:
- The Defender Experts (for Hunting) – XDR can be used when a user is licensed for Defender for Endpoint P2. If you want to start with Defender Experts (for Hunting) for Servers Microsoft Defender for Endpoint P2 is required, plus Microsoft Defender Experts for Hunting and Microsoft Defender for Cloud Defender for Servers Plan 1 or Plan 2
- The Defender Experts Suite can be used when a user is licensed with M365 E5 or with a Defender Suite. The Defender Experts Suite (P1 or P2) has a minimum requirement of 1.500 licenses.
- Audio Services update: Microsoft added and clarified terms about the abilities that authorized carriers have like provision, add and remove telephone numbers. As well as that Microsoft does not control these actions.
Active promos
Windows 365
Available in EA and CSP:
Windows 365 Enterprise and Frontline promo – 20 % discount for all new customers for W365 subscriptions, available until 30-04-2026.
Microsoft 365 Copilot
- 15% discount for new customers
- Minimum 10 licenses, up to 2,400
- Ends 30 June 2026
Copilot Business Launch Promotions (through March 31, 2026 )
- 15% off Copilot Business (1–300 licenses)
- 35% off Business Standard + Copilot Business
- 25% off Business Premium + Copilot Business
ScaleUP Promotion
- 20% discount
- Minimum 100 seats
- Annual commitments only
The start of 2026 brings a renewed focus from Microsoft on enforcement, entitlement clarity, and consumption-based services.
With Dynamics 365 license enforcement going live, expanded use of tenant-wide security services, and new compute-based metrics like SCUs, it’s more important than ever to validate that licensing assignments and usage align with contract terms.
If you would like support reviewing your current setup, assessing eligibility for promotions, or preparing for upcoming enforcement dates, we recommend addressing this proactively rather than at renewal.
Reach out today for a licensing review or tailored advisory session.