Microsoft July 1, 2025: New Retirements, Major Changes, and End-of-Support Headaches Loom for Users

July 1, 2025, marks a pivotal moment for Microsoft customers and IT professionals. A sweeping wave of changes is transforming the Microsoft product landscape, from core collaboration tools and enterprise infrastructure to cloud services, hardware, and nonprofit licensing. This article provides a detailed, up-to-date overview of every significant update, retirement, and new feature taking effect as of July 1, 2025, along with actionable guidance for organizations and individuals.

Major Product Changes, Retirements, and New Features

1. Microsoft Teams Classic Officially Retired

Overview:
Microsoft Teams, the cornerstone of digital collaboration for millions worldwide, is undergoing a fundamental transition. As of July 1, 2025, the classic Teams desktop application is officially retired and no longer accessible. All users must now use the updated Teams client, which has been available in preview since late 2024.

Key Changes:

• End of Support: The classic Teams app will receive no further updates, security patches, or technical support. Organizations still running the legacy version risk security vulnerabilities and compatibility issues.

• Mandatory Upgrade: Users are prompted within the app to upgrade to the new Teams client. IT administrators must ensure all endpoints are updated to avoid disruptions.

• Enhanced Features: The new Teams client offers faster performance, lower memory usage, and improved reliability. New features include advanced meeting tools, deeper AI integration with Copilot, and multi-account support for users managing multiple organizations.

• Web Access: Teams remains accessible via supported web browsers, but the new desktop client is recommended for the full experience.

Impact:
Businesses must act swiftly to migrate to the new Teams client. IT teams should communicate the change to employees and provide support for a smooth transition.

2. Windows Server 2025: Hotpatching Goes Generally Available

Overview:
Windows Server 2025 introduces hotpatching as a generally available feature starting July 1, 2025. This innovation allows IT administrators to apply security updates and patches without rebooting servers, minimizing downtime and reducing exposure to vulnerabilities.

Key Changes:

• No Reboots Required: Hotpatching enables live updates to running servers, a boon for mission-critical environments.

• Availability: The feature is available for both Standard and Datacenter editions of Windows Server 2025, accessible via Azure Arc.

• Pricing: Subscription pricing starts at $1.50 per CPU core per month. Administrators can preview hotpatching for free before launch.

• Azure Arc Integration: Previously exclusive to Azure, hotpatching now extends to on-premises and hybrid environments managed through Azure Arc.

Impact:
Organizations can maintain higher uptime and strengthen security postures by adopting hotpatching. IT teams should evaluate their server environments and plan for adoption.

3. Licensing and Pricing Updates for On-Premises Server Products

Overview:
Microsoft is rolling out significant licensing and pricing changes for its on-premises server products, effective July 1, 2025. These changes affect how organizations purchase and manage server software.

Key Changes:

• New Subscription Editions: Exchange Server Subscription Edition and Skype for Business Server Subscription Edition are now available, providing ongoing support for organizations that require on-premises solutions.

• Licensing Requirements: Customers must have active Software Assurance or cloud subscription licenses to deploy these subscription editions.

• Pricing Adjustments: Standalone server product pricing is increased by 10% for SharePoint Server, Exchange Server, and Skype for Business Server. Core CAL Suite and Enterprise CAL Suite prices will increase by 15% and 20%, respectively, effective August 1, 2025.

• Continued Support: These changes reflect Microsoft’s commitment to supporting on-premises deployments while encouraging cloud adoption.

Impact:
IT departments must review their licensing agreements and ensure compliance with the new requirements. Organizations relying on on-premises solutions should plan for potential cost adjustments.

4. Azure AD Graph API Fully Retired

Overview:
Microsoft is completing its long-announced retirement of the Azure AD Graph API on July 1, 2025. All API requests to Azure AD Graph will cease to function, requiring organizations to migrate to Microsoft Graph API.

Key Changes:

• End of Service: Azure AD Graph API is no longer available. Applications and integrations relying on this API will stop working.

• Migration Required: Organizations must update their applications to use Microsoft Graph API, which offers broader functionality and better security.

• Support Resources: Microsoft provides documentation, migration tools, and support to help organizations transition smoothly.

Impact:
IT teams must audit their applications and integrations, update code, and test new implementations to avoid disruptions in authentication and data flows.

5. Nonprofit Grants for Microsoft 365 Business Premium and Office 365 E1 Discontinued

Overview:
Microsoft is ending its nonprofit grant program for Microsoft 365 Business Premium and Office 365 E1 licenses, effective July 1, 2025. This change affects hundreds of thousands of nonprofit organizations globally.

Key Changes:

• Grant Discontinuation: Free grants for these licenses are no longer available. Nonprofits must purchase licenses or seek alternative funding.

• Affected Organizations: Approximately 400,000 nonprofits rely on these grants. Microsoft encourages organizations to explore other licensing options or discounted programs.

• Transition Support: Microsoft is providing guidance and resources to help nonprofits transition to paid licenses.

Impact:
Nonprofit organizations must budget for new licensing costs and explore alternative solutions to maintain productivity and collaboration.

6. Surface and AI: New Devices and Breakthroughs

Overview:
July 1, 2025, also brings exciting news for Microsoft hardware and AI enthusiasts. New Surface devices and AI advancements are making headlines.

Key Changes:

• New Surface Pro and Laptop: Microsoft launches the AI-powered Surface Pro (12-inch) and Surface Laptop (13-inch) in Thailand, with pre-orders starting July 1, 2025. These devices feature enhanced AI capabilities, improved performance, and sleek designs.

• AI Diagnostic System: Microsoft announces a new AI system that outperforms doctors in complex medical diagnoses, showcasing the potential of AI in healthcare and other industries.

Impact:
Consumers and professionals can look forward to cutting-edge hardware and AI innovations. These developments highlight Microsoft’s commitment to integrating AI across its product ecosystem.

7. Microsoft Authenticator App Updates

Overview:
Microsoft is streamlining its Authenticator app by removing password management features, starting in July 20253.

Key Changes:

• Autofill Disabled: The autofill feature in Authenticator stops working in July 2025.

• Password Removal: Password access will be fully removed in August 2025.

• Alternative Solutions: Users are encouraged to adopt alternative password management tools.

Impact:
Organizations and individuals relying on Authenticator for password management must transition to other solutions to avoid disruptions.

Additional Microsoft 365 and Cloud Security Updates

Overview:
July 2025 brings a host of new features and security enhancements to Microsoft 365 and related cloud services.

Key Changes:

• Azure AD PowerShell Retirement: Azure AD PowerShell is officially retired as of July 1, 2025. Organizations must transition scripts to Microsoft Graph SDK or Microsoft En PowerShell module.

• Admin Consent for Third-Party Apps: Microsoft is enhancing security by disabling legacy authentication and mandating admin approval for third-party applications by default.

• Drag & Drop in New Outlook: The new Outlook for Windows now allows users to drag and drop emails and files between personal, business, and shared mailboxes, significantly enhancing productivity.

• Native Forms in SharePoint: SharePoint document libraries now support native forms for direct file uploads and custom metadata entry.

• Microsoft Purview Compliance Portal: Admins can now scan existing files in SharePoint and OneDrive for sensitive information, improving data classification and labeling.

• Microsoft 365 Backup: Admins can now delete backup units at the individual level (e.g., OneDrive, SharePoint site, mailbox) to manage storage costs and comply with GDPR deletion requests.

• Teams External File Attachments: Teams now allows file attachments in external group chats, disabled by default but can be enabled by admins.

• Detailed Audit Logs in Teams: New audit logs for “Give Control,” “Take Control,” and “Screen” activities enhance accountability.

• Facilitator Agent in Teams: A new agent automates note-taking and summarization during meetings and chats (requires Copilot license).

• Multi-Admin Notifications for Backup: Microsoft 365 Backup now features multi-admin notifications for critical backup events.

• Data Security Posture Management: Microsoft Purview introduces a dedicated AI page to help organizations discover and secure AI activities across Copilot and other AI applications.

• Teams Live Assistance Program: Previously free, this program is now a paid service requiring a Unified contract.

• Insider Risk Management: The active policy limit increases to 100, allowing more flexible policy creation.

• Blocked File Types in Outlook: The library-ms and .search file types are now blocked by default in Outlook on the web and new Outlook for Windows.

• Guest Sign-In Experience: B2B users in Microsoft Entra ID are redirected to their home organization’s sign-in page for improved clarity.

• Unified Management Pause: Unified management for Outlook and Microsoft 365 apps is paused, with updates expected by late July 2025.

• MX Record Transition: New accepted domains will use mx subdomains to support DNSSEC. Admins with MX record automation must update configurations.

• SharePoint OTP Changes: External users lose access to SharePoint shared via Time Passcode (OTP) prior to integration with other services. Content must be reshared to restore access.

• Modern Authentication for Teams Android: Certified Teams Android devices shift to Modern Authentication for enhanced security on July 31, 2025.

• Graph Beta Device Endpoints: The Graph Beta /device endpoints will require ManagementScripts.All or ManagementScriptsWrite.All permissions starting July 31, 2025.

Impact:
Organizations must review and update their IT policies, scripts, and configurations to ensure continued security, compliance, and productivity.

End of Support and Retirement of Additional Microsoft Products

Overview:
July 1, 2025, is part of a broader wave of Microsoft product retirements and end-of-support milestones throughout the year. While not all retirements occur on this exact date, the trend is clear: Microsoft is accelerating its modernization efforts across its portfolio.

Key Changes:

• Azure and Cloud Services: Numerous Azure services and features are being retired throughout 2025, including SAP HANA Large Instances (June 30), Azure Database for MariaDB (September 19), and Azure Basic Load Balancer (September 30).

• Windows 10 and 11: Windows 10 reaches end of support on October 14, 2025, for all editions. Windows 11 also sees version-specific end-of-support milestones later in the year.

• Office and Productivity Tools: Office 2016, Office 2019, Exchange Server 2016, and Exchange Server 2019 reach end of support on October 14, 2025.

• Extended Support: Several products, including SQL Server 2019, move to Extended Support, which includes security updates but no new features.

Impact:
Organizations must plan for these retirements and end-of-support events, upgrading or migrating to supported versions to maintain security and compliance.

Navigating Microsoft’s July 2025 Changes

July 1, 2025, is a landmark date for Microsoft customers. From the retirement of Teams Classic and Azure AD Graph API to the launch of hotpatching for Windows Server 2025, new Surface devices, and sweeping changes to nonprofit licensing and Microsoft 365 features, these updates reflect Microsoft’s ongoing evolution and commitment to innovation.

Action Steps for Organizations:

• Upgrade to the new Teams client.

• Adopt hotpatching for Windows Server 2025.

• Review and update server licensing agreements.

• Migrate from Azure AD Graph API to Microsoft Graph API.

• Prepare for changes to nonprofit licensing grants.

• Transition password management away from Authenticator.

• Explore new Surface and AI offerings.

• Update IT policies, scripts, and configurations for new Microsoft 365 and cloud security features.

• Plan for upcoming end-of-support and retirement events for other Microsoft products.

By staying informed and proactive, organizations can leverage these changes to enhance security, productivity, and innovation in the Microsoft ecosystem.