Microsoft 365 June 2025 Update: Security, AI, and Collaboration Enhancements

As the digital landscape evolves at a relentless pace, keeping ahead of key developments in productivity and collaboration platforms is essential for organizations and individual users alike. Microsoft 365, a linchpin of modern workplaces, continues to receive impactful updates and policy changes, each with reverberations across security, user experience, and workflow efficiency. A close inspection of Microsoft’s June 2025 wave of feature enhancements and retirements reveals both valuable opportunities and potentially disruptive risks for users—and IT administrators—who rely on this platform daily.

Outlook’s Approach to Predictive Text: A Shift Toward User Autonomy​

One of the most prominent changes landing in July 2025 involves Microsoft Outlook’s Text Prediction feature, which has generated both enthusiasm and criticism since its initial rollout. Predictive typing, designed to speed up email composition and improve accuracy, will soon be turned off by default across all major Outlook experiences, including New Outlook for Windows, Outlook on the web, and Outlook mobile clients for iOS and Android.

Why Turn Off Text Prediction?​

While AI-driven autocomplete tools such as Text Prediction have been lauded for increasing productivity, they have also raised concerns about inadvertent errors, privacy, and the blurring of professional tone. By making the feature opt-in rather than automatic, Microsoft is signaling a commitment to user choice and a greater respect for individuals’ preferred communication styles.
For organizations with sensitive communications or strict compliance environments, this default-off stance is an advantage—it reduces the risk of unintended message completions and potential data exposure. However, for users who have integrated predictive typing into their daily workflow, it introduces an extra configuration step.

How to Manage the Change​

For those eager to keep leveraging the speed and intelligence of text prediction, the process to reactivate is straightforward:

• Outlook on the web: Settings → Mail → Compose and reply → Text predictions.
• New Outlook for Windows: Settings → Mail → Compose → Text predictions.
• Outlook mobile: Settings → Account → Compose options → Text predictions.

It’s worth noting that this feature toggle only affects the suggestion experience; no changes are being made to the core composition or sending workflow otherwise. Still, organizations should proactively notify end-users and update onboarding documentation to reduce confusion.

The Broader Impact​

Technical analysis reveals that disabling predictive text by default is unlikely to degrade overall productivity for most users, but it may frustrate frequent adopters or those with accessibility needs. Some may perceive it as a regression in Microsoft’s “cloud intelligence first” vision, though the change aligns with industry-wide moves to give users greater control over generative AI functions in productivity environments.

Outlook Tightens Security: Blocking .library-ms and .search-ms Attachments​

Security remains a top priority for Microsoft 365 administrators and end-users. In another important security-enhancing change, both Outlook on the web and the New Outlook for Windows are expanding their list of restricted file attachment types. Come July, two more file formats—.library-ms and .search-ms—will be blocked by default. These extensions, tied to Windows library and search functionality, are rarely used outside niche environments but have the potential to be leveraged in phishing or malware campaigns.

What’s Affected?​

• .library-ms: Represents Windows Libraries (virtual collections of folders and files).
• .search-ms: Stores saved Windows search queries.

Blocking these formats fits with Microsoft’s ongoing campaign to mitigate file-borne threats, which continue to be a top initial vector for attacks. It also aligns with best practices outlined by independent security advisory groups, which have urged the elimination of attachment types capable of triggering system-level operations or script execution.

Limited Flexibility: What If You Need These Files?​

For the rare user or team with legitimate business need to exchange these files, all is not lost. IT administrators can add exceptions to the global blocklist via the AllowedFileTypes property in Exchange mailbox policies—a process requiring careful review and ongoing risk monitoring.
Still, the forward march toward ever-stricter attachment filtering is clear, and organizations dependent on edge-case file types should be actively seeking alternatives or advocating for safe, sanctioned workflows.

SharePoint and OneDrive: Watermarking PDFs for Secure Collaboration​

Document security and intellectual property protection have taken on new relevance in the era of remote work and widespread data sharing. Recognizing this, Microsoft is delivering a highly requested capability: the ability to add customizable watermarks to PDFs from within OneDrive and SharePoint.

How the PDF Watermark Feature Works​

This update is more than a cosmetic tweak—users can apply both text and image watermarks with granular control over formatting, position (top, middle, bottom; left, center, right), transparency, and rotation. The watermark is embedded within the PDF, visible in all mainstream viewers, and—crucially—cannot be edited or removed except via OneDrive or SharePoint.

Adding and Removing Watermarks: Step-by-Step​

• Text Watermark: Open PDF in OneDrive/SharePoint → Edit → Watermark → Enter text & choose style/options → Preview → Apply.
• Image Watermark: Same initial steps, but select Picture in Watermark menu and upload or choose an image.
• Removal: Only possible through the same Microsoft interface. Third-party PDF editors cannot strip these watermarks once applied.

This feature strikes a careful balance between ease of use and security. It addresses compliance needs in industries like legal, finance, and research, making it much harder for unauthorized recipients to share “clean” versions of confidential or draft documents.

Critical Analysis​

Although the watermarking feature offers real protection against accidental leaks, it is important to clarify its limitations: persistent attackers can always use screen captures or OCR tools to circumvent such controls. Furthermore, as the watermark is only removable within the Microsoft cloud stack, organizations must ensure that critical documents remain accessible to authorized editors and do not accidentally become irreversibly locked.

Microsoft Teams: Enhanced Meeting Flows with the Green Room Promotion​

Meetings—in all their forms—are at the heart of remote and hybrid team collaboration. Microsoft Teams, facing fierce competition from Zoom and Google Meet, is investing heavily in improving structured meeting formats such as webinars, virtual town halls, and large conferences.
This month’s update introduces the ability for presenters to promote attendees directly from the waiting room to the “green room” via the Participants roster. The green room acts as a backstage area for preparation, private presenter discussions, and technical checks before the broadcast starts.

Why It Matters​

Previously, green room access management in Teams was less flexible, generally only supporting predefined presenters and making last-minute planning more cumbersome. With direct attendee promotion, event organizers gain fine-grained control over who moves from the public lobby, to backstage, and finally onstage.
The feature is cross-platform, supporting Windows, Mac, and web clients. This enhancement should streamline event workflows, reduce technical hiccups when going live, and improve the attendee onboarding experience for large, structured events.

Microsoft 365 Copilot: AI-Powered Image Generation Arrives​

The wave of artificial intelligence in productivity tools is typified by Microsoft 365 Copilot, the suite’s AI assistant for writing, analytics, and creative brainstorming. In July 2025, the Copilot ecosystem will expand further with the debut of image generation features.

Bringing Image Creation Into the Productivity Fold​

For the first time, users will be able to craft high-resolution, contextually relevant images directly within their Microsoft 365 apps—without the need for a third-party graphics tool. This holds promise for marketers, educators, and knowledge workers looking to enrich content with last-minute visuals for presentations, reports, or emails.

Licensing and Availability​

A full Copilot license unlocks unrestricted access to these image-generation capabilities. Some commercial subscribers may also see partial functionality based on their app context and subscription tier, but details on the precise limitations remain somewhat unclear as of publication. Given the rapid evolution of AI licensing and integration, prospective users are advised to consult the most current Microsoft documentation.

Risks and Considerations​

The power to create images “on demand” also raises questions about copyright compliance, ethical use, and the potential for AI-generated misinformation. Microsoft is working to address these risks by watermarking AI-generated media and providing granular admin controls. However, organizations deploying Copilot AI image features should set clear usage policies and train users accordingly.

Teams Channels to Embrace Modern Threaded Conversations​

Coming in August, Microsoft Teams will roll out a new conversation layout for channels, featuring robust threading support. This long-awaited improvement brings Teams closer in line with rivals like Slack, which has long offered conversation threading as a way to keep discussions organized.

How Threaded Conversations Improve Collaboration​

• Clarity: Users can reply to a specific message in a side thread, preventing main channel conversations from devolving into confusion.
• Focus: Multiple topics can be conducted in parallel without burying key points.
• Retention: It is easier to follow or revisit particular topics.

The update is slated to arrive on all Teams platforms, including desktop, web, and mobile, and is expected to dramatically upgrade the experience for distributed teams and large organizations.

Challenges and Early Feedback​

The introduction of true message threading may require a mindset shift for veteran Teams users accustomed to “flat” conversation layouts. Organizations should prepare training resources and update meeting structures. Feedback from early adopters on other platforms suggests that, while threading increases order, it can also encourage excessive branching, potentially fragmenting discussions if not managed well.

Major Product Retirements: Navigating the Project and Lists Sunset​

Feature parity, consolidation, and modernization are natural parts of any mature cloud platform. Several significant product retirements are on the near horizon for Microsoft 365 users:

Microsoft Project for the Web and Project in Teams: End of Life​

August 2025 will see the formal end of Project for the web and Project in Teams. In their place, organizations will be nudged toward the next-generation Planner for both web and Teams.

Key Changes​

• All new project and roadmap tabs will redirect to the revamped Planner.
• Users must re-pin or recreate tabs within Teams.
• Roadmap functionality is subsumed under “Portfolios” in Planner.

Former Project for Windows users are advised to migrate ongoing projects using the official Project Power App, while critical Roadmap data should be transferred to ensure continuity of operations.

Assessing the Migration Path​

Microsoft's decision to unify project management capabilities under Planner promises a simpler, more flexible, and more integrated user experience. The revamped Planner is reportedly receiving several advanced features previously exclusive to Project, though some users have voiced concern about the timeline and completeness of feature migration. Organizations relying on bespoke Project workflows will need to conduct rigorous pilot testing ahead of the transition window to spot gaps and streamline migration.

Microsoft Lists Mobile Apps Reach End of Support​

In another consolidation move, Microsoft will retire the Lists mobile apps for iOS and Android by November 2025. Instead, users are being directed to the mobile web browser experience, with app store removal and new install blocks staged over several months.

• June 2025: Notification banner for existing users.
• September 2025: New installations disabled.
• November 2025: Complete app removal.

Data is not at risk, as users retain full access via browser or desktop; but power users may miss features unique to the dedicated apps such as offline support or deep OS integration.

What It Means for Users​

This retirement is in line with Microsoft’s broader strategy to reduce the surface area for app vulnerabilities and streamline development. While most users will transition smoothly to the browser experience, organizations should audit critical dependencies and prepare for disruptions in workflows involving mobile data capture or remote field use.

Taking Stock: Strengths and Risks of June 2025 Microsoft 365 Updates​

These updates deliver several clear strengths to Microsoft’s productivity ecosystem:

• Security: Expanded attachment restrictions, robust PDF watermarking, and backstage management in Teams reduce the risk surface for attacks and data leaks.
• Control & Choice: Default-off AI features and clear admin controls empower users and IT to shape their own workflows.
• Innovation: AI image generation and threaded Teams conversations represent tangible leaps in user experience and creativity.
• Consolidation: Migrating to a single, powerful Planner and focusing on browser-driven mobile experiences reduces fragmentation and futureproofs the platform.

Yet, these strengths are accompanied by measurable risks:

• Disruption: Users often resist dramatic workflow changes; proper change management and training are essential for adoption.
• Feature Gaps: The transition to Planner may leave some advanced Project fans underserved, at least initially.
• AI-Driven Uncertainty: Image generation, while powerful, carries misuse potential and unresolved legal questions.
• Reduced Optionality: The retirement of mobile Lists eliminates a favored productivity tool for on-the-go users in certain industries.

Preparing for the Future​

As with so many cloud-first tools, the defining skill for modern Microsoft 365 customers is adaptability. Organizations and individuals alike should take this new wave of updates as a prompt to:

• Review key workflows, identifying areas impacted by feature retirements or new defaults.
• Brief staff on security policy changes and new capabilities.
• Engage IT teams early to test migrations, set business-appropriate defaults, and document any exceptions or required retraining.
• Monitor Microsoft’s official roadmap and community forums for last-minute changes, emerging issues, or undocumented behaviors.

Conclusion​

June 2025’s updates to Microsoft 365 underscore a clear direction: tighter security, greater user control, deeper AI integration, and rationalized app portfolios. While the changes create new opportunities for efficiency and creativity, they also demand a proactive approach to change management and a willingness to embrace new models of collaboration and content creation. For power users and IT professionals alike, keeping pace with these shifts isn’t just about staying current—it’s a competitive necessity in an increasingly digital workplace.

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Source: Seton Hall University What's New in Microsoft 365 — June 2025