Microsoft just made a big announcement that will affect Online Services purchased through volume licensing programs. Starting November 1, 2025, Microsoft will move to further standardize its pricing approach for Online Services, adjusting prices to be the same for everyone.
This means that whether you're a large corporation benefiting from steep volume discounts or a mid-sized business with more limited purchasing power, the pricing for Microsoft’s Online Services will become uniform. In short, volume discounts for enterprise Online Services will be phased out under these licensing agreements.
What you need to know
In recent years, Microsoft has made strides toward simplifying and unifying its pricing across markets. This latest update marks a significant step in that direction.
Starting November 1, 2025, Microsoft will expand its set of products that are priced the same across enterprise customers regardless of deal size, region, or purchase volume. This change will apply to all Microsoft Online Services purchased under the following licensing agreements:
- Enterprise Agreement (EA)
- Including the Online Services Premium Agreement (OSPA), which is a licensing program unique to China
- Microsoft Products and Services Agreement (MPSA)
Under the new policy, Price Levels A through D which currently correspond to different levels of volume discounts will be eliminated for Online Services. Instead, all organizations purchasing Online Services under these agreements will pay the same list price.
Microsoft’s stated goal is to ensure pricing consistency, transparency, and global fairness, while aligning the enterprise pricing model with publicly visible pricing structures (such as the Microsoft website).
How this might affect your business
For organizations that currently benefit from volume discounts, this change could have a significant financial impact.
If you’re an enterprise or SMB (small-to-medium-sized business) currently subscribing to services like Microsoft 365 or Dynamics 365 through an EA or MPSA with discounted rates, those discounts will no longer apply for new purchases or renewals made after November 1, 2025.
Key implications include:
- Increased Costs: Businesses with previously negotiated discounts may see a noticeable increase in licensing costs especially at renewal.
- Budget Re-Evaluation: Organizations will need to reassess their IT budgets and forecast costs for future license renewals and service expansions.
- Renewal Timing Matters: If your contract renews before November 1, 2025, your current discount structure may still apply but any new purchases or renewals after that date will follow the new pricing structure.
- Loss of Negotiation Leverage: Volume-based price negotiations, which have long been a staple of enterprise licensing deals, will no longer be a factor in Microsoft’s pricing model for Online Services.
On the flip side, new customers and smaller enterprises may benefit from this pricing overhaul. Standardized pricing helps level the playing field, ensuring that newer entrants don’t face significantly higher costs than large, established clients.
Who Is Affected?
This pricing update specifically applies to enterprise customers worldwide under EA and MPSA licensing agreements. However, it's important to understand who is not affected:
- Government organizations using government-specific licensing programs
- Educational institutions under education-focused agreements
- On-premises software purchases, such as traditional licenses for Windows Server or SQL Server, which are not impacted by this update
If you operate in the public sector or education space, your pricing models will remain unchanged for now. Likewise, any reliance your business still has on on-premises software will not see price changes due to this specific update.
What’s not changing
While this pricing overhaul is significant, there are some important constants:
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On-Premises Software Pricing:
Remains unchanged. The new pricing model only impacts Online Services (i.e., cloud-based services).
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Government and Education Pricing:
These sectors are explicitly excluded from this update.
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Cloud Solution Provider (CSP) Program:
Microsoft has not announced changes to pricing through CSP channels in this update. If you purchase Microsoft cloud services through CSPs like Zones, talk to your account team to understand whether and how this might affect you.
Get help navigating Microsoft’s new pricing changes
Change can be disruptive, but with the right planning and guidance, your business can adapt and even thrive under the new pricing structure.
At Zones, our team of Microsoft licensing experts is ready to help you understand the financial and operational impact of these changes. Here’s how we can support you:
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Review Your Renewals
We’ll help you identify all upcoming contract renewals and evaluate whether it’s financially advantageous to renew before the November 1 deadline. Early renewals may lock in your current pricing for another term.
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Plan Future Purchases
If you’re considering adding users, expanding your Microsoft 365 footprint, or purchasing new Dynamics 365 modules, we’ll help you strategize the timing and contract terms to minimize cost exposure.
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Understand the Budget Impact
We’ll analyze your current license usage, determine which services are actively being used, and identify potential areas to consolidate or optimize ensuring you only pay for what you truly need under the new model.
Act Now: Don’t Wait Until November
Time is of the essence. With only a few months remaining before Microsoft’s new pricing policy goes into effect, it’s critical to take a proactive approach:
- Reach out to your Zones account team today
- Schedule a licensing review session
- Prepare a budget impact analysis
- Consider early renewal strategies
Our team can walk you through your current licensing landscape and help build a roadmap that aligns with your business goals, budget, and Microsoft’s new pricing structure.
Stay ahead of the change. Contact Zones today and take control of your Microsoft Online Services strategy before the November 1 deadline.
Zones : Dec 8, 2023 2:05:27 PM
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