Microsoft Licensing Changes November 2025 Explained

On August 12, 2025, Microsoft has a significant change to its Enterprise Agreement (EA) licensing structure — effective November 1, 2025, automatic price level discounts for Online Services (Levels B–D) under EA, OSPA, and MPSA agreements will be eliminated. All eligible customers will pay the Level A list price, regardless of size or prior spend. This shift represents one of the most significant licensing changes in recent years and will impact the budgets and procurement strategies of thousands of organizations. Effectively, Microsoft Ends EA Volume Discounts:

What’s Changing?

• No More Automatic Discount Tiers: Microsoft is ending volume-based pricing bands (Levels B–D) for Online Services including Microsoft 365, Dynamics 365, Windows 365, Azure, GitHub, and security/compliance/identity products. Everyone moves to Level A pricing — the public list price published on Microsoft.com.
• Who is Affected? All commercial and government Enterprise Agreement customers (except U.S. Federal, state/local government, and Education). This does not impact your on-premises software or Azure purchased via EA.
• Timing: Discount bands disappear at renewal after November 1, or whenever you purchase new Online Services after that date. Pricing for products already on your Customer Price Sheet remains unchanged until renewal or new additions.

What Does It Mean To You?

• Current EA Agreements: Pricing for products on your Customer Price Sheet today is fixed until the agreement’s natural expiry/renewal. Any new services added after November 1 are priced at Level A, regardless of historical discount band.
• Financial Impact: Level D customers (the largest organizations) will see up to a 12.83% cost increase. For a $30 million annual EA, that’s an extra $3.85 million/year — or $11.5 million over a three-year term for the same products and quantities. Calling this “pricing consistency” hides a major price hike for top-tier clients.
• Microsoft’s Motivation: Many see this as a test of how far Microsoft can push cloud pricing while accelerating adoption of strategic offerings like Azure, M365 E5, Copilot, Viva, and Power Platform. As the cloud industry standardizes pricing, discounts for scale disappear.
• Renewal and Negotiation: Your account manager or director may advocate on your behalf, but true discount authority now resides with your CPS partner and Microsoft reps. Any significant concessions (“discounts”) will likely come with strings attached — such as accelerated adoption of Microsoft’s strategic cloud products.

Key Takeaways

• Review your current licensing agreements, assess budget impact, and begin conversations with senior Microsoft stakeholders. Strategic alignment and forward planning are now essential to control costs.
• All EA customers lose automatic volume discounts for Online Services after November 1, 2025.
• Large organizations could face millions in additional costs upon renewal.
• Negotiated discounts may be possible but likely require broader cloud adoption or other commitments.
• Review, plan, and engage senior Microsoft leadership well ahead of renewal.

References

1. Microsoft Is Dropping EA Volume Discounts Starting in November 2025  – Directions on Microsoft
2. Microsoft’s November licensing shift: What it means for EA customers
3. Microsoft Price Level Changes for Online Services
4. Preparing for Microsoft Volume Licensing Price Level Changes
5. Microsoft Is Dropping EA Volume Discounts Starting in November 2025
6. Microsoft is removing EA volume discounts – what you need to know
7. Microsoft EA Price Level Changes in 2025 – Level B, C, and D
8. Microsoft’s pricing update: what November 2025 means for your business
9. Microsoft Volume Licensing Discounts Changes 2025 – BCN
10. Microsoft To End Certain Volume-Licensing Discounts In Potential CSP Boost

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