Microsoft's Changing the EA Rules: What It Means for Your Organisation
Nov 4, 2025
Douglas Aguiar and Laura Dillon
Microsoft EA Pricing Changes: What You Need to Know
Starting 1st November 2025, Microsoft is simplifying Enterprise Agreement pricing for online services. Here's what's changing and how to prepare.
The Essential Details
On 12th August 2025, Microsoft announced significant changes to Enterprise Agreement licensing. The impact of these changes came into effect from 1st November 2025, automatic volume discounts (pricing Levels B-D) for online services will be eliminated across Enterprise Agreements (EA), Microsoft Products and Services Agreement (MPSA), and Online Services Premium Agreement (OSPA).
All customers will pay Level A list pricing—the same rates published on Microsoft.com—regardless of organisation size or purchase volume.
This affects Microsoft 365, Dynamics 365, Windows 365, Azure, GitHub, and security/compliance/identity products purchased through these agreements. On-premises software pricing remains unchanged.
Who This Affects
Commercial and government EA customers will see the change at their next renewal after 1st November, or when adding new online services after that date.
U.S. Federal, state/local government, and Education customers are not affected by this change.
Your existing agreement maintains current pricing until renewal. Any new services added after 1st November will use Level A pricing.
Understanding the Financial Impact
The Old Tiered Pricing System
Previously, EA pricing was split into four levels:
Level A: 500-2,399 users (base pricing)
Level B: 2,400-5,999 users (about 6-7% discount)
Level C: 6,000-14,999 users (about 14% discount)
Level D: 15,000+ users (12-21% discount)
The more you bought, the cheaper each license became, no negotiation necessary.
The New Model: One Price for All
Everyone pays the same base price for online services, no matter their size
Pricing matches what’s listed on Microsoft.com (Level A pricing)
Volume discount tiers (B, C, D) are going away
Automatic discounts disappear, so larger organizations will see costs increase
Level A customers (500-2,399 users) won't see immediate changes, as they already pay base pricing.
Why Microsoft Made This Change
Microsoft positions this as bringing consistency and transparency to online services pricing. It aligns EA pricing with other licensing models and reflects the industry's broader shift away from traditional volume discounting in cloud services.
The change also creates clearer pricing across Microsoft's portfolio whilst encouraging adoption of strategic cloud offerings like Azure, Microsoft 365 E5, Copilot, and Power Platform. This update is the latest phase of Microsoft’s multi-year pricing simplification strategy, which has included:
Removing Azure price level discounts (2017)
Eliminating Level A discounts (2018)
Introducing a single starting price for new Online Services (2023)
Microsoft says the goal is to “align with the industry standard approach to cloud services pricing” and allow partners to focus on value-added services instead of explaining complex price structures.
Microsoft calls it simplification, but it’s really a major change in how pricing, deals, and partner value now work.
What CSP Means in This New Landscape
One of the most significant outcomes of this change is that Cloud Solution Provider (CSP) models now stand on equal footing with EA in terms of core pricing. This means that partners can position CSP as a viable alternative for organisations of all sizes, not just SMB, and emphasise the flexibility and service choice that comes with it.
CSP offers monthly or annual billing with flexibility to adjust as needs change. There's no three-year commitment, making it suitable for organisations with changing headcount or evolving requirements. For many mid-sized organisations especially, CSP has become a genuine alternative worth evaluating.
The question shifts from "which is cheaper?" to "which model fits our business better?"
Your Options Moving Forward
Review your current position. Understand where you sit today—your pricing tier, what you're actually using, and when your renewal falls. If it's after November, you'll be affected.
Model the scenarios. Calculate the impact under new pricing. Compare EA renewal terms against CSP or hybrid models. Factor in your actual usage patterns and growth plans.
Consider timing strategically. Some organisations may benefit from early renewal to lock in current pricing for another three years. Others might find better value exploring alternative models now that pricing parity exists.
Optimise your licensing. Most organisations carry 15-25% unused or poorly assigned licences. Identifying and eliminating this waste often offsets much of any price increase.
Negotiate where it matters. Whilst automatic discounts are gone, custom terms remain possible—particularly for organisations committing to broader Microsoft cloud adoption or multi-year agreements. The key is understanding what Microsoft values and structuring discussions accordingly.
Where Expert Guidance Helps
Microsoft licensing has always been complex. These changes make strategic planning more important than ever.
At DreamDev, we've helped organisations navigate these decisions by:
Providing market context. When you negotiate alone, you don't know what's reasonable. We work across multiple clients and understand typical terms, achievable discounts, and market rates.
Modelling realistic scenarios. We assess your current state, usage patterns, and business plans to model EA renewal, CSP migration, or hybrid approaches—then help you understand which makes most sense for your situation.
Handling the complexity. Your leadership team shouldn't spend weeks decoding licensing terms. We manage the process whilst you focus on your business.
Optimising your estate. We identify unused licences, misallocated SKUs, and services you're paying for but not using. This typically uncovers significant savings that offset price changes.
Supporting transitions when needed. If CSP or a hybrid model is right for you, we handle the migration complexity without disrupting operations.
Looking Ahead /Next Steps
These changes reflect how enterprise software licensing is evolving. Regular reviews, usage-based models, and strategic alignment are becoming the norm rather than the exception.
Organisations that approach this strategically—understanding their options, optimising their estate, and making informed decisions—often find they maintain or improve value despite pricing change
If your EA renewal is approaching:
Understand your timeline - when does your current agreement end?
Assess the impact - what will you pay under the new model?
Review actual usage - are you paying for services you don't use?
Explore alternatives - could CSP or hybrid models work better?
Plan ahead - waiting until renewal gives you no negotiating room
This isn't about managing a Microsoft price increase. It's about ensuring your licensing supports your business effectively and cost-efficiently.
We're Here to Help
We've helped dozens of organisations navigate Microsoft licensing changes, optimise their estates, and make informed decisions about the right licensing model for their needs.
If you'd like a straightforward conversation about your situation - no pressure, no sales pitch, we're happy to help you think through your options.
Need help making sense of your Microsoft licensing? Get in touch for a no-obligation conversation
