Microsoft's November 2025 licensing changes mark a fundamental shift in how enterprise technology partnerships will be structured—and it's a catalyst for deeper strategic conversations.
On August 12, 2025, Microsoft announced a significant change to its Enterprise Agreement (EA) licensing model that takes effect November 1, 2025. Microsoft will standardize pricing for Online Services across all volume licensing programs, eliminating the traditional volume-based discount tiers that have defined enterprise software procurement for decades.
The End of Volume-Based Discounting
For years, Microsoft's EA pricing operated on a waterfall discount structure, with Price Levels A through D offering progressively deeper discounts based on user count. Volume customers typically received discounts of 6% to 12% on online services, with Level D customers (15,000+ users) enjoying automatic 12% discounts.
Starting November 1, all Online Services—including Microsoft 365, Dynamics 365, Windows 365, and security offerings—will be priced at Level A rates, matching Microsoft.com pricing regardless of organization size.
Financial Impact by Organization Size
The cost increase varies by current pricing tier:
- Level B customers (2,400-7,499 users): ~6% increase
- Level C customers (7,500-14,999 users): ~9% increase
- Level D customers (15,000+ users): ~12% increase
Important: Changes only apply at renewal or when adding new Online Services not already on your Customer Price Sheet after November 1, 2025. Mid-term EA customers retain current pricing until renewal.
The Strategic Opportunity
This change represents a fundamental shift from volume to value in technology partnerships. Microsoft is moving toward consumption and revenue-based negotiations, similar to Azure's model where discounts are tied to commitment and growth rather than volume.
As NexusTek's Chief Product Officer Jay Cuthrell recently told CNBC, "This Microsoft licensing change formalizes a wider market shift from volume to value. We see it as a positive catalyst. It elevates our client conversations beyond basic license counts and into higher value strategic planning."
This creates opportunities to move beyond license counting toward strategic technology planning that drives business outcomes:
- Digital transformation initiatives leveraging the full Microsoft ecosystem
- Productivity gains through advanced collaboration and automation
- Security improvements with integrated compliance and identity management
- Innovation acceleration through AI and analytics capabilities
Making the Most of These Changes
Negotiation Strategy
Large customers still have leverage—Microsoft doesn't want to lose big accounts. Success requires moving from price-focused to value-focused negotiations based on strategic commitments and growth plans.
Alternative Licensing Models
- Cloud Solution Provider (CSP): May now be more competitive with flattened EA pricing
- Microsoft Customer Agreement for Enterprise (MCA-E): Offers flexibility for consumption-based organizations
Action Steps for Your Organization
Immediate Actions:
- Audit current licensing to understand what's on your Customer Price Sheet
- Model financial impact and adjust budgets for next renewal
- Engage early with account teams and technology partners
Strategic Planning:
- Assess current usage across your Microsoft environment
- Develop future-state technology roadmap aligned with business objectives
- Calculate total economic impact beyond just licensing costs
- Explore alternative licensing models that might better fit your needs
The Bigger Picture
Microsoft's licensing evolution reflects a broader market transformation where technology partnerships focus on outcomes rather than inputs. Organizations that view this strategically—as an opportunity to elevate their technology planning—will maximize their return on investment.
The shift from volume to value isn't just about Microsoft licensing—it's about evolving how enterprises approach technology investment. Organizations that embrace this evolution will develop more sophisticated, results-oriented partnerships that drive real business value.
Next Steps
Navigating these changes requires both financial discipline and technical expertise. The right technology partner can help you understand the implications, model scenarios, and develop strategies that maximize your Microsoft investments while positioning your organization for growth.
The November 2025 changes mark the beginning of a new era in enterprise technology partnerships—one where strategic planning and business outcomes take precedence over volume calculations.
