Microsoft has confirmed a major change to its pricing models that will affect nearly every customer worldwide. Starting November 1, 2025, organizations purchasing through the Enterprise Agreement (EA), Enterprise Agreement Subscription (EAS), Microsoft Product & Services Agreement (MPSA) or Online Services Premium Agreement (OSPA – unique to China) will no longer receive volume-based price level discounts for Online Services.

What Is Changing?

Currently, Microsoft applies automatic discounts based on the number of users or devices under agreement:

• Level A (500–2,399) → ~3% discount
• Level B (2,400–5,999) → ~6% discount
• Level C (6,000–14,999) → ~9% discount
• Level D (15,000+) → ~12% discount

From November 2025, these discounts will disappear. Almost all customers, including commercial organizations and government, will be moved to a standard Level A equivalent price list by default, regardless of size or prior pricing level.

⚠️ Effective November 1, 2025, all Microsoft Online Services under EA, EAS, OSPA and MPSA will move to a standard Level A equivalent price list – with very limited exceptions.

Who Will Be Affected?

• Included: All commercial and government customers globally
• Exempt:
  • On-premises software (Windows Server, SQL Server, System Center, etc.)
  • U.S. Government and Education customers worldwide
• Not Exempt: U.K. Government

While on-premises licenses remain unaffected, Microsoft’s cloud-first strategy means most organizations will see higher costs at renewal, especially where Online Services represent a large share of spend.

Why It Matters

For enterprises currently benefitting from Level C or D discounts, this shift could add millions in additional spend over the next contract cycle. Even mid-sized customers that previously qualified beyond Level A will face meaningful cost increases.

This is one of the most impactful Microsoft contractual and pricing changes in years. It will directly influence budgeting, procurement planning, and negotiation strategies for 2025 and beyond.

Preparing for the Change

Microsoft has confirmed it will release a preview price list in October 2025. The change will impact customers at their next renewal or when they order products not already covered by their Customer Price Sheet (CPS) after November 1^st 2025.

With the deadline approaching, organizations should:

• Model projected spend under Level A pricing using an up-to-date Effective Licence Position (ELP).
• Eliminate unused and underutilized assets ahead of renewal to improve efficiency.
• Review renewal timelines – In some cases an early renewal before November 1^st could be beneficial.
• Engage finance and procurement stakeholders early to align budgets with the new pricing reality.
• Identify negotiation levers to offset price list changes and structure contracts to mitigate the impact of the new price list.

How ITAA Can Help

Independent expertise is essential when navigating Microsoft’s licensing shifts of this scale. At ITAA, we support organizations:

• Optimize agreements for cost and flexibility
• Manage renewal costs with proactive strategies
• Strengthen negotiation outcomes with insights from former Microsoft specialists

Customers using our ITAA Assist already have access to tailored guidance. For others, Assist provides flexible, on-demand expertise to address changes like this before they become costly surprises.

Lucy Baker, Senior Microsoft Consultant

Lucy is a Senior Microsoft Licensing and IT Asset Management Consultant with extensive expertise in license risk and remediation, optimization, and audit defense. Known for delivering tailored, customer–focused solutions, Lucy specializes in Microsoft 365 optimization, contract negotiation and ITAM strategy, helping organizations navigate complex licensing environments with innovative thinking and precision.