Microsoft Product Terms Updates – August 2025: Key Insights
Explore Microsoft’s Aug 2025 Product Terms updates. From server subscriptions to Azure AI governance, ITAA breaks down the key changes and impacts.
Microsoft’s August 2025 Product Terms updates bring targeted but significant shifts across online services, Exchange, Skype for Business, Azure, Microsoft 365, and Defender. These refinements reflect Microsoft’s continued alignment of licensing structures with its subscription-first strategy, alongside updates for AI compliance and accessibility.
Summary of key updates
| Online Services: | 30-day renewal grace period removed. |
| Exchange & Skype for business: | Subscription Editions introduced. |
| Azure AI Foundry: | Bing Terms of Use link revised; new “Grounding with Bing” language. |
| Microsoft 365: | Unattended license now required for Windows 365 Enterprise (aligns with AVD). |
| Defender for Experts: | Updated prerequisite tables; new MCA table for XDR and Hunting XDR. |
| CAL & ML Equivalency: | Tables reformatted for accessibility and AI-readability. |
| Glossary: | Corrected naming of Azure AI Foundry Models in “Covered Product.” |
1. Universal License Terms for Online Services
Previously, Microsoft auto-renewed Online Services subscriptions unless customers opted-out by contacting their reseller at least 30 days prior to expiry. This has now changed to allow customers to opt-out via their Admin Center, bypassing their resellers altogether. Notably, customers that opt-out of auto-renewal do not have their Online Services subscriptions cancelled at the end of the period and instead are put onto a rolling 30-day contract (Microsoft’s “Extended Term”), unless they have responded to Microsoft’s request as to whether they wish to continue with their renewal.
Why it matters: Microsoft appear to be using a classic B2C auto-renewal approach to subscriptions, and as such customers should be aware of potential surprise costs if they do not complete both opting-out of renewal as well as cancellation when Microsoft contacts them.
2. Exchange & Skype for Business Subscription Edition
With both products moving away from the typical 3-year lifecycle to a subscription SaaS model without versions, the product terms have changed the wording to reflect this name change.
Read more: What’s new in Exchange Server Subscription Edition (SE) | Microsoft Learn
3. Microsoft 365 – Unattended Bot
A new prerequisite has been added:
- Microsoft 365 unattended licenses are now a potential prerequisite for Windows 365 Enterprise.
- This change brings parity with Azure Virtual Desktop (AVD)
Why it matters: This will allow for niche use-cases of unattended bots now being able to utilize the Windows 365 Enterprise license.
4. Microsoft Defender for Experts
Expanded coverage in licensing tables:
- Updates to EES, EAEAS, and prerequisite requirements.
- A new MCA table for Defender Experts for XDR and Hunting XDR has been added.
5. Azure AI Foundry – Grounding with Bing Search
Microsoft have now changed Grounding with Bing Search to be a ‘First-Party Consumption Service’, which they define as Microsoft Online Services that are available as Azure meters. Interestingly, the link they have provided to the governing terms is currently broken, so Microsoft may struggle to use this in negotiations: We are sorry, the page you requested cannot be found.
6. CAL & ML Equivalency
Tables have been reformatted for greater accessibility and AI-readability.
Why it matters: While not changing license terms, this signals Microsoft’s recognition that AI-driven tools are increasingly used to parse licensing data. Expect formatting updates to become more common as AI adoption grows.
7. Glossary
A minor correction was made, tweaking the definition of Covered Product to amend to “Azure AI Foundry Models”.
Explore Azure AI Foundry Models – Azure AI Foundry | Microsoft Learn
Final Thoughts
While July’s updates focused on AI responsibility and governance, August highlights subscription tightening, compliance deadlines, and operational clarity. Together, they show how Microsoft is simultaneously pushing accountability onto customers as well as providing new licensing options.
Consultant Comment – Robert Wright, Microsoft Consultant:
“These updates may feel administrative, but they’re part of a wider trend: Microsoft is narrowing compliance gaps while accelerating the move to subscription licensing. For organizations, that means less flexibility on renewals, clearer AI-related boundaries, and fewer perpetual options. Staying ahead requires not just reading the Product Terms but understanding their trajectory, from governance last month to operational tightening this month.”
Our 2025 Microsoft Product Terms Updates
Read the rest of our summaries on Microsoft Product Terms updates for 2025 here:
Need Clarity or Guidance?
Contact us to understand how these changes can affect your organization – and how to turn them into an advantage.
Robert Wright, Microsoft Consultant
Robert Wright is an ex-Microsoft auditor turned Licensing Consultant. He focuses on license compliance with a strong emphasis on cost-saving strategies. With a proven track record, he excels in optimizing licensing portfolios across various industries, particularly in the public sector.
