Microsoft implemented major changes to its pricing models that affect nearly every customer worldwide. As of 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) no longer receive volume-based price level discounts for Online Services.

What Changed?

Previously, Microsoft applied 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 disappeared. Almost all customers, including commercial organizations and government, 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 moved to a standard Level A equivalent price list – with very limited exceptions.

Who Was 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 directly influences budgeting, procurement planning, and negotiation strategies for 2025 and beyond.

Adjusting to the New Pricing

Microsoft released its preview price list in October 2025, and the changes now apply to customers at their renewal or when ordering products not already covered by their Customer Price Sheet (CPS) after November 1st, 2025.

With the new pricing in effect, organizations should:

• Model current and future spend under Level A pricing using an up-to-date Effective License Position (ELP).
• Eliminate unused and underutilized assets ahead of renewals to improve efficiency.
• Review ongoing renewal timelines – for some, an early renewal before November 1st may already have been the better option.
• Engage finance and procurement stakeholders early to align budgets with the new pricing model.
• Identify negotiation levers to offset price list changes and structure contracts to minimize impact.

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.