Microsoft Discontinues Volume Discounts for a More Transparent Approach
Microsoft has announced a significant change to its pricing approach for Online Services in Enterprise Agreements (EAs), set to take effect on November 1, 2025. This update eliminates volume-based discount tiers (Levels B–D), standardizing all pricing to the Level A rate, which is equivalent to the public list price on Microsoft.com[1][2][3].
The change means that larger organizations, which previously enjoyed discounts up to 12%, will see an increase in costs ranging approximately from 6% to 12%, depending on their current price level[1]. This adjustment impacts customers by increasing licensing costs at renewal or when purchasing new Online Services not covered by existing price sheets[1][2].
The standardization to Level A pricing creates pricing parity across channels, which can simplify purchasing for Microsoft but diminishes negotiation leverage for customers on EA and MPSA agreements[4][5]. Microsoft's goal is to bring the Online Services pricing model into line with those already rolled out for services like Azure.
Critics view this update as a strategic move by Microsoft to shift customers away from the Enterprise Agreement channel to other licensing channels such as the Cloud Solution Provider (CSP) program or the Microsoft Customer Agreement (MCA). One reason for this perception is that the EA no longer offers volume discounts, reducing its cost appeal for large and mid-sized organizations[3][4].
Additionally, Microsoft is phasing out EA eligibility for smaller organizations (under 2,400 seats), directly nudging those customers toward CSP or MCA options[3]. This move could drive many customers away from EA toward CSP or other channels, for flexibility and cost reasons[3][4].
Key points:
- No more volume discount tiers (Levels B-D) in EA pricing for Online Services, equalizing all pricing to Level A starting Nov 2025[1][2].
- Resulting cost increases of ~6-12% for impacted customers, primarily larger enterprises[1].
- EA eligibility restricted to organizations with at least 2,400 seats, pushing smaller customers to CSP/MCA models[3].
- Microsoft aims for pricing consistency across channels, but critics see it as controlling pricing and eroding customer negotiation leverage[5].
If you have an EA renewal or need to purchase new Online Services soon, it is crucial to review your current agreement and engage with Microsoft licensing specialists to plan accordingly[2][5]. It is still important for customers to prepare for an upcoming contract negotiation with Microsoft, including assembling and managing their internal contract negotiation team, clarifying their current use and future needs for Microsoft products, understanding special concessions, and developing financial models for various scenarios.
[1] Microsoft Tech Community: Microsoft Online Services pricing changes in Enterprise Agreements
[2] Microsoft: Microsoft Online Services pricing changes in Enterprise Agreements
[3] ZDNet: Microsoft's pricing changes for Enterprise Agreements: What you need to know
[4] PCMag: Microsoft to Eliminate Volume-Based Discounts for Enterprise Agreements
[5] Forbes: Microsoft's Pricing Changes For Enterprise Agreements: What It Means For Businesses
- In an effort to bring consistency to its pricing models, Microsoft aims to extend the Azure pricing model to its Online Services, aligning both with Level A rates and eliminating volume-based discounts (Levels B-D) in Enterprise Agreements.
- The adoption of Level A pricing could potentially drive larger organizations towards Microsoft's Cloud Solution Provider (CSP) program or the Microsoft Customer Agreement (MCA), as they will face increased licensing costs at renewal or when purchasing new Online Services.
