Microsoft just eliminated volume discounts from Enterprise Agreements. Starting November 1, 2025, everyone pays the same price for Microsoft 365, Azure, and Dynamics 365—whether you're buying 500 licenses or 50,000. Level C and D customers are looking at 9-12% cost increases when their EA renews.
But there's a bigger shift happening. Microsoft isn't just raising prices—they're pushing mid-market organizations away from EA entirely. If you've got fewer than 2,400 users, they want you on Cloud Solution Provider (CSP) models instead.
So now IT leaders face a choice: accept the higher EA costs or navigate a transition to CSP with its different rules and partner-managed support. The clock starts ticking when your EA renews after November 1, 2025.
Here's What Actually Changed
Microsoft's move isn't subtle. They eliminated automatic price level discounts (Levels B-D) for all online services effective November 1, 2025. Every EA customer now pays Level A pricing—the same rates you'd see on Microsoft.com—regardless of how many licenses they're buying.
This affects the full stack of Microsoft cloud services: Microsoft 365, Azure, Dynamics 365, Windows 365, and all security and compliance products. On-premises software pricing stays the same. Government and education customers get a pass for now.
But here's the reality behind Microsoft's "pricing simplification" narrative: they're actively steering mid-market organizations away from EA entirely.
The Real Financial Impact
Let's be honest about what this costs. Most IT teams focus on the percentage increases, but the dollar amounts tell the real story:
Level B customers (2,400+ users): ~6% price increase on online services Level C customers (7,500+ users): ~9% price increase Level D customers (15,000+ users): ~12% price increase
That Level D customer with 25,000 M365 E5 licenses? They're looking at roughly $2.5 million in additional annual costs. And that's just the baseline increase—it doesn't account for the loss of any additional negotiated discounts they might have secured on top of the volume pricing.
The impact hits when you renew your EA after November 1, 2025, or when you add any new online service that wasn't already on your current price sheet.
>> Related: Read about the new Block 64, and how we are building an ITAM platform for complete IT visibility across SaaS, software and cloud.
Microsoft's Strategic Push Away From EA
Most IT teams are missing the bigger picture. This isn't just about raising prices—Microsoft is fundamentally reshaping who gets to use EA agreements.
They're actively directing organizations under 2,400 users toward CSP or MCA-E models. Industry chatter suggests EA eligibility requirements may rise to 1,000+ users minimum. Microsoft has been laying the groundwork for this since 2017, starting with Azure pricing changes and progressively eliminating various discount tiers.
The goal? Align EA pricing with CSP to remove the competitive advantage of volume licensing. Make the choice between licensing models about features and support, not price.
What Changes During EA-to-CSP Transitions
If you're considering the jump to CSP (and many mid-market organizations are being pushed there anyway), here's what actually changes:
- Pricing Structure: CSP uses the same baseline pricing but flows through your partner channel
- Contract Terms: EA locks in 3-year pricing; CSP typically offers annual commitments with monthly flexibility
- Billing Model: EA's annual true-up process gets replaced by CSP's monthly or annual adjustments
- Support: EA requires a separate Unified Support contract; CSP includes partner support in the package
- Licensing Rules: Different compliance requirements between models—this is where things get tricky
That last point matters more than most organizations realize. EA and CSP have different rules for the same software. Compliance gaps during transitions are real.
Your Timeline and Options
If your EA renews before mid-2026: You have time to plan, but don't wait. Any new online services you add after November 1, 2025 will be priced at the higher Level A rates.
If your EA renews after mid-2026: You're looking at the full price impact. Start modeling costs now.
Microsoft may deny early renewals that conflict with their strategic direction toward CSP. Don't assume your historical renewal patterns will continue.
What IT Leaders Must Do Now
1. Assess Your Current Position
- Find your current EA price level in your agreement documents
- Calculate your annual online services spend that's subject to increases
- Model the financial impact: multiply your current online services costs by 1.06-1.12 depending on your level
2. Evaluate Your Real Options
- Compare EA renewal costs with CSP alternatives from qualified partners
- Consider MCA-E if you want to maintain a direct Microsoft relationship
- Look at hybrid approaches for different service categories
3. Plan Your Transition Strategy
- Inventory all current licenses before any migration
- Document existing licensing configurations and compliance requirements
- Plan for 6-12 month transition timelines if moving to CSP
- Engage with potential CSP partners early in the process
4. Revise Your Budget Planning
- Update multi-year IT budgets to account for 9-12% increases on Microsoft cloud services
- Model different scenarios (EA renewal vs. CSP transition)
- Consider timing of major software rollouts relative to renewal dates
The Compliance Factor Nobody's Discussing
Here's what most organizations aren't thinking about: licensing model transitions create compliance blind spots. EA and CSP have different rules for identical software. Historical EA purchases may not map directly to CSP equivalents.
Major agreement transitions increase software and compliance audit risk. Vendors often trigger compliance reviews when they detect significant licensing changes. You need visibility across your entire IT environment to track what's changing and ensure nothing falls through the cracks.
What This Really Means
Microsoft's elimination of EA volume discounts isn't just a pricing change—it's a fundamental shift in how they want to do business with mid-market organizations. The immediate impact is higher costs, but the broader implication is that companies in the 500-2,400 user range are being systematically moved into partner-managed relationships.
If you're a mid-market IT leader, Microsoft's message is clear: we want you working with CSP partners, not directly with us.
The key is recognizing this shift early rather than waiting until renewal deadlines force rushed decisions. Organizations that understand Microsoft's strategic direction and plan accordingly will be better positioned to manage both costs and compliance requirements during these transitions.
This won't solve everything overnight. But here's where to begin: get complete visibility into what you currently have before you decide where Microsoft wants you to go next.
For organizations looking to maintain visibility across their IT environment during licensing transitions, Block 64 provides unified ITAM platform that gives you insight across software, SaaS, cloud, and entitlements—helping ensure nothing falls through the cracks during these critical changes.