Microsoft EA Pricing Changes 2025: Removal of Volume Licensing Discounts for Online Services

Beginning November 1, 2025, Microsoft will introduce a significant update to its commercial pricing strategy in what Microsoft calls its largest Microsoft Online Services pricing update since the introduction of single starting prices in 2023. This change will directly impact how organizations budget, renew, and negotiate Enterprise Agreements. 

“Beginning November 2025, Microsoft will flatten the volume licensing price level discounts (also known as waterfall* discounts) for all Online Services products sold in Enterprise Agreement (EA), Microsoft Products and Services Agreement (MPSA), and Online Services Premium Agreement (OSPA) deals.” (Microsoft, August 12, 2025) 

Read Microsoft’s Announcements:  

• Microsoft Online Services pricing update 
• Change to Microsoft volume licensing discounts coming November 2025

What’s Changing 

For years, Microsoft’s Price Levels A-D have provided automatic discounts based on user or device volume commitments. From November 2025, Microsoft volume licensing discounts under Enterprise Agreement price levels will be eliminated for all Online Services. This means that every customer, regardless of size, will start from the same list price published on Microsoft.com. 

This will apply to: 

• Microsoft 365 
• Dynamics 365 
• Azure 
• Windows 365 
• Microsoft Security, Compliance, Identity, and Management products 
• Copilot (already has a single starting price in place) 

The change does not apply to on-premises software, U.S. Government price lists (Federal, State, Local Governments), or Education volume licensing. 

Who Will Be Impacted By Microsoft’s Volume Licensing Changes 

Commercial and government customers with the following agreements are in scope: 

• Direct and Indirect Enterprise Agreement (Enterprise Enrollment, Server and Cloud Enrollment, Enterprise Subscription Enrollment) 
• Online Services Premium Agreement (OSPA) 
• Microsoft Products and Services Agreement (MPSA) 

For customers in Levels B, C, and D, the removal of automatic discounts will likely result in cost increases, estimated at around 6%, 9%, and 12% respectively, once current contracts renew. 

Microsoft EA Price Impact Calculator (Post-November 2025) 

When Microsoft removes automatic volume-based waterfall discounts on November 1, 2025, organizations in Price Levels B–D will see their Online Services prices align with the Level A list price. The table below shows the estimated annual cost impact based on discount removal. 

*Example calculations are estimates only, based on list price multipliers, and actual impact will vary by licensing mix, agreement type, and negotiated terms. 

How to Use This Table 

• Identify your current EA price level from your agreement documents. 
• Estimate your post-November cost by applying the listed percentage increase to your current annual Online Services spend. 
• Evaluate your Microsoft 365 EA renewal strategies now, before November 1, 2025, to preserve existing discounts where possible. 

Why Microsoft Is Making This Move 

This update is the latest phase of Microsoft’s multi-year pricing simplification strategy, which has included: 

• Removing Azure price level discounts (2017) 
• Eliminating Level A discounts (2018) 
• Introducing a single starting price for new Online Services (2023) 

Microsoft says the goal is to “align with the industry standard approach to cloud services pricing” and allow partners to focus on value-added services instead of explaining complex price structures. 

Business Impact and Considerations 

The shift means seat count will no longer automatically drive lower pricing. Large enterprises can still negotiate custom discounts, but these will depend on strategic factors such as product adoption, platform commitment, and overall spend, not just volume. These Microsoft EA pricing changes make it more important than ever to review your Microsoft 365 EA renewal strategy. 

For many mid-sized organizations, this levels the playing field between the EA and Cloud Solution Provider (CSP) models. CSP may now offer more flexible commercial terms, including multi-year commitments, making it a competitive alternative. 

Key Dates to Know 

• October 1, 2025 – Price list preview with updated Level B-D prices 
• November 1, 2025 – New model applies at: 
  • Renewal of existing agreements 
  • Purchase of new Online Services not listed on your Customer Price Sheet 

How to Prepare for Microsoft EA Pricing Changes

Organizations should: 

1. Review upcoming renewals and run cost impact scenarios. 
2. Explore CSP options for flexibility and potential savings. 
3. Engage with experienced partners to negotiate deal-level discounts where possible. 
4. Optimize Microsoft licensing portfolios to eliminate unused or overlapping services before renewal. 

Final Takeaway 

This change is one of Microsoft’s most notable shifts in commercial licensing in the last decade. Organizations that proactively model future costs, assess agreement options, and align strategically with Microsoft are better positioned to navigate the transition with fewer surprises and potentially unlock new value beyond the pricing table. 

Don’t let Microsoft’s November 2025 pricing changes catch you off guard. Join our upcoming webinar. 

Join us next Thursday, August 21, 2025, for The Ultimate Microsoft EA Contract Review Checklist webinar and learn how to navigate Microsoft’s licensing changes and complexities with confidence. Our licensing experts, Ben Marshall and Nikki Vijeh, from The IT Strategists, will share proven strategies to control costs, ensure compliance, and avoid the most common renewal pitfalls, especially with this new licensing curveball. Reserve your spot today to gain the insights and tools you need to secure the best possible outcome for your next Microsoft renewal. 

ENow’s Microsoft 365 License Optimization Tool and Licensing Negotiation Services provide you with the data and the human expertise to get the most value from your Microsoft Agreement without overpaying.