2025 Microsoft Licensing
Changes
How to prepare your organization,
considerations, and questions to ask
your Microsoft representative and
partner
By Jeff Elliott
Info-Tech Research Group Inc. is a global leader in providing IT research and advice. Info-Tech’s products and services combine actionable insight and
relevant advice with ready-to-use tools and templates that cover the full spectrum of IT concerns. © 1997-2025 Info-Tech Research Group Inc.
2025 MICROSOFT LICENSING CHANGES
More Global Price Increases (and One Decrease)
Microsoft will be raising the prices for Power BI Professional Per User, Power BI
Premium Per User, and Teams Phone Standard Per User. Below is a summary of the
increases:
• Power BI Professional Per User – 40%
• Power BI Premium Per User – 25%
• Teams Phone Standard Per User – 30%
There is no price increase with the full M365 E5 license, just these individual licenses. It
appears Microsoft is reducing the pricing gap between M365 E3 and M365 E5, which
should help make M365 E5 more cost effective and drive adoption.
Right now, most customers need a 30% to 35% discount on the M365 E5 license to
match the renewal pricing for M365 E3.
If you are planning to purchase some of these licenses in the future, do so prior to April
1, 2025, to lock in the current price and save money.
Microsoft announced two currency rate fluctuations for February 1, 2025:
• The Branilian real (BRL) will increase 12% for both cloud licenses and onpremises licenses.
• The British pound (GBP) will reduce from 5% to 6% for cloud licenses. Onpremises license costs will stay the same.
Cloud Solution Provider (CSP) Changes
Currently, whether you purchase your CSP licenses with the one-year upfront payment
option or the one-year commitment with monthly payments option, the cost is the
same overall, as it always has been.
Starting April 1, 2025, Microsoft will charge a 5% uplift for clients using the one-year
commitment with monthly payments option. There are no changes to the one-month
commitment option or the one-year upfront payment option.
If you renew your CSP agreement prior to April 1, 2025, you will defer this new 5% uplift
until your next renewal in 2026.
On December 1, 2024, Microsoft also introduced a one-year commitment with monthly
payments option for Copilot. The 5% uplift clause was added to this as well.
Unfortunately, there is still no one-month commitment option for Copilot under CSP.
INFO-TECH RESEARCH GROUP
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2025 MICROSOFT LICENSING CHANGES
Adding Copilot
While the enterprise agreement (EA) discount for Copilot is only 5% to 10%, we
continue to see this leading to better M365 E5 discounting when added. Customers will
need to add at least 300 Copilot licenses to their agreement to see a discount.
More EAs Going Direct
This next change is a little frustrating. In mid-November, 2024, Microsoft announced
that, starting January 1, 2025, a small amount of cloud EAs would no longer be able to
renew under the EA framework. Affected customers would need to renew under either
the CSP licensing program or the MCA-E licensing program.
The details coming from Microsoft are vague and leave numerous questions
unanswered. Affected customers will be contacted by their Microsoft rep if an EA is no
longer an option for them.
Microsoft has yet to expand on which customers are affected, which regions will be
affected, or when more customers will be forced to make this transition, nor has it
confirmed whether the EA licensing program is officially going away.
It has been rumored for several years now that Microsoft will end the EA licensing
program. But until the company either releases a replacement licensing program or
alters the existing licensing program (CSP, MCA-E), don’t expect to see the full
elimination of the EA licensing program.
From a pricing standpoint, cloud licenses under EA Level A, CSP, and MCA should all be
comparable. Microsoft has been adjusting price points across similar agreements for a
couple of years now.
The biggest concern is with EA Level B to Level D customers, whose licenses include
programmatic discounts. Most of these agreements have amendments that are not
allowed under CSP or MCA-E. Microsoft has yet to address these concerns or provide
any details on when we should expect to see an official transition date.
CSP and MCA-E don’t allow on-premises licenses with Software Assurance (SA) either.
It doesn’t make sense for an EA customer (all licenses under one agreement) to move
to a CSP or MCA-E for cloud licenses, then have another agreement (MPSA or Open
Value) for on-premises licenses. This is just another concern Microsoft has yet to
address.
Also, the EA licensing program allows “From SA” part numbers, which include a 15%
programmatic discount. “From SA” part numbers were used when clients did their
initial jump to the cloud. It was Microsoft’s way of thanking customers for their
investment in SA by providing them a discount for moving to the cloud (Desktop
Professional on-premises EA to M365 E3 From SA cloud EA).
INFO-TECH RESEARCH GROUP
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2025 MICROSOFT LICENSING CHANGES
CSP is a good option for some customers, as they will receive partner-led (basic)
technical support and a rep to assist with licensing questions and general day-to-day
activities (processing orders, product/technical questions, license reviews). EAs do not
include any technical support.
Should customers decide to move to an MCA-E agreement, there is no partner – they
will only be dealing with Microsoft. The partner is excluded and essentially goes away.
With the complexities of Microsoft licensing, different agreements, and options, having
a partner will still benefit most clients.
The Licensing Solution Provider (LSP) Channel
Customers should expect to see changes in the LSP channel in 2025. As traditional
partner fees for EAs continue to get smaller, expect to see more of a focus on services
than licensing.
Traditional partner fees averaged around 20% to 30% ten years ago. Today, most deals
average 1% to 10%.
In December, SoftwareOne and Crayon announced they will be merging, and
Softchoice announced it has agreed to be acquired by World Wide Technology. It will be
interesting to see how these changes affect customers in 2025. If one of these partners
is managing your Microsoft agreement today, it is best to ask them how these changes
will affect you.
We see Microsoft paying the partner more on consumption than transaction. Payouts
are mostly geared toward focus products, and almost nothing is paid for mainstream
products. Most on-premises licenses already pay the partner nothing.
Unfortunately, customers are telling us the skill set of the LSP partner is not that good
anymore. More customers are getting new reps or moving to a pool of people who
manage their agreements. We see more turnover and fewer LSP partners being reactive
to licensing changes or announcements.
If you are unhappy with your current EA partner, Microsoft does allow you to switch
partners. You will need to sign a Change of Channel Partner (COCP) document, and
there is a 90-day transition period. Similar documents and transition periods also
applied to MPSA, Select Plus, and CSP customers.
Info-Tech can discuss options and provide interview questions you can use to find the
right partner for your requirements.
INFO-TECH RESEARCH GROUP
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2025 MICROSOFT LICENSING CHANGES
Our Recommendations
2025 will be a bumpy ride for some customers. Make sure to prepare for the new price
increases and changes to the CSP licensing program.
If you have an EA that expires in 2025, ask your Microsoft rep if your organization is part
of the “small number of customers” that will be forced to renew under CSP or MCA-E.
If you do have to move to the CSP or MCA-E licensing program, here are some questions
to ask your Microsoft rep:
• How will Microsoft honor my existing EA amendments at renewal?
• How will Microsoft handle any programmatic discounts I am receiving today?
• Since MCA-E is direct, who do I contact for any licensing questions?
• Will I have a dedicated rep or have to deal with multiple people?
Make sure to plan and engage Info-Tech early in your renewal process. Leveraging the
Price Benchmarking & Negotiation team at Info-Tech will help ensure you are getting the
best deal from Microsoft.
INFO-TECH RESEARCH GROUP
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Info-Tech Research Group Inc. is a global leader in providing IT research and advice. Info-Tech’s products and services combine actionable insight and relevant advice
with ready-to-use tools and templates that cover the full spectrum of IT concerns. © 1997-2025 Info-Tech Research Group Inc.