Microsoft pricing model updates

What You Need to Know: Microsoft's Online Services Pricing Consistency Update

On August 12, 2025, Microsoft announced a significant update to its pricing model for Online Services under volume licensing programs. This change, effective November 1, 2025, aims to standardize pricing across all purchasing channels, ensuring greater transparency and alignment for customers. Here's a breakdown of the announcement, its implications, and how businesses can prepare.

Announcement Details

1. Expanded Pricing Consistency:
   • Microsoft will now apply a single consistent price across Price Levels A-D for all Online Services under the Enterprise Agreement (EA) and Microsoft Products and Services Agreement (MPSA).
   • This pricing will align with the rates published on Microsoft.com.
2. Effective Date:
   • The changes will take effect at the customer’s next agreement renewal or when purchasing new Online Services not listed on their Customer Price Sheet, starting November 1, 2025.
3. Exclusions:
   • On-premises software pricing remains unchanged.
   • S. Government and worldwide Education price lists are excluded from this update.
4. Rationale:
   • This move is part of Microsoft’s broader effort to simplify licensing and improve pricing clarity for customers.

Potential Impact

1. Cost Implications:
   Many businesses, especially those on EA agreements with Level B, C, or D pricing, may see increased costs as discounts tied to these levels are removed. This could lead to higher bills for organizations that previously benefited from tiered pricing.
2. Simplified Budgeting:
   While some customers may face higher costs, the standardized pricing model simplifies budgeting and forecasting, as organizations will no longer need to navigate complex tiered pricing structures.
3. Alignment with Industry Trends:
   Microsoft's move reflects a broader trend in the tech industry toward pricing transparency and consistency. By aligning prices across channels, Microsoft ensures fairness and reduces discrepancies that could arise from regional or tiered pricing models.

How to Navigate These Changes

1. Engage with Your SoftwareOne Account Team:
   • We recommend scheduling time with your account team or partner of record to review these changes. They can help assess the impact on your organization and plan for upcoming renewals or new purchases.
2. Plan Ahead:
   • If your agreement renewal is approaching, consider locking in current pricing before November 1, 2025, if possible.
3. Evaluate Current Agreements:
   • Review your current licensing agreements and identify any Online Services that may be affected by the new pricing model.
4. Explore Alternatives:
   • For organizations significantly impacted by the pricing changes, it may be worth exploring alternative licensing models or optimizing current usage to reduce costs. See our blog Microsoft CSP vs. EA: 5 Reasons to Switch to CSP.