Microsoft Education licensing is changing

For more than a decade, Education customers have built their Microsoft strategy on a set of fixed assumptions including Student Use Benefits, tiered discounts for buying at scale, and Teams bundled in as standard.

With the latest announcement from Microsoft, these and many other certainties are about to change.

With that in mind, SoftwareOne is urgently publishing a series of blog posts for Education customers and our partners outlining:

1. What you need to know about these licensing changes
2. How to prepare for them
3. How to make them work in your favor.

This is the first of those posts and I hope it helps as a general orientation for what lies ahead.

What is changing?

It is important to appreciate the scale of this initiative.

Microsoft has announced the most significant overhaul of Education licensing in a generation with substantial implications for customers, partners and SoftwareOne alike. These changes will reshape the whole Microsoft 365 Education portfolio, including the plans available, the licensing benefits, how you use Teams,  security and AI.  Expect to see new plans, new pricing, and the retirement of benefits many institutions have never had to think twice about.

Thankfully, this doesn’t happen all at once and I will provide insights below into the full timeline.
That said,  I would urge you to start making decisions now to prepare for what’s ahead.

This checklist therefore gives you a broad overview of the most important changes and can be supplemented with Microsoft’s official documentation as you review and plan the next steps in your own, individual licensing strategy.

 

Area	What is changing	Suggested action
1. Licenses and benefits	Office 365 A1 and Microsoft 365 A3/A5 in their current form are retiring. A new family of plans will become available: MA0, MA2, MA3, MA5 and MA7. Student use benefits will end, while staff and faculty benefits will be removed or changed.	Review the new plans against the capabilities your staff and students actually use. Identify which benefits are worth paying for when you can no longer use them for free.
2. Pricing and procurement	Microsoft is replacing tiered volume discounts with a single discount structure.	Compare your current discount level with the new pricing available through your purchasing agreement. Assess this separately from changes to the capabilities you need.
3. Teams	Teams becomes optional.	Identify who needs Teams for teaching, learning and staff collaboration, and factor into your choice of plan.
4. Storage	Storage allocations will vary by plan and between faculty and students.	Compare storage consumption and retention needs with the new entitlements. Assess whether you need additional capacity or changes to how data is managed.
5. Security, compliance and management	Capabilities including Defender, Purview, Entra and Intune will be distributed across the new plans and priced accordingly.	Select plans based on the identified controls and capabilities you require.
6. AI	The new top tier plan MA7 brings together Microsoft’s most advanced AI, security and agent management capabilities.	Assess the value required from these paid AI capabilities and plan your licensing strategy accordingly.

When does it happen?

These changes will be rolling out in three phases, so you don’t need to take all the actions I’ve suggested all at once. Here’s an at-a-glance guide to the dates, milestones, and implications you need to know. Microsoft’s changes don’t take effect on these dates. They apply at your first agreement renewal or renewal on or after each one, so plan well in advance.

 

Date	Milestone	Implication
November 2026	Microsoft announces the updated Microsoft 365 Education portfolio (November 5).	This is breathing space, not an excuse to wait. Although no immediate action may be required, time invested in understanding the changes and planning your response now will yield dividends later. Agreement timings, budget cycles and procurement lead times may require action well before subsequent milestones.
April 2027	We recommended having a plan in place by this time.	Microsoft’s first change to how Education pricing works applies at renewals or extensions from May 1 2027. So we recommend you’ve reviewed your current agreements and pricing by April. This will be the basis for deciding which of the new Microsoft plans you need in future.
January 2028	New plans apply at renewal	Student Use Benefit ends, new SKU and storage model begins, new plans go live.

What’s the cost?

For many institutions, the financial exposure of these changes could be significant. Indicative SoftwareOne modeling across a range of customer scenarios suggests some organizations could see licensing cost increases approaching 100%. That’s why it’s so important to work out as early as possible just how far your current Education licensing relies on the benefits being retired.

Precisely how that affects your budget will depend on your current licenses, reliance on education benefits, staff and student numbers, and agreement terms. An institution making extensive use of Student Use Beneftis may face a different impact from one with a larger paid staff population.

Assess the cost of maintaining the capabilities your institution needs, including any separate Teams or storage charges. Comparing plan prices alone may miss changes in what is included.

There are operational implications too. Changes to license assignments can affect access to teaching tools, collaboration and security controls. Include the work needed to maintain those services in your planning, as well as the license costs.

But whatever the individual circumstances, the later the assessment process starts, the less room there will be to negotiate, budget, and plan.

What’s the benefit?

The big advantage of gaining a timely understanding of Microsoft’s new licensing structure and what it means for you is that you can quickly start to identify upsides in these changes.

And there really are significant upsides.

The insights you gain by reviewing your licenses, agreements and existing investments to see where value is being left on the table are a perfect moment to optimize your whole IT estate, freeing up budget to invest in areas that are important to you.

And with a choice of plans incorporating the latest AI and storage innovations, you can tailor your Microsoft estate to match exactly what you need – and exactly what you want to pay for.

I will explore these upsides in more detail in my next blog posts but for now there is one more thing that is worth understanding: you don’t have to go through all of this alone.

Education licensing expertise

As the largest Microsoft Education partner globally, SoftwareOne helps customers in Education and the wider public sector adjust to changes like this, optimize their licensing and IT estates, and to innovate.

For Hochschule Düsseldorf, SoftwareOne created AcadProcure: a centralized self-service portal that lets the university generate quotes, manage catalogs, track compliance and coordinate Microsoft licensing procurement across seven faculties. Manual email chains were eliminated thanks to 100% transition onto the automated portal quote generation. 50-100 ad hoc licensing requests per academic year were streamlined to ensure faster response times for staff.

SoftwareOne also helped rightsize the Microsoft portfolio for the Norwegian Refugee Council, identifying thousands of inactive licenses, and restructuring its agreement mix to deliver savings of around 2 million NOK while avoiding costs of 1.5 million NOK.

This combination of direct education experience and deep complex-licensing expertise is available to you now as you begin to take stock of Microsoft’s new licensing structure.