Navigating Microsoft's November 2025 pricing changes

Beginning 1 November 2025, Microsoft will make significant changes to its volume discounts for Online Services products purchased through the Enterprise Agreement (EA) or the Microsoft Products and Services Agreement (MPSA). 

This could lead to higher costs for many large enterprise businesses.  

This article explains what these changes mean and what you need to do to prepare.

Understanding the change

For years, Microsoft has used a tiered discounting model for its Enterprise Agreements (EAs), commonly referred to as waterfall pricing. 

Under this system, customers were placed into different price tiers, A-D, based on the number of users and/or devices licensed.

The more licenses purchased, the lower the unit price, with band D being for the greatest number of licences (15,000+) and therefore the largest discounts (typically approximately 12% off the list price.)

However as of November 2025, discount levels B to D will be aligned with A (no automatic discount), effectively moving to a standardized pricing model and removing volume-based discount tiers.

This means that companies of 2,500+ users or more will no longer enjoy automatic discounts based on volume alone. 

Why is Microsoft making this change?

Microsoft wants to simplify its licensing and align with standard cloud industry practices. It is part of a broader commercial pricing strategy that has been in progress for years. 

In 2017, they removed pricing discounts for Azure services. In 2018, they removed the Level A discount rate of 4% as part of a push to cloud alternatives and price simplification. And in 2023, single starting prices were introduced for new Online Service products. 

The goal, according to Microsoft, is to make it easier to compare agreements and to focus on actual business needs rather than a discount tier.

Who is impacted by this?

This change affects commercial and government customers (excluding education) - typically those purchasing Online Services, such as Microsoft 365, on or after 1 November 2025 and for 2,500+ user licenses, through:

• Enterprise Agreement (Enterprise Enrolment, Enterprise Subscription Enrolment, Server and Cloud Enrolment) 
• MPSA

Note: This does not affect on-premises software, Azure services or consumer products within an EA.

What if I am currently in an EA or MPSA?

The new pricing model will apply at your next renewal after 1 November 2025. Any services already contracted will keep their current price until your agreement expires.

It will also apply if you add a new online service after 1 November 2025 that isn't already on your current plan. 

The financial impact on your business

Clearly, the larger enterprises who used to qualify for the largest tiers of discount stand to lose the most in automatic discounts, and will potentially see high price rises upon renewal.

However, under the new model, the natural consequence is that the final price will be determined entirely by negotiations. By defaulting back to pricing tier A, there is more focus on each business negotiating their own rates. 

This makes a strong negotiation strategy more important than ever. Final prices will be agreed upon based on a customer’s unique business circumstances rather than being fit into a broad category of usage and employee numbers. 

Vertice’s expert negotiation support, deep vendor understanding and detailed benchmarking data can help you offset these changes and even extract more value from these agreements. 

Your next steps

Preparation is key. Here are some steps your business should take now:

• Review your agreement timelines: Find out when your current Enterprise Agreement is scheduled to renew.
• Model expected costs: Work with your teams to forecast what your online service costs will look like under the new pricing for more accurate budgeting.
• Engage stakeholders early: Get your procurement, finance, and IT leaders on the same page, aligned on the new strategies, and prepared for these changes.
• Develop a negotiation strategy: Your company's size will no longer guarantee you a discount. You must build a negotiation strategy based on your specific needs.
• Leverage Microsoft's priorities: Microsoft is incentivizing adoption of Copilot and AI services. Leveraging these in your negotiation can help you get a better price.
• Evaluate alternatives outside of Microsoft’s ecosystem: While Microsoft may steer you towards their partners and the CSP model (whose rebates are actually increasing during this change), exploring third-party procurement specialists like Vertice - who are vendor-agnostic and work only in the interest of the customer - will likely get you a better long-term outcome.

Early planning and a proactive approach will help your organization secure the best possible outcome. 

To do so, you need:

• Granular pricing benchmarks for Microsoft products and agreements across every region, sector and business size.
• Intimate knowledge of MSFT’s priorities and reseller activities
• Intricate platform and contract tracking - including upcoming renewal dates, usage rates and required licence numbers.

Our research shows that fewer than 1 in 6 companies have access to these assets, let alone effectively use them in negotiations to leverage the best deal. 

By partnering with Vertice - the leading third-party specialist procurement platform and service - you can:

Together, we will help you use this price increase to optimize your licensing, and even reduce your costs.

Chat to us today.