Microsoft has announced a major change to its commercial pricing strategy that will significantly impact how organizations purchase Microsoft Online Services through the EA (Enterprise Agreement) and Microsoft Products and Services Agreement (MPSA) license agreements. Beginning November 1, 2025, Microsoft will eliminate volume-based waterfall pricing discounts for all Online Services across the EA and MPSA.
This move aligns Microsoft’s cloud services pricing with broader industry practices and marks a continued push toward pricing simplification and parity between EA and Cloud Solution Provider (CSP). models Here’s what IT leaders and procurement teams need to know—and how CloudServus can help you prepare.
What’s Changing
Previously, organizations with larger license counts received progressively lower unit pricing—also known as waterfall discounts or price levels. These pricing tiers (A, B, C, D) provided automatic discounts based on volume thresholds, making scale a key factor in cost planning.
As of November 2025, Microsoft will eliminate these tiered discounts for Online Services only. All new Online Services purchases and agreement renewals will begin at the same standard price, regardless of customer size or volume.
This applies to:
- Microsoft 365
- Dynamics 365
- Azure
- Windows 365
- Microsoft Security, Compliance, Identity, and Management solutions
Important: This does not apply to on-premises software. Only cloud-based Online Services are impacted.
In simple terms, this change will effectively result in a price increase for many customers:
- Level B customers: approximately +6%
- Level C customers: approximately +9%
- Level D customers: approximately +12%
Who’s Affected
The change impacts:
- Commercial and government customers under EA (Enterprise Enrollment, Server and Cloud Enrollment, and Enterprise Subscription Enrollment)
It does not affect:
- U.S. Federal, State, and Local Government customers
For impacted customers, the new pricing model will apply:
- At the start of a new agreement post–November 1, 2025
- At the renewal of an existing agreement, beginning November 1, 2025
- When purchasing a new Online Service not already listed in your Customer Price Sheet after the effective date
Why Microsoft Is Making This Change
Microsoft says this is the next step in its long-term pricing simplification strategy. Previous changes included:
- Removal of Azure volume discounts in 2017
- Elimination of Level A discounts in 2018
- Launch of single starting prices for all new Online Services in 2023
With this new update, Microsoft is:
- Aligning EA pricing more closely with CSP pricing
- Enabling partners to focus on value-added services rather than complex pricing structures
- Streamlining customer purchasing decisions by focusing on business needs and deal value
What This Means for IT Leaders
If you’re managing a large Microsoft estate under EA or MPSA, this change will likely:
- Eliminate automatic volume discounts your organization may be relying on
- Increase the need to negotiate pricing at the deal level
- Require greater scrutiny of what’s on your Customer Price Sheet before making new purchases post-November
- Potentially make CSP a more attractive purchasing model for flexibility and budget control
How CloudServus Can Help You Navigate This
As a top Microsoft Solutions Partner, CloudServus helps organizations plan ahead for licensing changes that can impact budgets and business continuity. Here’s how we’re already supporting our clients:
- Microsoft Licensing Assessments: We’ll help you evaluate how this change impacts your current pricing and identify which products will be affected at renewal.
- EA vs. CSP Strategy: We’ll work with you to compare the long-term benefits of renewing your EA vs. moving eligible workloads to a CSP model.
- Renewal Readiness Planning: We help ensure you don’t get caught off guard when your next agreement renews post-November 2025.
The clock is ticking. Now is the time to review your licensing roadmap and make sure you’re positioned to get the most value from your Microsoft investment.
CloudServus helps organizations simplify Microsoft licensing, eliminate waste, and secure the best value possible. Let’s make sure your next agreement is optimized for performance—not complexity. Schedule a Microsoft Licensing Assessment today.
Kathy Hajewski
