Microsoft Scraps Volume Licensing Discounts: Why CSP Now Stands Apart
From 1 November 2025, Microsoft will scrap all volume licensing discounts for its Online Services portfolio, including Microsoft 365, Azure, Dynamics 365, Power Platform, Defender, and GitHub.
That means pricing will be standardised at Level A rates (the same list price published on Microsoft’s website), no matter how many seats you commit to.
Who’s Affected?
This hits large organisations the hardest – those that previously enjoyed Level B–D discounts under the Enterprise Agreement (EA) or the Microsoft Products and Services Agreement (MPSA). Each level will roughly face a 6-12% increase in license costs, as shown below.
- Level A: 500–2,399 users/devices (baseline pricing)
- Level B: 2,400–5,999 users/devices (will face ~6% increase)
- Level C: 6,000–14,999 users/devices (~9% increase)
- Level D: 15,000+ users/devices (~12% increase)
Renewals from November onwards will be priced at the Level A list price only. Customers planning large-scale purchases in early 2026 may want to accelerate orders before the deadline to avoid higher costs.
Why the Change?
According to Microsoft, this move aims to simplify licensing, align pricing across all channels, and enhance transparency. It mirrors the model already used for Azure and Copilot, where you pay the same rate regardless of the number of users.
It’s also a push away from Enterprise Agreements towards the Cloud Solution Provider (CSP) model. Earlier in January, Microsoft eliminated EAs for customers with fewer than 2400 users/devices, encouraging them to move to CSP or the Microsoft Customer Agreement for Enterprise (MCA-E).
CSP vs EA – What’s Better Now?
For years, the Enterprise Agreement has been the go-to licensing option for larger organisations. It offered predictable pricing, discounts based on scale, and a three-year term that gave IT leaders a sense of stability. Those volume-based discounts were the main justification for contract lock-in, and with that lever gone, here’s how EA is stacking up against the CSP model.
Enterprise Agreement (EA)
- 3-year term, minimum 500 users/devices
- Historically rewarded larger commitments with discounts (no longer the case)
- Predictable payments, but rigid – you can only optimise licenses annually
- Direct relationship with Microsoft, but dedicated support often costs extra
Cloud Solution Provider (CSP)
- No minimum commitment – scale up or down anytime
- Monthly or annual billing – pay for what you use
- Dedicated support, value-added services and tailored solutions from an experienced partner
- Benefit from a single point of contact instead of dealing with Microsoft directly. No admin burdens for your IT team
- Ideal for organisations that want agility and flexibility to cater to growing business needs
In short, EA is still an option for enterprises that value long-term commitment above all else, but without the discount structure, many will find CSP a more cost-effective and business-friendly path forward.
What This Means for You
If your EA renewal is due after November 1, 2025, expect higher costs as discounts expire. Some organisations may want to accelerate large purchases ahead of the deadline to lock in current rates. However, in the long term, many will find CSP the smarter option.
If you’re already on CSP, nothing changes for you. In fact, this announcement underlines the benefits you already enjoy – flexibility, better pricing, and partner support.
If you’re not yet on CSP, now’s the time to take a closer look. With EA discounts disappearing, the gap between the two models is only getting wider.
As a Microsoft CSP Partner, we’ll help you reassess your licensing strategy and decide whether your current model still delivers value, or if CSP offers the flexibility and support your organisation needs.
Contact us today to receive a clear comparison of your options and create a roadmap for your Microsoft estate. That’s Clevr.
