If you’ve ever justified a big Microsoft Enterprise Agreement by saying, “the more we buy, the more we save,” that card is about to be pulled from the deck. Microsoft is retiring the volume discount that made EAs the gold standard for enterprise licensing. Starting November 1, 2025, every organization will pay the same list price for cloud services. It’s a shift that flattens the playing field and forces enterprises to rethink how they negotiate, plan, and commit to Microsoft’s cloud.
Introduction
For decades, Microsoft’s Enterprise Agreement (EA) has been the crown jewel of corporate licensing, offering large organizations predictable pricing and volume discounts for buying in bulk. But those discounts are about to vanish.
In August 2025, Microsoft announced sweeping changes to the EA model, and by November 1, 2025, all cloud services under EA will be priced at the same flat list rate, regardless of whether you have 500 users or 50,000.
This post breaks down what’s changing, why it’s happening, and what it means for your organization.
What’s Changing?
- No More Volume Discounts: The EA used to reward scale with 6–12% discounts for larger deployments (Levels B–D). Starting in November, every organization pays the same Level A list price.
- Cloud Services Only: This change impacts Microsoft 365, Azure, Dynamics 365, Power Platform, Windows 365, and security/compliance services. On-premises licenses (Windows, Office, server software) remain unchanged.
- Exempt Segments: Government and Education EA customers are not affected, for now.
Microsoft’s Framing: Simplicity and Transparency
Microsoft says this is about streamlining licensing and creating pricing consistency across channels (EA, CSP, MCA, and Microsoft.com).
In their view, this:
- Eliminates confusing tiered pricing rules.
- Makes budgeting easier with a single, predictable baseline.
- Aligns all customers under the same starting point.
The Real Story: Strategic Shifts
While simplification is the official line, the strategy runs deeper:
- Consumption-Based Deals: Discounts won’t vanish completely, but they’ll depend on commitments (e.g., Azure spend, multi-year adoption) instead of seat volume.
- Narrowing EA Eligibility: Organizations with fewer than 2,400 seats are being directed away from EAs and toward CSP or MCA. The EA becomes a tool reserved for mega-enterprises.
- Revenue Alignment: By flattening EA discounts, Microsoft pushes smaller customers into channels where they often pay list price, while focusing direct sales on high-value accounts.
What This Means for You
- Audit and Act Before October 31: To lock in existing discounts and add new online services, take action before the cutoff date.
- Prepare for Cost Increases. Expect:
- About 6% increase for Level B customers
- About 9% increase for Level C
- About 12% increase for Level D
- Multiply that across thousands of licenses, and the math gets sobering.
- Don't Rush Renewals: Microsoft may resist early renewals, and rushing could weaken your negotiation leverage.
- Explore Alternatives: CSP offers flexibility (monthly/annual terms) and sometimes partner-led discounts, making it a viable option for mid-size organizations.
- Negotiate Differently: Future discounts hinge on cloud adoption commitments (e.g., new workloads, Azure spend) rather than headcount. Your negotiation playbook must shift accordingly.
The Bigger Picture
This isn’t just about 2025. It’s the culmination of Microsoft’s licensing evolution:
- 2017: Azure EA pricing flattened.
- 2018: Lowest EA tier discounts eliminated.
- 2023: New services launched at a flat price regardless of tier.
- 2025: Final step, all cloud services priced at the same Level A baseline.
The strategy is clear: Microsoft wants customers to focus less on “buying seats in bulk” and more on growing cloud usage, with recurring revenue as the endgame.
Conclusion
For enterprise buyers, the era of bulk discounts is over. Microsoft’s EA no longer guarantees savings for scale; it guarantees only a baseline price. That’s not all bad news. With the right planning, you can still capture discounts, but only by tying them to strategic cloud commitments rather than raw headcount. In other words, your CFO just lost the “buy more, save more” card, but gained a new one: “commit smarter, save smarter.”
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