Originally published at Telefonica Tech
On 12 August 2025, Microsoft announced significant changes to Enterprise Agreement (EA) pricing for online services. Beginning 1 November 2025, all services, including Microsoft 365, Dynamics 365, Power Platform, Defender, and GitHub will adopt one standardised price across Price Levels A through D, aligned with Microsoft.com list pricing.
This Microsoft licensing change impacts the Enterprise Agreement (EA), Microsoft Products and Services Agreement (MPSA), and the Online Services Premium Agreement (OSPA) in China. On-premises software pricing remains unchanged, and United States Government and global Education price lists are excluded.
The End of Waterfall Discounts in Microsoft EA Pricing
Historically, Microsoft’s EA pricing followed a waterfall (tiered) discount model, where the number of users or devices determined your “price level”:
- Level A: approximately 500–2,499 users – modest discount
- Level B: approximately 2,400–5,999 users
- Level C: approximately 6,000–14,999 users
- Level D: 15,000+ users – up to around 12% discount
Under this structure, higher-volume customers traditionally benefited from greater discounts. From November 2025, Microsoft will remove these tier-based discounts. All customers, even those previously in Level D, will pay a single flat price. For larger organisations, this could mean 6% to 12% price increases on online services.
How the 2025 Microsoft Pricing Changes Impact EA Customers
Higher Renewal Costs for Some:
Organisations in Price Levels B, C, or D may face notable increases at their next EA renewal or when adding new services.
Simplified Forecasting:
A single price means greater transparency and budget predictability, without the need to calculate tiered discounts.
Time-Sensitive Opportunity:
If your EA renewal is due before 1 November 2025, you can still lock in current pricing and avoid upcoming increases.
Why CSP Is Emerging as the Smarter Renewal Path
Given these updates and the fact that Cloud Solution Provider (CSP) pricing remains unaffected, the CSP model is emerging as a more flexible, future-ready alternative to renewing an EA.
Flexibility and Value-Added Services:
CSP enables Telefónica Tech to provide tailored support, bundled services, and flexible terms that the EA lacks.
Long-Term Pricing Options:
Microsoft now offers three-year subscriptions via CSP, giving customers longer commitments and pricing stability—traditionally only an EA advantage.
Alignment with Microsoft’s Direction:
Microsoft is actively encouraging customers to move to CSP and MCA-E, particularly for organisations with fewer than 2,400 users.
Operational Simplicity:
CSP simplifies billing, licence management, and support, and is generally more agile than EA renewals.
Telefónica Tech Recommends: Proactive Engagement and CSP Migration
For organisations with imminent EA renewals:
Act Early and Explore CSP: Begin CSP conversations with Telefónica Tech now to assess your migration path. Evaluate licence optimisation, usage patterns, and support requirements.
Consider CSP Advantages:
- Transparent pricing tied to consumption and contract term, not user or device volumes.
- Flexible bundles that include professional services, consultancy, and ongoing support.
- Options for one- or three-year terms, aligning predictable costs with planning cycles.
- Simplified purchasing and subscription management via the Telefónica Tech Connect Store.
Microsoft EA vs CSP: Renewal Scenarios at a Glance
| Scenario | What It Means for You |
|---|---|
| Renew EA before 1 November 2025 | Retain existing tiered discounts. |
| Renew EA after 1 November 2025 | Flat pricing with potential increases, especially for higher tiers. |
| Move to CSP now | Gain flexibility, potential long-term savings, and partner-led support. |
Preparing Your Microsoft Licensing Strategy for 2025
The removal of waterfall discounts marks a major shift in Microsoft’s licensing landscape, with larger EA customers most exposed to cost increases. While this simplifies pricing, it also underlines the need for a more flexible and sustainable renewal approach.
At Telefónica Tech, we believe the Cloud Solution Provider (CSP) model offers that path forward, combining transparent pricing, greater agility, and long-term value.
In summary, organisations should act quickly to secure current EA pricing where possible while also preparing for a CSP transition. It’s the model most aligned with Microsoft’s long-term direction and the one best positioned to deliver lasting value for customers.
To understand how these changes will affect your organisation, and to explore the best options for your renewal strategy, speak with our experts at Telefónica Tech today by submitting the form below.
