Microsoft is implementing major changes to its Enterprise Agreement (EA) model starting November 1, 2025, and the impact on licensing strategy and IT budgets will be significant. At Covenant Technology Partners, we’re committed to helping our clients stay ahead of the curve. Here’s what you need to know—and how to prepare.
What’s Changing?
1. Volume Discounts Are Ending
Microsoft will eliminate tiered pricing (Levels B–D) for Online Services. All customers—regardless of size—will pay Level A list pricing.
Affected services include:
- Microsoft 365
- Dynamics 365
- Azure
- Windows 365
- GitHub
- Microsoft Security, Compliance & Identity solutions
For large enterprises, this could mean a cost increase of up to 12.83% annually.
2. Standardized Pricing Across Licensing Models
Microsoft is aligning pricing across EA, MPSA, and OSPA agreements. That means:
- No more regional or volume-based pricing advantages
- Everyone pays the same published rate
This simplifies procurement but removes leverage for high-volume buyers.
3. EA Eligibility Tightens
Organizations with fewer than 2,400 seats will no longer qualify for EA. Instead, they’ll need to transition to:
- Cloud Solution Provider (CSP) model
- Microsoft Customer Agreement (MCA)
These models offer flexibility but may lack the predictability and control of traditional EA contracts.
4. Timing Matters
These changes apply at:
- Your next EA renewal
- Or when purchasing new services not already listed on your Customer Price Sheet
If your renewal date falls in late 2025 or early 2026, it’s critical to start planning now.
Quick Impact Snapshot
| Organization Size | Previous Pricing | New Pricing | Impact |
|---|---|---|---|
| Large (Level D) | Deep discounts | List price | ↑ Costs by 10–13% |
| Small (Level A) | List price | No change | Neutral |
| < 2,400 seats | EA access | CSP/MCA | Must transition |
What Should You Do Next?
- Review your current EA contract and renewal timeline
- Assess your seat count and determine future eligibility
- Model cost impacts based on the new pricing structure
- Explore other options for flexibility and scalability
- Engage your Microsoft account team or licensing partner to renegotiate terms or transition smoothly
Partner with us!
At Covenant, we specialize in helping organizations optimize their Microsoft licensing strategy. Whether you’re facing a renewal, planning a transition to CSP, or simply want to understand your options, our team is here to guide you.
Contact us today to schedule a licensing strategy session and ensure your business is ready for the 2025 EA transformation.
Let’s turn change into opportunity.