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FAQs: Microsoft's November 2025 Licensing Changes for Enterprise Agreement (EA) Customers

What is Microsoft changing about its licensing pricing?

Microsoft is eliminating volume-based discounts for Online Services under Enterprise Agreements (EA), MPSA, and OSPA starting November 1, 2025. All pricing will default to single-level pricing. 

Microsoft has not clearly defined what within Online Services are affected, such as:

  • Microsoft 365
  • Azure
  • Dynamics 365
  • Windows 365
  • Security, Compliance, Identity tools

Note: On-premises and education/government pricing are not affected — yet.

These are tiers based on scale:

  • Level A: List price
  • Levels B–D: Higher discounts based on user count or spend (now discontinued)

    • Starting Nov 1, only single-level pricing remains for Online Services.
Yes, but not based on volume. Discounts now depend on:

  • Commitment-based spend
  • Strategic product adoption (e.g., Copilot)
  • Multi-year financial alignment

  • TCO could increase 25% at renewal
  • Early renewals may trap overcommitment
  • Budgeting and forecasting models may break
  • CIO/CFO pressure will increase
  • Negotiation leverage is reduced
Immediately, especially if your renewal is after Nov 1, 2025. Enterprises need 3–6 months of visibility and alignment to:

  • Audit usage
  • Forecast demand
  • Build internal consensus

Possibly , but Microsoft may deny early or short-term renewals. Never renew early without:

  • Forecasts
  • Usage audits
  • Contract simulations
  • CIO/IT: Technical forecasting, provisioning
  • CFO/Finance: Budget modeling
  • Procurement: Negotiation and vendor management
  • IT Operations: License workflows
  • LOB Owners: App usage and spend tracking
Because they:

  • Show static, siloed data
  • Lack forecasting or entitlement context
  • Don’t connect cost to business impact

EA true-downs occur only at the annual anniversary and follow strict guidelines. They require proactive management, formal notice, and validation of reductions. Many customers miss this window, leading to overpayment for unused licenses.

CSP and MCA-E, by contrast, allow license reductions at the end of the subscription term (monthly, annual, or triannual), offering far more flexibility to align licensing with actual demand — ideal for dynamic or seasonally fluctuating organizations.

Tip: Don’t confuse “flexibility” with “simplicity.” Without real-time usage data, flexible licensing becomes a risk, not a benefit.

Yes, CSP and MCA-E support monthly scaling which means licenses can be increased or decreased more frequently than the rigid 3-year EA term. However, reductions only take effect at the end of your current subscription term (e.g., end of the month if monthly term).

EA customers can only reduce at the anniversary window, making it easy to forget and costly if missed.

You can switch, but it’s not automatic. Moving between MCA-E and CSP (or EA) requires formal review and Microsoft approval. It is not a “self-service” conversion. Timing, existing commitments, and partner relationships all factor into feasibility.

Surveil can model these scenarios in advance to help determine the financial and operational implications of switching before it becomes urgent.

Role EA CSP MCA-E 
Microsoft Heavily involved in renewals Less involved Less involved 
Partner Often transactional Strategic advisor & support lead Usually absent or optional 
Customer Less day-to-day ownership Full cost and usage responsibility Full cost and usage responsibility 

 

In short: under EA, Microsoft or your LSP helped drive the process. Under CSP and MCA-E, it’s all on you unless your partner brings true intelligence (like Surveil). 

  • Lost discount eligibility due to missed renewal modeling
  • Commitment lock-ins under worse pricing if rushed
  • Overage penalties from under-forecasting
  • Internal misalignment between IT, Finance, and Procurement
  • Missed opportunities to consolidate or right-size licenses
  • Reactive negotiations instead of strategic leverage
A readiness assessment equips you to:

  • Forecast renewal impact under Microsoft’s new pricing structure
  • Quantify unused or underutilized licenses
  • Evaluate EA vs CSP vs MCA-E paths using real usage data
  • Identify the right time to negotiate (before Microsoft forces early lock-in)
  • Align cross-functional stakeholders before it’s too late

This goes beyond IT due diligence and gives you a financial defense strategy.

Delaying action can lead to:

  • Getting locked into higher-cost, multi-year agreements without optimization
  • Missing critical planning milestones like true-down deadlines
  • Losing negotiation leverage
  • Surprise budget overruns from under-forecasting
  • Zero room to model alternatives like CSP

Surveil helps you take action months before your renewal becomes an emergency.
Remaining on an EA may create false confidence. Renewals will now reflect single-level pricing, and many legacy discounts are gone. Without usage optimization, costs can rise significantly even if your licensing footprint remains flat.
You may still negotiate, but Microsoft is shifting from quantity-based discounts to commitment-based incentives. Without usage and forecasting data, you’ll have little leverage.
No, but eligibility is narrowing. Microsoft is directing organizations with fewer than 2,400 users toward CSP or MCA-E. The EA will remain for large or public sector customers but under new pricing models.
It depends on your usage profile. CSP offers monthly flexibility but less discounts. If your licenses are right-sized, CSP can be more cost-effective. If you’re overprovisioned, it will inflate your costs faster.
Ideally, 6–12 months in advance. This allows time for usage analysis, stakeholder alignment, and vendor negotiations, especially critical with Microsoft’s new pricing model in effect.
You’ll need license entitlements, real-time usage trends, department-level consumption, historic cost data, and future growth assumptions. Surveil consolidates and visualizes all of this in one platform.
You’ll need usage intelligence over time to predict license peaks and troughs. Unlike EA, there’s little room for error. Surveil helps you build usage-based forecasts by team, function, or cost center.
Manual forecasting often leads to guesswork, overprovisioning, or under-buying. This creates cost spikes, compliance risk, or loss of leverage during renewal negotiations.
In some cases, yes, but Microsoft may require a formal agreement and timing alignment. Surveil helps assess the financial and operational tradeoffs before switching.
MCA-E (Microsoft Customer Agreement – Enterprise) is a direct relationship with Microsoft, offering CSP-like flexibility but managed by Microsoft directly. However, it lacks the partner-added value of CSP.
Flexibility without visibility equals volatility. Frequent license changes can introduce errors, budget overages, and governance gaps. Surveil helps control this with real-time tracking.
Yes, but this often leads to cost fragmentation, inconsistent SLAs, and reporting gaps. Surveil consolidates multi-tenant CSP environments into one unified view for governance.
Cost per active user measures how much you’re spending on Microsoft licenses per employee who is actually using the services. It’s the most actionable FinOps KPI in Microsoft environments and one that Surveil tracks natively.
Provisioning refers to assigning a license. Utilization measures if the license is being actively used. Most enterprises provision more than they need, creating cloud waste.
Surveil detects overlapping entitlements and unused services per user, department, or region to help eliminate costly duplication and redundant tools like Teams Phone, Power Automate, or Visio.
Historically, IT or Procurement owned it. Now, it’s a cross-functional responsibility between IT, Finance, and Procurement — all of whom must align around usage, spend, and renewal timelines. Surveil supports this alignment.
This often leads to mis-forecasted spend, license sprawl, missed renewals, and budget friction. Surveil provides a shared platform to unify these teams around licensing strategy.
Yes. It includes monthly license audits, forecasting checkpoints, FinOps reporting, and shared KPIs across IT, Finance, and Procurement. Surveil operationalizes this model out of the box.

The most important thing you can do right now isn’t to rush into decisions — it’s to start asking the right questions. These questions will help you uncover blind spots, align stakeholders, and prepare for contract negotiations under Microsoft’s new pricing model.

Here’s a self-assessment checklist to help you get started:

Licensing Inventory & Usage

  • Do we have a complete, up-to-date inventory of our Microsoft 365 and Azure licenses?
  • Have I modeled the financial impact of Microsoft’s shift to single-level pricing on our renewal?
  • Am I actively comparing our EA, CSP, and MCA-E options using usage-backed modeling, not just pricing sheets?
  • Have I recently completed a full license and usage optimization review across all business units and tenants?
  • Am I aware of any bundled services (e.g. Teams, Copilot, Power Platform) that we are licensed for but not actively using?
  • Do we know which licenses are actively being used and which are not?
  • Are we paying for inactive users or underutilized services
  • Have we identified any duplicate or overlapping subscriptions?
  • Are there entitlements (e.g. Teams Phone, Power Platform) that we own but haven’t activated

Renewal Timing & Strategy

  • Have I documented my next EA anniversary or CSP commitment term end date?
  • Do I have Microsoft’s terms of service and current price sheets archived and accessible
  • When is our next Microsoft contract renewal? Can we still negotiate before the deadline
  • Are we eligible for early renewal to lock in current terms?
  • Have we reviewed the impact of Microsoft’s move to single-level pricing?
  • Are we modeling both EA and CSP options side-by-side?

Forecasting & Financial Planning

  • Can we accurately forecast Microsoft usage and spend over the next 12–36 months?
  • What is our current cost per active user?
  • How will pricing changes impact our total cost of ownership?
  • What assumptions are our Finance team using in Microsoft budget planning and are they accurate?
  • Can I simulate early renewal vs. new contract options?
  • Have I factored in Microsoft’s move to single-level pricing?

Stakeholder Ownership & Governance

  • Who owns Microsoft licensing decisions in our org: IT, Finance, Procurement?
  • Is there an internal task force aligned around Microsoft licensing strategy and ownership?
  • Do those teams have clearly defined renewal roles and responsibilities?
  • Do those teams have shared visibility into usage, entitlements, and spend? Is everyone looking at the same data?
  • Are we running monthly license audits or cost reviews?
  • What KPIs are we tracking (if any) to measure Microsoft ROI?

Contract Negotiation Readiness

  • Are we relying solely on Microsoft’s proposals, or do we have our own data-backed models?
  • What contract pitfalls do we need to avoid (e.g. overcommitment, unused services)?
  • What is my true-down or true-up window?
  • Can I still negotiate terms? Or have I missed the leverage point?
  • Are we prepared to counter Microsoft’s offers with optimization-backed scenarios?
  • Do we have a plan to benchmark and evaluate CSP or MCA-E as alternatives?
  • Do I understand the implications of switching CSP partners or MCA-E providers mid-term?
  • If we’ve made a MACC commitment, do we know how that affects our flexibility to change contract types or partners?
  • Do I know which renewal decisions must be made before October 31 to avoid pricing increases or constraints?

Platform & Tooling

  • Do we have the tools to track entitlements vs. usage in real time?
  • Can we visualize forecasted vs. actual spend by license type or cost center?
  • Are our tools aligned to FinOps practices or just procurement tracking?

Surveil is a FinOps Certified Platform that helps enterprises take control of Microsoft 365 and Azure costs with deep usage intelligence, forecasting, and optimization insights. We’re headquartered in the U.S. and U.K., trusted by global Microsoft partners, and relied on by organizations preparing for renewal negotiations, cost governance, and multi-cloud clarity.
Surveil’s platform enables:

  • Real-time visibility across Microsoft 365 and Azure usage
  • Side-by-side EA vs. CSP vs. MCA-E modeling
  • Renewal forecasting with historical context
  • Contract modeling and optimization readiness
  • Alignment across IT, Finance, and Procurement teams
  • Forecast modeling by product, user, region
  • License rightsizing recommendations
  • Self-serve dashboards for IT, Finance, Procurement

We’re not just a dashboard. We’re your readiness engine.

Great. Surveil powers many partners with:

  • White-labeled dashboards
  • Readiness assessments
  • Co-branded optimization services

If your partner uses Surveil, they can help you negotiate with confidence.

  • Microsoft-specific intelligence (not general SAM)
  • Built for FinOps, forecasting, and business planning
  • Fast to deploy, easy to act on
  • Used by global enterprises and partners

It’s a 1:1 data-driven session tailored to prepare your organization for Microsoft’s new licensing and pricing model. Whether you’re under EA or exploring CSP/MCA-E, Surveil can help.

What you’ll get:

  • Full review of your Microsoft 365 & Azure licensing footprint
  • Forecasting and modeling under Microsoft’s new pricing tiers
  • Optimization opportunities ahead of renewal
  • Roadmap to engage finance, procurement, and IT
  • Clarity on how Surveil can help you lead with confidence and not react under pressure

Why an assessment is essential for negotiations:

  • Microsoft’s pricing shift removes the discount lever and optimization is now the only strategic defense
  • Surveil provides the data and modeling needed to challenge pricing assumptions and build internal alignment
  • Negotiations without Surveil often default to Microsoft’s narrative and timelines

Why now, not later:

  • Microsoft may deny early renewals without a data-backed case
  • Pricing changes begin Nov 1, 2025. Organizations must act before contracts auto-renew at higher rates
  • Late planning leads to rushed decisions, long-term waste, and lost leverage

Who it’s for:

  • CIOs and IT leaders planning renewals
  • CFOs and procurement managing cloud costs
  • Stakeholders facing EA-to-CSP transitions
  • Anyone trying to avoid a surprise 15–25% cost increase

Book your Microsoft Licensing Readiness Assessment Session today.
🔗 Visit Microsoft Contract Renewals

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