Microsoft’s November 2025 Licensing Shake-Up: When Your Discount Ladder Turns Into a Snake
The facts (quick recap)
Straight from Microsoft’s own neighborhood watch (and summarized neatly by Fusion Connect):
Effective November 1, 2025, Microsoft ends tiered volume discounts (Levels B–D) for Online Services at EA/MPSA/OSPA renewal. Everyone pays Level A (list) pricing—yes, even you, global megacorp.
Price impact: larger enterprises could see up to ~12% increases; many mid-market orgs ~6–9%.
EAs under ~2,400 seats won’t be renewed; Microsoft will nudge these customers to CSP models.
Exceptions: On-prem pricing unchanged; Government and Education (GCC/EES) not affected.
Microsoft’s rationale: “standardized pricing,” more “transparency,” and—my favorite—alignment with the likes of AWS and Google Cloud.
That’s the setup. Now the reaction.
Why big enterprises will be furious
Large corporates built procurement strategies, budgets, and career plans on the EA discount ladder. Removing tiering does more than hike costs; it breaks the logic of “buy more, pay less.” Expect:
Budget shocks at renewal: models built on C/D tiers suddenly don’t foot. Finance will search for a culprit; it will find your name and Microsoft’s invoice.
Less negotiating leverage: no tiers means fewer knobs to turn. Procurement’s “hero moment” becomes a cost-containment apology tour.
“Growth into discounts” disappears: variable headcount orgs lose a natural buffer. Seasonal hiring now just costs… more.
Board optics: CEOs don’t love paying list price like a casual tourist. To them, this looks like market power flexing, not transparency.
Will Microsoft say this is abuse of dominance? Of course not. Will many large enterprises feel like it is? Absolutely. I suspect Microsoft knows many of their clients will pay this, but those same customers will resent this.
With the tiered pricing Microsoft at least pretended that it was a partnership. Now it’s abundantly clear that Microsoft has decided to not bother buying you dinner before robbing you. Perhaps in the grand scheme of things the extra cost can simply be written off as a cost of doing business. But I believe many clients will feel a rubicon has been crossed and that they will need to at least have a plan B, even if they choose not to take it, yet.
Abuse of dominance—or just “transparency”?
I’ve spent the better part of three decades watching markets harden around a single vendor’s gravity well. When a near-ubiquitous provider turns price complexity into price uniformity—and the net effect is that you pay more—that’s not what CFOs mean by “simplification.” It’s what my book Who Put That Idiot in Charge? calls a narrative pivot: rebrand a margin expansion as customer love.
Let’s be fair: AWS and Google Cloud preach list-price clarity too. But Microsoft isn’t just a cloud provider; M365 + Teams sit at the core of daily work. The line between productivity standard and regulatory eyebrow-raiser gets thinner when the “standard” also gets pricier in one stroke.
The opening for Google (and friends)
For the first time in ages, Microsoft just handed competitors a credible wedge. If I’m Google, here’s my three-move combination:
Procurement Relief
Offer EA-style predictability without the “surprise, it’s Level A for everyone.” Price bands tied to commitment, adoption milestones, and measurable outcomes (security posture, automation gains). CFOs want forecastability more than they want another glossy deck.Switching-Cost Arbitrage
Subsidize migration, change management, and coexistence. Bake in dual-running periods and interoperability guarantees. Make the first 120 days operationally safe and politically defensible for CIOs.Outcomes > Features
Compete on business outcomes—faster onboarding, lower security incidents, reduced SaaS sprawl—not checkbox features. (Chapter 4 of Competitive Intelligence Playbook if you want the playbook; bring coffee.)
Others can pile on: Zoom (room experiences + telephony), Slack/Salesforce (workflow gravity), Cisco/Webex (regulated industries), even specialist CSPs who can package flexibility and white-glove support that Microsoft’s scale struggles to match.
The 12-Vector opportunity (how to actually win)
Applying Excession Events’ 12-Vector System, here’s where rivals can poke holes today:
Pricing Architecture: Replace “one list for all” with outcome-based tiers.
Procurement Friction: Pre-approved paper, ≤2-week security review, CFO-ready TCO models.
Switching Costs: Tooling for mail/cal migration, policy mapping, and identity federation out of the box.
Ecosystem: Deep ISV bundles (security, compliance, archive) that neutralize Microsoft’s bundling advantage.
Service & Success: Named CSMs with adoption SLAs tied to rebates.
Governance/Compliance: Native controls and attestations matching M365 baselines to de-risk audit questions.
User Experience: Zero-learning-curve migration aids; “meet users where they are” coexistence.
Data & Telemetry: Prove productivity and security outcomes with observable metrics the CFO can trust.
Do these well and you’re not just cheaper—you’re easier to buy, safer to own, and harder to fire.
What C-suites should do now (defensive and offensive)
Model the delta: Assume Level A at renewal; quantify 1-, 3-, and 5-year OPEX lifts.
Scenario plan: Pilot Google Workspace + Meet or a CSP-optimized M365 package. Use real data.
Exploit CSP agility: Monthly billing, flexible seat management, and license hygiene to offset hikes.
Negotiate outcomes: Tie any commitment to adoption, security, or automation improvements—not just seats.
Communicate up: No CFO likes “surprise spend.” Pre-brief now; control the narrative later.
Visuals you can steal for the board deck
Before/After Price Ladder: A→D tiers collapsing to Level A (impact by headcount).
Budget Shock Waterfall: Renewal variance with CSP optimization offsets.
12-Vector Heatmap: Where alternatives over-index vs Microsoft.
Migration Risk Radar: Governance, identity, data, change-management mitigations.
Simon Dudley is a technology strategist, bestselling author, and former senior executive at Logitech, Lifesize, and Polycom. He leads Excession Events, helping companies win beyond price and features.
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