In this article we analyze Microsoft’s latest move: the standardization of online services pricing in EA and MPSA contracts and the resulting elimination of discount levels. We’ll explore who will be impacted and what actions can be taken to reduce the effect of this change on IT costs.
For years, organizations subscribing to the Enterprise Agreement (EA) — Microsoft’s multi-year enterprise committed licensing contract (we’ve explained the various contract types elsewhere) — expected a significant advantage: the Price Level benefits, meaning lower unit prices as purchase volumes increased.
In recent years, however, Microsoft has progressively reduced these benefits, with the latest step announced in August 2025. Below is a timeline of the major changes:
And that’s not all: earlier this year, Microsoft also announced that some customers will no longer be offered the option to renew the EA contract. We discussed it here.
With these changes, the gap between EA, Cloud Solution Provider (CSP) and Microsoft Customer Agreement for Enterprise (MCA-E) is narrower than ever.
What are Price Levels (A–D) and why they matter
The EA model included four price levels, defined based on the number of licenses or committed users:
The official Microsoft page on the Enterprise Agreement indicates an overall discount between 15% and 45%, without specifying the breakdown by level. However, independent analyst benchmarks (e.g., Redress Compliance, 2025) estimate:
The advantage was significant because discounts applied to all licenses and services (waterfall pricing). Moving up a level meant achieving a general saving on the entire contract — this was the main reason many large organizations opted for EA: cost predictability, savings, and budgeting simplicity.
Customers who currently benefit from lower prices due to belonging to Level B, C or D will, upon the next contract renewal or at the time of purchasing new online services not listed in the Customer Price Sheet after November 1, 2025, see their pricing realigned to Level A, meaning the public price indicated on Microsoft.com.
In practice, the cascading discounts that historically represented one of the main financial advantages of the Enterprise Agreement and the Microsoft Products and Services Agreement will be gone.
This move will have a significant impact especially on:
However, the following remain excluded from this change: the Education sector globally, U.S. Government, and customers who purchase only on-premises software.
If your organization is close to renewing an Enterprise Agreement (EA) or a Microsoft Products and Services Agreement (MPSA), and a significant part of your savings depends on price level discounts, now is the time to reassess your strategy.
From November 1, 2025, these benefits will no longer be available for online services: the pricing will be the same for all levels A–D. This means that if your current budget is based on reduced prices due to Level B, C or D, at the next renewal you may face an increase in unit costs.
To understand the impact, let’s take Microsoft 365 E3 as an example at the public price of €35.70 per user/month, where a company with 5,000 users would spend around €2.14 million per year without discounts. Here are the levels currently offered in EA considering average discounts:
In other words, for large organizations, moving from Level A to Level D could mean more than €600,000 in annual savings on just one service like M365 E3 — an advantage that, from November 2025, will no longer apply to online services.
At this stage, it is wise to:
At WEGG, we are consultants specialized in Microsoft licensing. We can help you reassess your EA or MPSA contracts, negotiate renewals effectively, and optimize license usage to reduce costs and maximize the value of Microsoft solutions within your organization.
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