The ripple can be felt all across the IT sector as Microsoft introduces a change to its licensing model. The recent change has been about online services acquired through Enterprise Agreements (EA). On August 12, 2025, Microsoft announced the removal of additional discounts that were previously offered with EA renewals for cloud services, beginning November 1, 2025.
In layman’s language, the price advantage for EA customers that used to come with online services will no longer be accessible.
This update must have your attention if you are a partner, a business renewing its EA, or even a customer assessing your licensing options. Let’s break down what’s changing, why it’s significant, and how you can turn it into an opportunity.
What’s Actually Changing?
Before this update, EA customers were provided with built-in discounts for cloud services like Microsoft 365, Dynamics 365, and other online solutions. This discount was one of the strongest reasons enterprises stuck with EA renewals.
Now, starting in November, those discounts will no longer apply when it’s time to renew. All EA levels are affected, whether you are a small or mid-sized business on a minimum entry-level EA or a large global enterprise with a high-tier agreement.
One thing to note: this does not affect on-premises software licensing. The change applies only to cloud-based services.
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Why Does This Update Matter?
At first glance, this might feel like bad news for EA customers. However, looking deeper, the change is meant to level the playing field. Here’s why:
- A More Even Starting Point
Until now, EA pricing and CSP (Cloud Solution Provider) pricing have often created tension. CSP partners sometimes struggled to compete because EA discounts gave enterprises a financial advantage. Now, both models start at the same baseline as those discounts have been eliminated.
- More Room for CSP Partners to Add Value
For CSP partners, this is a golden window. Enterprises renewing an EA might now look elsewhere, and CSP becomes a strong alternative. CSP offers services beyond licensing. CSP comes with flexibility, tailored support, and often a wider range of services.
- Customers Get More Choice
Now that additional discounts have been eliminated, customers are free to consider CSP without stressing about the cost-saving opportunity they may lose. With this unbiased consideration, customers can make a move toward a model that better aligns with their growth, budget, and IT strategy.
The Opportunity for CSP Partners
Let’s be honest: customers don’t just buy licenses anymore. They seek comprehensive solutions. That’s where CSP partners have the chance to shine.
- Go Beyond Licensing Show customers how CSP allows you to wrap services like governance, security, cost management, and ongoing support into one package.
- Be a Trusted Guide Microsoft licensing seems like a complicated option for enterprises. You can simplify this procedure and position yourself not only as a seller but also as a strategic advisor.
- Focus on Flexibility CSP gives businesses more options for scaling up or down, which can be very appealing compared to the long-term commitments of EA.
In other words, don’t just compete on price. Lead with value.
Making the Transition Smooth
EA customers shall now be concerned about the complications that come with switching licensing models. However, we must inform you that the right distributor can make the migration process not just smooth but fast as well.
CSP partners can ease the transition by:
- Working with distributors who provide ready-made migration frameworks.
- Ensuring continuity of services during the switch.
- Offering managed support so the customer feels cared for, not just sold to.
The message to customers is simple: moving from EA to CSP doesn’t have to be a headache.
Who Is Impacted Most?
The update is not going to impact any particular segment of customers, but all tiers of EA need to pay attention.
- Mid-market businesses that entered EA for cloud solutions may now find CSP more attractive.
- Large enterprises with global agreements will likely revisit their strategies, especially if they seek adaptability.
- Smaller EA customers who were already on the fence now have more reason to consider switching.
This wide impact means CSP partners can engage in new conversations with nearly every EA customer segment.
Steps You Should Take Now!
The clock is already ticking toward November. And, as a CSP partner, you must make the move now. Here’s how to prepare:
- Map your EA customers. Identify the customers who have their renewals upcoming in 12 to 18 months.
- Start conversations early. Place CSP as an equal alternative with added benefits.
- Highlight your services. Beyond licenses, talk about security, governance, support, and managed solutions.
- Work with the right distributor. Deliver a promising, smooth transition without disruptions.
- Educate your customers. Many customers do not yet know about this update. You can win the trust of your customers as you inform them first.
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Final Takeaway!
The EA discount removal by Microsoft for online services is more than just a change in pricing. It is a critical step towards regaining the balance between EA and CSP, giving partners a real chance to showcase their value.
Customers no longer need to stick to EA only for cost savings. They are free to explore options like CSP without the guilt of giving up cost benefits.
This is a significant step for partners as they get real solutions that make licensing simpler, services richer, and business outcomes stronger.
The latest changes in the industry are not meant to be unsettling with the right partner on your side. At IFI Tech, we offer you comprehensive professional support as the industry evolves and you need to adapt.
