Navigating Microsoft Licensing Updates for 2025

Navigating Microsoft Licensing Updates for 2025

Microsoft is rolling out significant licensing changes in 2025, impacting Power BI, Teams, Cloud Solution Provider (CSP) programs, and Enterprise Agreements (EAs). From Power BI price increases to Copilot licensing updates, these shifts require strategic planning. KontractOne, your trusted partner for Microsoft licensing solutions, offers actionable insights to help you adapt and optimize costs.

Power BI and Teams Price Increases in 2025

Microsoft has confirmed price increases for 2025, effective April 1, 2025, targeting individual licenses:

  • Power BI Professional Per User: 40% increase
  • Power BI Premium Per User: 25% increase
  • Teams Phone Standard Per User: 30% increase

The Microsoft 365 E5 (M365 E5) license remains unchanged, narrowing the cost gap with M365 E3. This shift could make M365 E5 a smarter choice for organizations needing advanced features. Currently, a 30%–35% discount on M365 E5 aligns it with M365 E3 renewal pricing.

Purchase Power BI licenses or Teams Phone subscriptions before April 1, 2025, to lock in current rates and avoid the 2025 Microsoft price hikes.

Microsoft Currency Adjustments for 2025

Effective February 1, 2025, Microsoft will adjust pricing in select currencies:

  • Brazilian Real (BRL): 12% increase for cloud and on-premises licenses
  • British Pound (GBP): 5%–6% reduction for cloud licenses (on-premises unchanged)

These Microsoft licensing updates reflect global economic trends, impacting budgeting for multinational organizations.

CSP Updates: What’s Changing in 2025?

Starting April 1, 2025, Microsoft’s Cloud Solution Provider (CSP) program introduces a 5% uplift for one-year commitments with monthly payments. The one-year upfront payment and one-month commitment options remain unaffected.

  • Copilot Licensing in CSP: Since December 1, 2024, a one-year monthly payment option for Copilot includes the 5% uplift. A one-month Copilot option is still unavailable.

Renew your CSP agreement before April 1, 2025, to delay the CSP pricing uplift until 2026.

Copilot Licensing and M365 E5 Discounts

Adding Copilot to Enterprise Agreements (EAs) offers 5%–10% discounts, with deeper savings when paired with M365 E5. A minimum of 300 Copilot licenses is required for these benefits. This reflects Microsoft’s push for AI-driven licensing adoption in 2025.

Enterprise Agreement (EA) Transitions in 2025

Microsoft’s EA licensing changes begin January 1, 2025, with some cloud EAs shifting to CSP or Microsoft Customer Agreement – Enterprise (MCA-E) programs.

  • Unclear Scope: Details on affected customers, regions, and timelines remain vague. While rumors suggest an EA phase-out, no official end date exists.
  • Pricing Alignment: Cloud pricing under EA Level A, CSP, and MCA-E is comparable.
  • EA Challenges: Levels B–D customers with discounts or amendments face uncertainty, as CSP and MCA-E exclude these terms and on-premises Software Assurance (SA) licenses.

Example: “From SA” discounts (15% off for cloud transitions) may not transfer, and Microsoft has yet to clarify solutions.

Licensing Solution Provider (LSP) Trends for 2025

The LSP channel is shifting as EA partner fees drop to 1%–10% (from 20%–30% historically). Key trends include:

  • Service Focus: Partners earn more on consumption (e.g., focus products) than mainstream licensing.
  • Industry Shifts: Mergers like SoftwareOne with Crayon and Softchoice’s acquisition by World Wide Technology may impact service. Ask your LSP how this affects your Microsoft licensing strategy.
  • Partner Challenges: Declining expertise and turnover are common complaints. Switch partners via a Change of Channel Partner (COCP) form with a 90-day transition.

CSP vs. MCA-E: Which Suits Your 2025 Needs?

  • CSP: Includes partner support for licensing and technical queries.
  • MCA-E: Direct Microsoft engagement, no partner involvement.

For complex Microsoft licensing changes in 2025, a CSP partner adds value.

KontractOne’s Recommendations for Microsoft Licensing in 2025

Prepare for Microsoft licensing updates with these steps:

  1. Beat the Price Hikes: Secure Power BI, Teams, and CSP licenses before April 1, 2025.
  2. Assess EA Status: Ask your Microsoft rep if your EA transitions to CSP or MCA-E in 2025. Key questions:
    • How will EA amendments and discounts be honored?
    • Who handles MCA-E licensing support?
    • Will I get a dedicated rep?
  1. Partner with KontractOne: Leverage our Microsoft licensing experts to benchmark pricing and negotiate the best terms.