Microsoft to Eliminate Enterprise Discounts on Microsoft 365 Subscriptions and Cloud Apps in November

Microsoft plans to eliminate enterprise discounts on Microsoft 365 subscriptions and cloud apps, potentially raising customer costs by 6% to 12%. The change, effective November 1, aligns enterprise pricing with Azure's model and promotes channel transparency. This move aims to boost Microsoft's margins by leveraging its pricing power, as the company continues to accelerate momentum in its cloud and AI businesses.

Microsoft has announced plans to eliminate enterprise discounts on Microsoft 365 subscriptions and cloud apps, effective November 1. This move, aimed at aligning enterprise pricing with Azure's model and promoting channel transparency, could raise customer costs by 6% to 12% [1].

The change follows Microsoft's ongoing efforts to standardize pricing across all purchasing channels, a strategy that has already been implemented for services like Azure. This update aims to simplify licensing and improve pricing clarity for customers [2].

Lane Shelton, vice president of licensing consulting and IT asset management at SHI, a Microsoft partner, told CRN that the elimination of volume discounts "changes the dynamic of the relationship between the customer and Microsoft." He expects the change to encourage earlier customer renewals to avoid potential price increases [1].

The pricing adjustment will impact customers who purchase online services through volume licensing programs, including Microsoft 365, Dynamics 365, and Windows 365. The change will apply starting November 1 at the customer's next agreement renewal or when new services are purchased [3].

Microsoft's stock has climbed 20% year-to-date, driven by momentum in its cloud and artificial intelligence businesses. The company's AI tool Copilot, for instance, was introduced without per-level discounts, selling for $30 a user a month regardless of user count [1].

The elimination of enterprise discounts is part of a broader strategy by Microsoft to push customers towards its Cloud Solution Providers (CSP) program, which many partners participate in. This move could lead to higher revenue per user by promoting Copilot add-ons and premium plans, as Microsoft 365 seat growth has remained below 10% since 2023 [1].

Microsoft's latest guidance called for double-digit revenue growth when reported with fourth-quarter earnings on July 30, reflecting the pricing shift. The company's exclusive licensing deals and access to OpenAI's models have boosted its Azure cloud business and are driving its market value toward $4 trillion [1].

References:
[1] https://www.crn.com/news/cloud/2025/microsoft-to-end-certain-volume-licensing-discounts-in-potential-csp-boost
[2] https://www.benzinga.com/markets/tech/25/08/47254185/microsoft-ends-enterprise-discounts-on-microsoft-365-cloud-apps-in-november
[3] https://www.techradar.com/pro/microsoft-is-tweaking-its-enterprise-software-pricing-once-again-and-some-customers-wont-be-too-happy