Microsoft Licensing: What's Changing?
Big changes are coming to Microsoft licensing, starting December 2024. From new billing options to pricing updates, these changes could impact your costs and operational flexibility.
But you don’t have to navigate this alone. As a trusted Microsoft CSP partner, we’re here to help you take control of these updates and turn them into opportunities to save, optimise, and grow.
Key Updates You Need To Know.
On April 1, 2024, Microsoft is introducing a new lineup of commercial Microsoft 365 and Office 365 suites that don’t include Teams in regions outside the EEA and Switzerland, and a new standalone Teams offering for Enterprise customers in those regions.
They are also ending the sale of net-new subscriptions to existing Microsoft 365 E3/E5 and Office 365 E1/E3/E5 Enterprise SKUs with Teams across all channels. All new Microsoft 365 and Office 365 Enterprise customers will need to choose from new offers. Existing customers who wish to continue using suites to which they have already subscribed can do so (including renewal, upsell, and license adds).
Here’s how you might be impacted:
- Net new subscribers to Office/Microsoft 365 Enterprise suites who wish to provide their end users with Teams will need to purchase two SKUs: Microsoft Teams Enterprise, plus either the Microsoft 365 (no Teams) or Office 365 (no Teams) suite.
- Existing customers who wish to continue using SKUs to which they have already subscribed can continue to use, renew, upgrade, and add licenses to their current plans. If an existing customer wishes to switch to the new lineup of suites without Teams, they can do so on their contract anniversary or renewal.
New Monthly Billing Options for Microsoft 365 Copilot.
Starting December 1, 2024, Microsoft will introduce monthly billing for annual subscriptions of:
- Microsoft 365 Copilot
- Microsoft 365 Copilot for Sales
- Microsoft 365 Copilot for Services
While providing payment flexibility, this option comes with a 5% higher cost compared to annual upfront billing.
Standardised Pricing Across Monthly Billing Plans.
From April 1, 2025, monthly billing for annual subscriptions will also be priced 5% higher across all products, aligning with a consistent billing structure for Microsoft 365, Office 365, and others.
Price Increases for Microsoft Teams Phone and Power BI
Effective April 1, 2025, prices for standalone licenses will increase:
- Teams Phone Standard: £8.00 per user/month
- Power BI Pro: £11.20 per user/month
- Power BI Premium Per User: £19.20 per user/month
(Note: These prices apply to annual billing. Monthly billing will incur the additional 5% increase.)
Changes to Enterprise Agreements (EA)
Starting January 1, 2025, some Enterprise Agreements will no longer be eligible for renewal. Customers will transition to the Microsoft Customer Agreement for Enterprise (MCA-E), offering a more streamlined purchasing experience. Microsoft intend to notify impacted clients directly.
AI Promotions: Helping You Get AI Ready
New customers can receive 15% off Microsoft 365 E5 annual commitment subscriptions from January 1, 2025. This promotion supports businesses in adopting advanced security, compliance, and AI capabilities.
How These Changes Impact You.
These updates bring both challenges and opportunities:
- Increased Costs: Budget planning will need adjustments for products affected by the price changes.
- Payment Flexibility: Monthly billing for annual subscriptions offers greater cash flow control but at a slightly higher cost.
- Transition Planning: Businesses on legacy agreements, like EA, may need to move to MCA-E or CSP.
- AI-Driven Opportunities: Take advantage of promotions to adopt cutting-edge solutions like Microsoft 365 E5 at a discount.
Our team is ready to provide tailored recommendations based on your specific needs.
What Should You Do Now?
Assess Your Current Licenses
Review your active subscriptions. Are you using all purchased licenses? Are there opportunities to optimise?
Consider Annual Billing
Lock in lower pricing by moving to annual upfront payments where possible.
Explore AI Productivity
Evaluate Microsoft 365 E5 to unlock AI-powered tools with built-in security and compliance.
Plan for April 2025 Changes
If you use Power BI or Teams Phone, budget for the new pricing structure and assess whether bundled solutions (e.g., Microsoft 365 E5) offer better value.
Leverage Available Promotions.
AI Readiness Promotion.
Starting January 1, 2025, receive 15% off Microsoft 365 E5 annual subscriptions for eligible customers. Contact us to learn how this can support your business goals.
Frequently Asked Questions.
What products are affected by these price changes?
The updates apply to products with annual term subscriptions and monthly billing plans across categories, including:
- Microsoft 365 (Business and Enterprise plans).
- Office 365 (Business and Enterprise suites).
- Enterprise Mobility + Security (EMS).
- Windows 365.
- Dynamics 365 Services (e.g., Sales, Customer Service).
- Microsoft Power Platform (e.g., Power BI, Power Apps).
- Other Microsoft Online Services with monthly billing options for annual terms.
For a full list of products, contact us for guidance.
What is changing with Microsoft 365 Copilot?
Starting December 1, 2024, customers can choose a new monthly billing option for annual subscriptions of:
- Microsoft 365 Copilot
- Microsoft 365 Copilot for Sales
- Microsoft 365 Copilot for Service
This new option provides payment flexibility but will cost 5% more than the annual upfront payment option.
How does the standardised pricing update affect me?
Beginning April 1, 2025, monthly billing plans for all annual subscriptions will be priced 5% higher than annual upfront payments.
This applies to new and renewing subscriptions across most Microsoft services, including:
- Microsoft 365 and Office 365 plans.
- Dynamics 365 Services.
- Power Platform.
You can avoid the increase by switching to annual upfront billing at renewal.
How can I reduce the impact of these increases?
Here are a few steps you can take:
- Switch to Annual Billing: Lock in the current pricing by committing to annual upfront payments.
- Optimise Licenses: Review and reduce unused or unnecessary licenses.
- Consider Bundles: Products like Microsoft 365 E5 include many features at a consolidated cost.
- Take Advantage of Promotions: Explore offers like 15% off Microsoft 365 E5 for new customers starting January 2025.
What’s changing with Enterprise Agreements?
From January 1, 2025, some Enterprise Agreements will no longer be eligible for renewal. Affected customers will transition to the Microsoft Customer Agreement for Enterprise (MCA-E), offering a more streamlined purchasing experience.
For businesses seeking additional support, the Cloud Solution Provider (CSP) model remains an option, providing a partner-driven approach for added value.
What should I do next?
Here is what we would recommend:
- Review your subscriptions: Identify any plans with monthly billing to assess cost impacts.
- Evaluate your licensing needs: Consider if switching to annual billing or bundling services better meets your requirements.
- Engage with us: We can provide a personalised review to help you optimise your licensing strategy.
Why Work With Us?
Microsoft’s licensing changes can feel overwhelming—but they don’t have to be. Partnering with 848 Group means gaining a trusted advisor who simplifies the complexity for you.
- Save money by optimising your licenses and locking in the best pricing.
- Stay ahead of changes with proactive planning and expert advice.
- Gain confidence that your licensing strategy aligns with your goals.
With 848 Group by your side, you can turn these updates into opportunities for efficiency and growth.
Get Started Today.
Don’t wait until these changes impact your bottom line – act today. Our experts will review your current licenses and recommend a tailored plan to save you money and improve your setup.