Microsoft recently announced several changes ahead of its annual Ignite conference that will take place November 18-22, including updates to its Enterprise Agreement (EA) and billing plans for its Copilot and Microsoft 365 products.
We will go through Microsoft’s announcement in order to break down the upcoming changes that might affect your organization in 2025.
Enterprise Agreement (EA)
Starting January 2025, some direct market cloud Enterprise Agreements (EAs) will no longer be eligible for renewal under the current EA framework. Microsoft will begin notifying these affected customers that renewal on the EA is no longer possible in the beginning of 2025.
This change means that these affected organizations will need to transition to the Cloud Solution Provider (CSP) program or adopt the Microsoft Customer Agreement for Enterprise (MCA-E).
This decision by Microsoft aims to strengthen its partner ecosystem in the Small and Midsize Customer (SMC) segment. Nicole Dezen, Chief Partner Officer and Corporate Vice President, Global Partner Solutions, highlighted the importance of this shift by stating, “This year, we allocated 70% of our total partner incentives to SMC, sending a strong message to our partners that Microsoft is committed to supporting them in addressing these customer needs.”
New Microsoft 365 Copilot Billing Option
Beginning December 1, 2024, a new monthly billing plan will be introduced for annual subscriptions of Microsoft 365 Copilot, Microsoft 365 Copilot for Sales, and Microsoft 365 Copilot for Service on the new commerce platform. However, this monthly billing option will be priced 5% higher than the upfront annual payment plan for these subscriptions.
Pricing Update
Starting April 1, 2025, all new and renewing monthly billing plans for annual subscriptions will have a 5% price increase compared to the annual billing option. This change applies to all products with per-user monthly billing plans for annual subscriptions and aims to standardize the billing structure across Buy Online, CSP, and MCA-E.
Customers will have the option to switch their billing plans from monthly to annual for their annual subscriptions at the time of renewal. Starting April 1, 2025, for end-of-sale (EOS) and EOS with Conversion offers like Microsoft 365 E3/E5 and Office 365 E1/E3/E5 suites with Teams, customers can adjust the billing frequency for their annual subscriptions at renewal. Trials will continue to default renewing into annual subscriptions with monthly billing. However, beginning in April 2025, partners will be able to specify values such as license quantity, term length, and billing frequency for the paid subscriptions that their trial purchases renew into. Additionally, partners will have the option to prevent their trials from automatically renewing.
This change in the billing plans is designed to continue offering customers flexibility in managing their cash flow while upholding the value and benefits of Microsoft’s services. By standardizing the billing structure, Microsoft wants to streamline uniformity and transparency across all platforms.
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