Microsoft Announcement for 2025: End of EA, Price Increases, and Microsoft Ignite

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In this article our Licensing Expert Floris Klaver shares his thoughts on several key Microsoft announcements and highlights for 2025 that were announced this month.

The End of the Enterprise Agreement? Key Changes Ahead

Microsoft has announced that, starting January 1, 2025, (some) cloud Enterprise Agreements (EA) in direct markets will no longer be eligible for renewal under the existing EA framework. At that time, Microsoft will begin notifying affected customers that renewal on the EA is no longer possible. Larger enterprise customers will have access to the Microsoft Customer Agreement for Enterprise (MCA-E), while others will transition to the CSP program.

Key points to consider

  • Indirect agreements remain unaffected (for now):
    Indirect EA agreements are not impacted at this stage. Additionally, EA deals currently under negotiation will remain valid for the first quarter of 2025. This suggests that Microsoft may delay enforcing the changes until later in their fiscal year, possibly not until the next fiscal year begins.
  • Expanded subscription options:
    Starting October 1, 2024, customers will be able to purchase software components like SQL Server, Windows Server, and System Center as subscriptions through MCA-E. Microsoft is expected to enforce the transition to subscription-based models early in 2025, particularly for customers without significant on-premises software needs.
  • MCA-E becomes the new standard:
    MCA-E will become the mandatory program for most customers, introducing an entirely new agreement structure. This means no operational support from licensing partners, a different price list (e.g., no price bands or ‘From SA’ options), and an OPEX-based licensing model with new rules. Reviewing the new terms and conditions against your current agreement is essential.

Our advice

  1. Contact your account team:
    Determine if your organization is among the affected customers.
  2. Understand the MCA-E program:
    Read up on its structure, terms, and conditions. We offer resources, including blogs and videos, to guide you through this transition.
  3. Evaluate your options:
    Assess how MCA-E might fit your needs and whether it could offer benefits. It’s a new model, and while Microsoft is pushing it, the pricing and benefits may vary depending on your specific circumstances.

Key considerations

Be cautious with MCA-E. This model excludes partner involvement, making it a “black box” with limited transparency. Comparing it to EA and CSP options is crucial to identify the best fit for your organization. We can’t stop change and innovation, but my gut feeling says that for larger organizations  (Level C and D EA) with heavily customized Enterprise Agreements, staying on the EA for one more term might be advantageous. The MCA-E currently lacks discounted price levels and contract flexibility for Terms and conditions.

Upcoming discounts

Interestingly, this announcement coincides with an upcoming promotion for all Microsoft Partners and customers purchasing through the CSP.

Starting January 1, 2025, Microsoft partners and CSP customers will have access to a 15% discount on Microsoft 365 E5 annual commitment subscriptions. This move reduces the financial impact of moving to CSP without ‘From SA’ entitlements and eases the transition to subscription-based pricing. From SA is not available in MCA-E or CSP (CSP is basically the same as the MCA but partner-led).

This approach makes transitioning from EA to CSP less financially painful if you switch to E5, as the significant premium on E5 licenses won’t hit immediately. Instead, the impact will be deferred. It’s a clever strategy by Microsoft to avoid difficult renewal conversations upfront. By softening the initial transition, they likely hope customers in CSP will more readily accept the 15% price increase later, rather than resisting when the loss of “From SA” entitlements becomes unavoidable. It will be interesting to see how Microsoft manages this shift.

Pricing and currency

The MCA-E model operates on a USD price list, offering billing in USD or the option to accept FX risk. Depending on your region, this could provide cost advantages, as the USD price list is often more attractive than regional equivalents like EUR.

Next steps

Many Microsoft customers will need to weigh all the pro’s and cons to determine their next move. 

We’re actively working with Microsoft to gather insights into the MCA-E model. By exploring scenarios and understanding how contracts will function, we aim to provide our clients with the information needed to make well-informed decisions.

Want to join this effort? Reach out to us today!

Upcoming Microsoft Price Increases

Here are the key pricing adjustments to be aware of:

Teams Phone

Starting April 1st, 2025, Teams Phone service will increase to $10 per user/month, a 25% rise. The Teams Phone Frontline Workers offer will also increase from $4 to $5 per user/month. Microsoft attributes these changes to the added value they’ve delivered to the product.

Power BI

From April 1st, 2025, Power BI Pro prices will rise by 40%, reaching $14 per user/month for monthly subscriptions. Power BI Premium will see a 20% increase, climbing to $24 per user/month. Microsoft cites over 1,500 product enhancements in the past six years as the reason for these adjustments.

RDS CAL

Effective November 1st, 2024, there is a 20% price increase for RDS CAL, aligning with broader pricing changes for Windows Server 2025 products. This adjustment has received limited publicity.

Copilot for M365 – New SKU Option

Starting December 1st, 2025, Microsoft will introduce a monthly SKU for Copilot for M365. However, annual billing commitments are still required, making this option more about reducing initial costs. Monthly billing for Copilot (including Copilot for Sales and Services) will carry a 5% premium.

Monthly Billing Premiums

From April 1st, 2025, all monthly billing options for annual commitment SKUs will include a 5% price premium. If you opt for monthly payments instead of upfront billing, expect this increase.

What this means for you

Take the time to review these pricing changes and their potential impact, especially if you have renewals or budgeting decisions coming up after April 1st, 2025. Planning ahead will help ensure a smooth transition to these new pricing structures.

Highlights Microsoft Ignite 2024

Microsoft Ignite Key Highlights

The Microsoft Ignite event, held from November 19th to November 21st in Chicago, was packed with exciting announcements, many of which focused on Microsoft’s strategic investments in AI. Below are the key takeaways:

Copilot updates

  • Microsoft 365 Copilot:
    • Can now analyze content presented in Teams meetings, including screen-shared content, offering a comprehensive meeting summary by combining spoken and written inputs.
    • Teams Chat Copilot can quickly summarize files shared in group chats.
    • PowerPoint Copilot updates include:
      • Narrative builder (convert documents into presentations).
      • Presentation translation.
      • Support for organizational image libraries.
    • OneNote Copilot can organize ideas from typed, handwritten, and voice notes.
    • Microsoft Places: An AI-powered tool to analyze workplace presence, recommend in-office days, manage bookings, locate employees, and provide space analytics.
    • Copilot Analytics: Part of the Copilot Control System, it offers data protection, management controls, and reporting. It includes Viva Insights to measure the business value of Copilot.

AI Opportunities

  • Microsoft released a new study with IDC, showing companies embracing AI could achieve up to 10x ROI.
    • Key findings:
      • Generative AI adoption rose from 55% in 2023 to 75% in 2024.
      • Average ROI: $3.7 per dollar invested.
      • Deployment timeline: less than 8 months to deploy and ROI within 13 months.
      • Highest ROI industries: Financial Services, Media & Telco, Mobility, Retail & Consumer Goods.

Azure Announcements

  • New AI Solutions:
    • AI scenarios added to the Cloud Adoption Framework and Azure Well-Architected Framework to assist with AI workload adoption.
  • Azure Local: A new hybrid infrastructure platform enabled by Azure Arc, now generally available, extends Azure services to distributed locations for mission-critical workloads.
  • HBv5 VM Series: A new virtual machine series for high-performance computing (HPC) workloads, coming in 2025.
  • Microsoft Fabric Updates:
    • Fabric Databases: SQL databases in preview to enhance app development and scalability, such as: build intelligent apps faster, boost productivity with auto-scaling databases that provision in seconds, accelerate innovation with Copilot in Fabric and enhance security posture.
    • AI Function in Fabric: Enables easy text-related tasks with minimal coding.
    • Agent Service: Connects enterprise data to AI skills in Fabric.
  • SQL Server 2025: In private preview, it supports AI applications with features like vector embeddings, real-time analytics, and enhanced query optimization.

Microsoft 365 Enhancements

  • Teams:
    • New features include transcription for multilingual meetings, live translated transcriptions, and intelligent meeting recaps.
  • Generative AI Controls:
    • Now in preview, these controls prevent oversharing sensitive data and provide alerts for risky AI use. These controls will allow users to choose the data used in summaries and responses, and alert them to sensitive or risky content. Microsoft Purview Data Loss Prevention (DLP) will help prevent accidental oversharing by configuring policies based on sensitivity labels. Additionally, Microsoft Purview Insider Risk Management will detect risky activities, providing organizations with more visibility into potential risks
  • Microsoft Intune:
    • Expanding core device hardware inventory capabilities across all major platforms (Windows to iOS, Android, macOS, Linux). Now in private preview.
    • Intune Advanced Analytics will allow admins to retrieve real-time data of online cloud-managed Windows devices and analyze device details across multiple devices.
    • Introducing new device actions like remote restarts and remediation scripts for enhanced security and efficiency.
  • Windows 365 Updates:
    • Microsoft is enhancing its cloud-based solutions with new features for Windows 365 and Azure Virtual Desktop.
    • “Shared mode” for secure, temporary Cloud PC access.
    • Improved data protection with Customer Lockbox.
    • Azure Virtual Desktop updates feature integration with partner app delivery solutions, support for Microsoft Application Virtualization (App-V) packages, and enhanced host pool management. Both platforms will also see improvements in security, authentication, and management.
  • Windows 365 Link:
    • Microsoft is introducing Windows 365 Link, a new device designed to connect securely to Windows 365 in seconds, enhancing cloud-based work environments.
    • A $349 device for secure, instant connection to Windows 365, launching in April 2025 in select markets.
    • Windows 365 Link is secure by design, with no local data or apps, and features passwordless authentication. The device will be managed via Microsoft Intune. Organizations in select countries can apply for the preview program starting today.

Power Platform Updates

  • Preview updates to the Power Platform Admin Center include:
    • New pages for managing low-code assets, exploring resources, and assisting with agent adoption in Microsoft Copilot Studio. Users will also be able to manage capacity and licenses, monitor reliability, and optimize latency. 
    • Enhanced security features providing visibility, recommendations, and controls for IT admins.

The announcements reflect Microsoft’s ongoing focus on leveraging AI and enhancing productivity tools across its ecosystem. If you’re looking to capitalize on these innovations, it’s a good time to explore how they align with your organization’s needs!