Upcoming Microsoft Pricing Changes for 2024-2025: What You Need to Know

Microsoft is rolling out several significant updates to its licensing and pricing models within the Cloud Solution Provider (CSP) program. These changes will take effect across 2024 and 2025, so now’s the time to prepare and strategize for these new pricing adjustments.

As a trusted Microsoft Solutions Partner with years of experience helping organizations optimize their Microsoft licensing, CloudServus has the expertise to guide you through these upcoming shifts. Let’s dive into the key changes and how they could impact your organization.

Change #1: Monthly Billing for Microsoft 365 Copilot Available Soon

Starting December 1, 2024, Microsoft 365 Copilot will have an annual subscription term with a monthly billing option available in the CSP program. This provides more flexibility, allowing organizations to pay monthly instead of an upfront annual payment.

However, this added flexibility comes with a 5% premium over the traditional annual billing price. If monthly billing aligns better with your financial strategy, this option might be worth considering.

Change #2: Pricing Increases on Key CSP Licenses for Annual Term Customers Paying Monthly

Effective April 1, 2025, Microsoft will implement a 5% price increase on all annual subscriptions with monthly billing plans. These include popular products such as Microsoft 365, Office 365, and Dynamics 365. This increase means that organizations that have committed to an annual term with monthly billing cycles could see a notable uptick in their IT budgets.

The good news for annual term customers paying monthly that have renewals prior to April 1, 2025 is that this change will not affect the cost of the subscriptions they are renewing until their next annual renewal in 2026. A strategic review may be necessary to evaluate whether a shift to annual billing or other configurations could offer cost savings.

Change #3: Power BI and Teams Phone Pricing Increases

Effective April 1, 2025, Power BI Pro and Teams Phone licenses will see substantial price adjustments. Here are the upcoming price increases for annual term customers paying annually:

• Power BI Pro: Increasing from $120 to $168 per user
• Power BI Premium Per User: Increasing from $240 to $288 per user
• Teams Phone Standard: Increasing from $96 to $120 per user

This pricing update will go into effect for all new and renewing CSP subscriptions starting April 1, 2025 which means that customers with annual renewals of these subscriptions

prior to this date will not be affected until their next annual renewal. Currently, there are no planned pricing increases for customers who purchase Power BI or Teams Phone through Microsoft 365 E5 or Office 365 E5 annual term subscriptions with annual billing.

Change #4: New Microsoft 365 E5 and Copilot Promotions

Microsoft is introducing limited-time discounts on Microsoft 365 E5 and Microsoft 365 Copilot:

• Microsoft 365 E5 Promotion: From January 1 to June 30, 2025, eligible customers can receive 15% off the net price on annual subscriptions. This offer applies to new Microsoft E5 customers only for up to 2,400 licenses.
• Microsoft 365 Copilot Promotion: Between September 1 and December 31, 2024, customers can lock in a 15% discount on Microsoft 365 Copilot for up to 300 licenses. This offer applies to new Microsoft 365 Copilot customers only. Importantly, organizations that start a subscription within the promotional period can add more licenses at the same discounted rate for the entire annual term.

Understanding the Impact on Your Microsoft Licensing Costs

These pricing updates may affect your budget planning and purchasing strategies, especially if you’re on a monthly billing cycle. For instance, companies with larger user bases could see a significant rise in their annual costs due to the monthly billing premium. With these changes on the horizon, now is an ideal time to review your licensing agreements and explore ways to optimize your costs.

How CloudServus Can Help

At CloudServus, we understand that adapting to Microsoft’s evolving licensing structures can be complex. Our team of experts is here to provide the guidance you need to make informed decisions and minimize the financial impact. Here’s how we can support you:

1. Comprehensive Licensing Assessment 
   Our licensing specialists will assess your current agreements, identify potential savings, and ensure that you’re right-sizing your licenses to align with Microsoft’s updated pricing model.
2. Proactive Budget Planning and Forecasting
   With a strategic budget in place, you can navigate these changes with confidence. CloudServus consultants will work with you to develop a budget plan that accounts for price increases and avoids unexpected expenses.
3. Ongoing Support and Consultation
   As your partner, we’ll help you transition smoothly, whether you’re adjusting to a new billing model or making changes to avoid cost increases. Our team is here to provide continuous support so you’re prepared for future adjustments.

Get Ahead of the Changes Today

With these upcoming changes, a proactive approach can make all the difference. Contact CloudServus today for a Microsoft Licensing Assessment, and let us help you optimize your licensing strategy to fit your budget and business goals.