Microsoft CSP Pricing Changes: What You Need to Know

As part of Microsoft’s global pricing harmonisation strategy, several changes to cloud subscription (CSP) licences will take effect in 2025. 5% price reduction will apply to all CSP licences renewing after this date. This includes Business Basic, Business Standard, and Business Premium plans. Now, I know what you’re thinking: a price reduction in February followed by a price increase in April? But stick with me—it’ll all make sense shortly. Here’s a breakdown of the key changes, their implications, and our recommendations to help you plan ahead.

Key Changes

1. From 1st February 2025:
   • A 5% price reduction will apply to all CSP licences renewing after this date. This includes Business Basic, Business Standard, and Business Premium plans.
2. From 1st April 2025:
   • A 5% price increase will apply to 12-month commitment licences with monthly billing periods.
   • Teams and Power BI licensing will also see a price increase for subscriptions renewing after this date.

Understanding Subscription Options

Microsoft offers three primary subscription models for CSP licences, each with distinct benefits and limitations. Let’s break them down further to help you decide what’s best for your business.

Monthly Subscriptions provide the highest degree of flexibility. If your organisation experiences regular changes in staffing or varying licensing needs, this option allows you to scale licence quantities up or down on a monthly basis. Additionally, you have the freedom to switch between licence types depending on your requirements. However, this flexibility comes at a cost—monthly subscriptions incur a 20% premium over annual plans, and you’ll be exposed to potential price increases as they can fluctuate within a single month.

Annual Subscriptions Billed Monthly strike a balance between cost savings and commitment. By opting for this model, you can save 15% compared to monthly subscriptions, and your pricing is protected throughout the 12-month term. However, it’s important to note that this model requires you to commit to a set number of licences for the entire year, which may not suit businesses that need to adjust licence quantities frequently.

Annual Subscriptions Billed Annually offer the greatest cost efficiency. This option provides a 20% saving over monthly subscriptions and an additional 5% saving compared to annual subscriptions billed monthly. Pricing remains locked in for the full term, shielding your business from any price increases during the year. While this is the most cost-effective choice, it comes with the same commitment constraints as the monthly-billed annual option, requiring you to carefully evaluate your licence needs in advance.

Our Recommendations

1. For Existing Licences: Review your current monthly subscriptions and consider switching to an annual subscription before 31st March 2025. This will enable you to save up to 20% while securing current pricing and protecting your business from upcoming increases.
2. For New Licences: If you’re planning to purchase new licences, aim to do so between 1st February and 31st March 2025. This window allows you to take advantage of the 5% price reduction before the April price adjustments take effect.
3. Teams and Power BI Licences: With a price increase on the horizon from 1st April 2025, we recommend renewing or purchasing these licences early to avoid additional costs.

Need Assistance?

Our team is here to help you navigate these changes. Whether you need advice on optimising your licensing strategy or assistance transitioning to more cost-effective plans, we’re just a call or email away. Make the most of this opportunity to review your licences and secure the best value for your business. For further information please get in touch with your Account Manager.

By Stephen Ayers, Head of Products and Vendors