EA vs CSP Cost Comparison: Which Microsoft Licensing Model Saves More in 2025?
Microsoft’s Enterprise Agreement (EA) and Cloud Solution Provider (CSP) programs are two primary licensing models, each with different cost implications.
In 2025, cost considerations will have taken center stage due to Microsoft’s pricing shifts. Comparing Microsoft EA vs. CSP costs is crucial for CIOs, CFOs, and procurement leaders seeking to maximize Microsoft licensing cost savings in 2025. For a full overview – Microsoft EA vs CSP: The Ultimate Guide
Recent changes – notably the removal of EA’s tiered volume discounts for online services effective November 2025 – mean the cost dynamics between EA and CSP are closer than ever. EA was once the go-to for achieving big savings at scale, but now enterprises of all sizes must reassess which model delivers the most value.
This comparison breaks down how each model impacts budgets, highlights Microsoft’s 2025 pricing changes, and provides scenario-based analysis for organizations with 1,000 seats, 5,000 seats, or more than 15,000 seats.
The goal is to reveal the differences in EA vs. CSP pricing and help determine which model yields the greater savings in 2025, depending on an organization’s scale and needs.
For more insights on CSP, read Microsoft CSP Licensing: Flexibility, Pricing & Best Use Cases.
Why Cost Comparison Matters in 2025
Microsoft’s pricing changes in 2025 have leveled the playing field. Historically, larger enterprises have enjoyed automatic EA volume discounts (Levels A–D pricing), which made EA significantly cheaper per license. However, as of November 2025, Microsoft is eliminating these tiered discounts for cloud-based online services.
This means that whether you have 500 users or 15,000 users, the EA price per license will start at the same flat rate for online services, with no built-in bulk discount. Level B, C, and D customers who once enjoyed 6%, 9%, or even 12% lower pricing will see those automatic savings disappear. In short, EA’s traditional cost advantage at scale is eroding.
At the same time, Microsoft has been shifting its sales strategy. EA is now primarily aimed at very large customers (around 2,400+ seats). Organizations below roughly 2,400 users are increasingly funneled toward CSP or the newer Microsoft Customer Agreement (MCA-E) instead of being offered a new EA. CSP, on the other hand, is accessible to organizations of all sizes with no minimum seat count.
This convergence in pricing and the change in eligibility mean enterprises must re-evaluate their cost strategy. The question of EA vs CSP is no longer obvious — the answer now depends on scale, usage stability, and how these models fit your organization’s profile.
Ultimately, cost comparison matters in 2025 because Microsoft’s models are converging in terms of price. CIOs and CFOs can’t assume the old rules (EA is always cheaper for big companies, CSP only for small) hold. You need to scrutinize which licensing model yields greater cost efficiency under the new rules, and possibly prepare to negotiate or mix models to achieve the best outcome.
How Microsoft EA Pricing Works
The Enterprise Agreement (EA) is a three-year licensing contract with Microsoft, designed for large organizations. Here’s how EA pricing works and affects costs:
- Three-Year Contract & Upfront Commitment: When you sign an EA, you commit to a set of Microsoft licenses for a 3-year term. You typically make annual payments (or upfront) rather than month-to-month payments. This long-term commitment is rewarded with price protection and historically with volume discounts.
- Volume-Based Discount Levels (Historically): Traditionally, EA offered programmatic discounts in tiers (Levels A, B, C, D) based on the number of users/devices. For example, Level A covered roughly 500–2,399 users, Level B 2,400–5,999, Level C 6,000–14,999, and Level D 15,000+. At higher levels, the EA could deliver 15% to as much as 45% off standard pricing (the upper end for the largest, enterprise-wide commitments). This meant big enterprises automatically paid less per license than smaller ones. However, after Nov 2025 these automatic discounts for cloud services are gone – all online service licenses under EA will be at a single flat price regardless of volume. (On-premises software under EA can still have discounts, but cloud services are where most spend is growing.)
- Price Protection and Budget Predictability: One cost advantage of EA is price lock-in. Once you sign, the per-user or per-product prices are fixed for the 3-year term. This protects your budget from Microsoft’s annual price increases or currency fluctuations. For example, if Microsoft 365 prices rise 10% next year, EA customers continue paying their original rate until their EA term ends. This budget stability is valuable for financial planning.
- True-Ups vs. Fixed Counts: EA uses an annual “true-up” process instead of continuous adjustment. You start with an initial number of licenses (seats) and can add more users or products during the year without immediately changing the contract. At each anniversary, you report any increases (additional seats) and pay for those true-ups at the agreed price for the remainder of the term. This means EA is great if you grow (you don’t pay for added users until the true-up, effectively getting some float) but not so great if you shrink (you generally cannot reduce your commitment until the 3-year renewal). In other words, EA favors stable or growing organizations – if your headcount drops, you might end up paying for unused licenses (“shelfware”) until the term is over.
In summary, EA pricing is about locking in a bulk commitment for predictable costs and historically lower unit prices. As we’ll see, the 2025 changes reduce the automatic savings, but EA still offers unique cost features for the right profile of customer.
How Microsoft CSP Pricing Works
The Cloud Solution Provider (CSP) program is Microsoft’s modern licensing channel sold via partners (or direct through Microsoft’s web commerce for some). CSP pricing works differently from EA in several key ways:
- Pay-as-You-Go Model & List Prices: CSP is typically a subscription model with no long-term contract required beyond chosen subscription terms. You can add or remove licenses more flexibly. Pricing for CSP subscriptions is essentially tied to Microsoft’s list price for each product, with no automatic volume discounts for buying more seats. Whether you need 10 licenses or 10,000, the baseline price per license is the same under CSP. This means CSP may be more expensive per unit for large customers compared to the old EA discounted rates; however, with EA’s volume discounts going away, the list price is becoming the common denominator for both models.
- New Commerce Experience (NCE) Terms: Microsoft’s New Commerce Experience for CSP introduced different subscription terms that affect cost:
- Annual Subscription Commitment: You commit to a license for a full year (though you can choose to be billed monthly or annually). Annual-term subscriptions in CSP are priced lower than the fully flexible option. This is the most cost-effective CSP option per seat, similar to committing for a year – and it comes closest to EA in terms of commitment (though still only one year, not three).
- Monthly Subscription Commitment: For maximum flexibility, CSP allows month-to-month licenses that can be canceled or adjusted any month. However, monthly subscriptions come at roughly a 20% price premium compared to the annual rate. This means if Microsoft 365 E3 costs $32/user/month on an annual plan, the purely monthly plan might cost around $38/user/month. The premium is essentially the price of flexibility. Organizations that need the ability to scale licenses up and down frequently might accept this higher unit cost to avoid overpaying for unused months.
- (There are also 3-year CSP subscription options for certain products, and recently Microsoft even added a 5% premium on monthly billing of annual subscriptions, but the main point is that term length affects CSP cost.)
- Partner Margins and Discounts: In CSP, you purchase through a Microsoft partner (or Microsoft directly via their commerce site, which still operates similarly). Microsoft gives partners a discount off the list price (as their margin), and the partner sells to you. While Microsoft doesn’t offer volume discounts to customers in CSP, partners might offer their own discounts or bundle services to provide better value. For instance, a CSP partner might trim a few percent off the price or include added support services for free. However, any partner discount is discretionary – there’s no guarantee, and it usually won’t approach the large programmatic discounts that EA used to have. Still, for large deals, you can attempt to negotiate with CSP providers for a better rate or credits.
In essence, CSP pricing is pay-for-what-you-need, at standard rates. You gain agility – the ability to scale down as well as up – but you generally pay per actual use at list prices (plus a premium for short-term flexibility). This can be very cost-efficient for organizations with fluctuating needs or smaller deployments, but for very large steady-state deployments it historically could end up pricier than an EA (once EA discounts and price lock-ins were factored in). With 2025’s changes, CSP’s lack of volume discount is less of a differentiator since EA also has list pricing now for online services.
Scenario Cost Modeling – EA vs CSP in 2025
To understand which model delivers more cost savings in 2025, let’s consider three scenarios by organization size. Each scenario assumes the organization needs Microsoft 365-type licenses for its users, and we’ll compare the cost and practical implications under EA and CSP given the 2025 rules.
Scenario 1: 1,000 seats (Mid-market organization)
For an organization with about 1,000 users, an EA vs CSP pricing comparison in 2025 usually tilts toward CSP by default. Microsoft’s Enterprise Agreement has a minimum requirement (500 users) which 1,000 meets, but Microsoft is de-emphasizing EAs for customers of this size. In fact, many organizations around this range find that Microsoft will steer them to CSP or the Microsoft Customer Agreement instead of offering a new EA. Even if an EA were available, 1,000 seats falls into the former Level A tier – which had the smallest discount. With those discounts gone, an EA for 1,000 seats provides no cost advantage over CSP’s standard pricing. Meanwhile, CSP offers greater flexibility. The 1,000-seat company likely experiences some growth or contractions, and CSP would let them adjust licenses as needed (particularly if they opt for some monthly-term subscriptions for highly dynamic needs). EA would lock them to 1,000 (or whatever they start with) and they’d pay that amount all year, even if usage dips. Cost impact: At this scale, CSP’s pay-as-you-go nature prevents overspending on unused licenses. The only scenario where EA might save money for a 1,000-seat org is if they somehow negotiated special pricing (rare at this size) or if they highly value the 3-year price lock and fear frequent price hikes. Otherwise, CSP is the more cost-efficient choice for ~1k seats, and indeed it’s likely the only choice as EA contracts for small-mid customers phase out.
Scenario 2: 5,000 seats (Large enterprise, but not gigantic)
With 5,000 users, the organization is definitely in the enterprise category. They likely had access to an EA historically (Level B tier in old terms). In 2025, an organization this size can still go with either EA or CSP. So which saves more?
- Enterprise Agreement route: If they renew or sign an EA after Nov 2025, the online services per-user cost will be at the standard rate (no automatic Level B discount). However, the company still benefits from the 3-year price lock. If Microsoft announces a general 10% price increase next year, the EA customer with 5,000 seats is shielded from that until renewal. Over three years, that could be substantial savings versus CSP which would reflect the increase sooner. Also, a company of 5,000 might have some negotiating leverage. While not guaranteed, they could negotiate an additional discount or credit in their EA deal (for example, maybe a 5% off for committing enterprise-wide, or some free training licenses thrown in – it varies). This is not automatic but it’s a possibility to lower costs. The EA also simplifies budgeting: they know their base cost for three years.
- CSP route: If the same company goes CSP, they will pay the current list price per user per month. Over a year, that’s essentially the same starting cost as EA now. The difference is in flexibility: if the company anticipates layoffs or swings in headcount, CSP could save money by allowing them to drop licenses without waiting years. For example, if they drop to 4,800 users for a few months and then back up, under CSP they only pay for the actual 4,800 during that period, whereas an EA would have had them locked at 5,000 until a true-up (and EA generally doesn’t let you drop below your initial commit). However, CSP exposes them to price increases – if Microsoft raises cloud subscription prices 5% in 2026, the CSP customer will start paying 5% more once that takes effect, whereas the EA customer would still be paying the 2025 rate. CSP also has the 20% premium for month-to-month flexibility to consider: a cost-conscious 5,000-seat company could stick to annual CSP subscriptions to avoid that premium, but then they lose some flexibility (they can only reduce seats on the annual renewal of that subscription, not any month).
Cost comparison: For 5,000 seats, the EA vs CSP cost analysis is almost break-even on pure pricing if we assume no special EA discount. Both would start at roughly list price per seat. EA could save money in the long run if Microsoft’s prices rise significantly (EA locks the lower price) or if the company negotiated a discount. CSP could save money if the company’s actual usage dips below 5,000 at times or if they value not over-committing. In 2025, with EA’s built-in discounts phased out, the decision comes down to stability vs flexibility. EA offers cost stability; CSP offers cost agility.
Scenario 3: 15,000+ seats (Very large enterprise)
At 15,000 seats and above, we’re dealing with a global enterprise scale. Traditionally, this size would always choose EA (Level D tier) because the automatic discounts were significant (Level D was about 12% off list for online services, even more on some software plus additional concessions for enterprise-wide commitment). Now, post-2025, even a 15k-seat deployment faces standard pricing under EA. That means if no other adjustments, their costs could jump roughly 10–15% compared to what they would have paid under the old Level D pricing. This is a big deal for a large enterprise budget. What are the options?
- Enterprise Agreement path: Microsoft certainly doesn’t want to lose a 15k-seat client, so even though the official tiers are gone, large enterprises can negotiate custom discounts in an EA. It might not be called “Level D,” but you better believe a company this size will talk to Microsoft about some form of discount or incentive to sign a three-year EA. They might get, for example, a 5-10% discount off list or extra Azure credits, etc., depending on the situation and Microsoft’s willingness. Also, EA still has advantages like price lock and custom terms. With 15,000 users, even a small annual price increase can cost millions, so locking the rate provides predictability and potentially savings if inflation or adjustments occur. Another factor: EA often comes with Software Assurance and benefits (like Azure Hybrid Benefit for servers, training vouchers, etc.) that can translate to cost savings if the enterprise uses them heavily (for instance, Hybrid Benefits can save on Azure VM costs).
- CSP route: Could a 15,000-seat enterprise go CSP? Yes, technically there’s no seat limit in CSP. The immediate downside is paying list price for every one of those 15k licenses with no automatic bulk discount. That could be significantly more expensive annually than a well-negotiated EA. On the other hand, a massive organization often has parts of the business in flux – acquisitions, divestitures, project-based contractors, etc. For those aspects, CSP’s flexibility might save money. Imagine out of 15k licenses, 2,000 are for contractors or seasonal staff that only need licenses for 6 months; with CSP they could pay for 6 months for those 2,000 and then drop them, whereas an EA might require licensing all year (or at least a full-year subscription). Over time, CSP can prevent overspending on unused capacity for very large companies with dynamic needs. However, managing 15k users in CSP without the structure of an EA can be complex. Also, the enterprise would lose the direct Microsoft support and the easy renewal milestones of EA – everything is on them to manage in CSP.
Cost comparison: A 15,000+ seat enterprise is likely to squeeze the best deal out of Microsoft with an EA, especially if they renew before the tier discounts expire (locking in the old savings for one more term) or negotiate special pricing. EA will usually deliver cost advantages at this scale in terms of lower per-unit cost when negotiated, plus additional value-adds. CSP would probably result in a higher total cost if you simply convert all 15k users at list price, but it could yield savings in scenarios where portions of the workforce are variable. Some organizations might even choose a hybrid approach: maintain an EA for the bulk of their stable workforce to get the best pricing and protections, and use CSP for specific cases (like a subsidiary, a short-term project, or overflow needs) where the ability to turn licenses on/off outweighs the higher unit price. This way they avoid “shelfware” on those particular licenses and still enjoy EA pricing for the core.
For more strategic insights – read Hybrid Licensing Strategy: Using Microsoft EA and CSP Together.
Where EA Delivers Cost Advantages
Under the new 2025 conditions, EA’s cost benefits are more narrow than before, but there are still situations where EA shines in cost efficiency:
- Predictable, Locked-In Pricing: Large, stable enterprises benefit from predictable budgeting under EA. The three-year locked pricing means you won’t be caught off guard by Microsoft’s price hikes or currency fluctuations. For organizations that value stability and long-term planning, this can prevent unplanned cost increases and make EA cost-effective through price protection.
- Negotiated Enterprise-Wide Discounts: Even though automatic volume discounts are ending, big customers can often negotiate custom discounts or incentives when signing an EA. Microsoft may offer concessionary pricing (even if it’s not officially called a discount tier) or throw in extra value (like free add-ons or increased support) to close a large deal. These negotiated savings mean an EA can still come out cheaper per license than CSP’s standard rates for very large deals.
- Economies on Software Assurance & Hybrid Use: EA includes Software Assurance on licenses, which brings benefits like upgrade rights and Hybrid Use Benefits for Azure (using on-prem licenses in the cloud). For companies planning significant use of hybrid cloud or needing premium support/training, EA’s bundled benefits can save costs that you’d otherwise pay for separately under CSP.
- Cost of Inaction vs Shelfware: If your organization is very stable or growing, EA allows you to commit to what you need and even buffer a little for growth at a lower unit cost. The risk of paying for some unused licenses (“shelfware”) is real if you overestimate, but in a steady enterprise the wastage might be minimal compared to the per-unit savings over CSP. Especially for enterprises that renewed before Nov 2025, the preserved Level B–D discounts mean they are enjoying attractive pricing locked in until their term ends – a significant cost advantage over peers who will pay the new flat rates.
In short, EA delivers cost advantages when scale and stability intersect: large volumes that can be locked in and negotiated. It turns into real savings if you fully utilize what you’ve paid for and avoid the pitfalls of over-commitment.
Where CSP Delivers Cost Advantages
CSP can absolutely be the more cost-efficient option in many scenarios, even for fairly large organizations. Here’s where CSP delivers cost advantages in 2025:
- Pay for What You Use (No Overspending): The biggest advantage of CSP is that you avoid paying for unused licenses. If your license needs drop, you can reduce your subscription count (either in the next monthly cycle or at the next annual term end, depending on your subscription type). This ensures you’re not stuck financing unused seats. For organizations with fluctuating or unpredictable headcount, this prevents wasted spend that an EA would lock you into.
- Flexibility for Fluctuating Needs: Companies that experience seasonal spikes, project-based contractors, or rapid growth and shrinkage benefit from CSP’s flexibility. You can scale up licenses when you add a project team or open a new branch, and scale down if a project ends or during a hiring freeze. Even with the ~20% premium on truly short-term (monthly) subscriptions, it’s cheaper than over-provisioning licenses year-round. CSP’s flexibility translates into cost savings by aligning expenses exactly to usage duration.
- No Enterprise-Wide Commitment Required: With CSP you can mix and match licenses and aren’t required to buy one type of license for all users. This can save money by targeting who gets what license. For example, under an EA you might have to license all users with at least a certain suite (if you commit enterprise-wide to Microsoft 365 E3, every user needs an E3 even if some only use email). In CSP, you could give power users E3 or E5, lighter users a cheaper plan, and very occasional users maybe just an Exchange Online license – optimizing spend per user role. This tailored approach avoids over-licensing segments of your workforce.
- Easier to Start Small: CSP doesn’t demand a big upfront commit. If you’re unsure about a service or foresee changes, you can start with CSP and only pay small increments. This reduces financial risk. For mid-market companies and even bigger ones piloting new Microsoft services, CSP can save money by letting you gradually ramp up, instead of an EA which often pushes you to standardize broadly (potentially paying for some users who aren’t ready to use the service yet).
Overall, CSP delivers cost advantages through agility and precision: you spend money only where and when you need to. In an environment where Microsoft’s list prices are standard, avoiding overspend is a major form of savings.
Impact of 2025 Pricing Changes on EA vs CSP
Microsoft’s 2025 pricing changes have a profound impact on the EA vs CSP cost equation:
- EA’s Automatic Cost Advantage Erodes: The end of tiered volume discounts (Levels B–D) for online services means EA no longer automatically beats CSP on unit pricing. Previously, a large EA customer might pay 15% or more less per seat than a small CSP customer for the same product. Now, if both are buying, say, Microsoft 365 E5, both start at the same price. Loss of these discounts effectively raises costs for enterprises on EA at renewal (e.g., former Level D customers could see ~12% cost increases on their next term if they get no new discounts). It levels the field, making CSP and EA list prices equivalent.
- Need for Negotiation: With the safety net of built-in discounts gone, enterprises must negotiate discounts directly with Microsoft to squeeze more value from an EA. Microsoft is signaling that they want to simplify pricing, so any discounts will be bespoke. Companies with large spend will need to prepare better business cases and perhaps consider multi-year or multi-product commitments to get special pricing. The era of passive volume discounts is over; it’s now an active negotiation game. This adds complexity for procurement teams, and not every organization will succeed in getting a discount – some may end up paying list price even under EA.
- CSP vs EA Unit Cost Converges: For online services (cloud subscriptions like M365, Dynamics, Azure, etc.), the unit cost in EA and CSP is now essentially the same aside from any custom deal-making. This means CIOs and CFOs can evaluate EA vs CSP more on qualitative differences (flexibility, commitment, services) and less on pure price per license. The Microsoft CSP pricing comparison to EA is now much closer. Especially for cloud services, one could say EA has been made “CSP-like” in pricing.
- EA Still Holds On-Prem and Hybrid Perks: It’s worth noting that the 2025 changes apply to online services. EA still can provide discounts on on-premises licenses and perpetual software if those are part of your agreement. Also, Software Assurance (SA) benefits remain an EA feature. If your cost profile includes a lot of Windows Server, SQL Server, or other on-prem/hybrid usage, EA might still yield better overall cost efficiency due to SA and the ability to leverage existing licenses in the cloud (Azure Hybrid Benefit) or upgrade rights, etc. CSP’s changes have made it more enterprise-friendly (even offering some 3-year terms now), but EA retains some cost advantage for hybrid licensing scenarios not purely reflected in the subscription sticker price.
- Parity and Partner Focus: Microsoft’s rationale for these changes is to drive parity between EA and CSP pricing and encourage customers to use what fits best without pricing distortions. This means partners (in CSP) can compete on service and value-add, not just price. For customers, it means you should choose based on your operational needs more than ever: if you need flexibility, go CSP since EA won’t save you as much on cost now; if you need stability, EA still offers that without costing extra versus CSP.
In summary, the 2025 changes remove EA’s easy cost win and force enterprises to rethink their licensing strategy. The gap between EA and CSP costs has narrowed, making the decision hinge on how you value flexibility vs. long-term assurance and how well you can negotiate with Microsoft.
Strategic Recommendations for Enterprises
Given the current landscape, every organization should revisit their Microsoft licensing strategy. Here are some strategic recommendations to maximize cost savings:
- Renew or Sign EA Before Nov 2025 (if you can): If your EA renewal is coming up before the discount removal date, take advantage of the old pricing structure now. Lock in those tiered discounts for one more 3-year term. For example, a Level D enterprise renewing in October 2025 could secure ~12% lower pricing for the next three years – a huge saving. This window is closing, so act quickly and work with Microsoft or your Licensing Solution Provider to execute the renewal under current rules.
- Mid-Market (sub-2,400 seats): Plan for CSP as the New Default: If your organization is below roughly 2,400 users (formerly Level A), it’s likely you won’t even be offered an EA going forward. Budget and plan for CSP licenses as your primary model. That means preparing for annual price adjustments (since you won’t have 3-year locks) and possibly the need to manage monthly/annual subscriptions actively. Ensure your team or partner has the tools to administer CSP efficiently, to avoid any lapse or overpayment. The good news is you’ll have flexibility to optimize costs, but you’ll also bear responsibility to keep an eye on usage.
- Large Enterprises: Balance EA’s Predictability with CSP’s Flexibility: For larger organizations, don’t take an all-or-nothing approach. Reassess your environment:
- If a core of your users and services is stable and mission-critical, an EA might still serve you best for that portion, offering predictability and an opportunity to negotiate some discounts or value-adds.
- If other parts of your usage are variable (like external contractors, acquisitions, dev/test environments), consider using CSP for those. This mixed strategy can yield the best of both worlds: EA for baseline stability, CSP for dynamic needs.
- Also, weigh the administrative overhead – managing an EA plus CSP in parallel requires good tracking of who is licensed under which program. But many enterprises are finding this hybrid model gives them more cost optimization levers to pull.
- Optimize License Usage Continually: Whichever model(s) you choose, 2025 onward demands a more hands-on approach to license management. Ensure you audit your usage vs. licenses regularly. In EA, plan true-ups carefully and remove any optional items at renewal if not needed. In CSP, review monthly or quarterly to drop unused subscriptions. The loss of built-in discounts means any waste directly hits your budget. Tools and processes for software asset management and cloud cost tracking can pay for themselves by surfacing savings opportunities.
- Leverage Microsoft and Partner Programs: Microsoft knows these changes are significant; they may offer transitional programs or promos (for instance, CSP promotions or special discount if you move from EA to CSP, or vice versa). Ask your Microsoft rep or CSP partner about any cost incentives during this period. Also, use any Software Assurance benefits or training vouchers – they add value which effectively reduces your cost of licensing if utilized.
In essence, be proactive and strategic. The best savings will come to those who adapt quickly: secure favorable terms now if possible, or embrace the flexibility and diligence required with CSP.
FAQ – EA vs CSP Cost in 2025
- Does CSP always cost more than EA?
Not necessarily. In the past, a big EA could undercut CSP on unit prices thanks to volume discounts. Now, base prices are the same. If you purely compare list price, CSP and EA cost the same per license in 2025. EA can end up costing less per unit if you negotiate a discount or if you locked in pricing before a Microsoft price increase. Conversely, CSP could save you money if it helps you avoid paying for licenses you don’t need. So, CSP doesn’t “always” cost more; it depends on your ability to negotiate and your usage pattern. Think of EA as potentially cheaper if you fully utilize all licenses and get a deal, whereas CSP can be cheaper if you have variable needs and can trim waste. - What happens to EA’s Level B–D pricing after 2025?
Those tiered pricing levels (which offered progressively lower prices for more seats) are eliminated for online services. After November 1, 2025, all EA customers large and small will pay a single standardized price for cloud services like Microsoft 365, Dynamics 365, Azure, etc. Levels B, C, D essentially go away for cloud subscriptions. So a Level D customer that used to automatically get, say, 12% off will now start at list price like everyone else when they renew. This doesn’t necessarily mean you have zero negotiating power (big customers can still try for special terms), but there is no published volume price list anymore beyond Level A for cloud services. For on-premises licenses, Microsoft hasn’t changed the volume pricing (those still may have tiered discounts), but the trend is clearly towards a flat pricing model for most things. - Can large enterprises negotiate CSP discounts?
Not in the same way as EA. CSP is sold through partners and the pricing is based on Microsoft’s fixed catalog price. Microsoft itself does not offer volume discounts on CSP subscriptions, so you can’t get a lower list price directly due to your size. However, a CSP partner might work with you on price if the deal is large. Since partners get an incentive margin from Microsoft, a large CSP reseller might choose to give you a portion of that margin as a discount or bundle in free services (migration help, support, etc.) to sweeten the deal. This is more of a one-time or case-by-case negotiation, not a formal volume pricing structure. Also, Microsoft occasionally offers promotional discounts or credits in CSP for specific scenarios (for example, to entice EA customers to transition to CSP, or for nonprofit/education sectors). So, while you can’t count on a discount, it’s worth asking and shopping around among CSP providers if you have a very large deployment – some may offer better pricing or added value. - Is it cheaper to run EA and CSP side-by-side (hybrid licensing)?
It can be, if managed correctly. Running parallel EA and CSP agreements is a strategy some organizations use to optimize costs. For example, you put your steady 10,000 employees on an EA (locked-in pricing, possibly negotiated savings) and handle an extra 1,000 seasonal/contractor staff via CSP where you can scale down after their contracts end. In this case, yes, you’re saving money by not having 11,000 locked in for three years when you only need those extra 1,000 for a few months. Similarly, an EA might cover core products, while you use CSP to trial new services on a small scale without committing enterprise-wide. However, running both can also be more expensive if not controlled: you might accidentally double-license some users or overlook the CSP usage because it’s outside the EA true-up process. There’s also an administrative overhead to manage two channels. So, hybrid licensing is not automatically cheaper, but it gives you the flexibility to optimize each portion of your use case, which, if done deliberately, results in overall savings. - Which model is best for budgeting stability vs flexibility?
If your priority is budgeting stability, the EA is best. It offers multi-year predictable costs and shields you from market volatility in Microsoft’s pricing. You can lock in a budget line for software for three years, which greatly aids financial planning and avoids surprises. If your priority is flexibility, CSP is the winner. It lets you adjust your spend in near-real-time with your needs – ramp up or down as projects and staffing change. Most large organizations actually value both: you want stability for core operations and flexibility at the margins. So the answer might be a mix: use EA to nail down a stable cost base and CSP to handle the flexible parts. But if forced to choose one orientation: EA = stability (predictable, but rigid), CSP = flexibility (agile, but you ride the market rates).
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