A1
Microsoft 365 A1 for education students or staff. Free per-user SKU bundling web-based Office, Teams for Education, and basic Intune for Education.
224+ defined terms covering Microsoft Enterprise Agreement structure, Microsoft 365 SKUs, Azure consumption commits, the Copilot portfolio, Entra and Defender suites, Purview, the 2026 Frontier Suite, and the entire vocabulary of Microsoft buyer-side commercial negotiation. Maintained by the Microsoft Negotiations advisory team.
This Microsoft licensing glossary is the working reference our advisors use during engagements. It covers the Microsoft Enterprise Agreement programme structure, the modern commerce vehicles (MCA-E, CSP NCE), every major Microsoft 365 SKU including the new E7 Frontier Suite, the four-mechanism Copilot Studio billing model, Azure MACC mechanics, Defender and Purview suites, Entra identity tiers, and the audit-defence vocabulary every buyer should understand before negotiating.
Where a term has practical buyer implications, the definition flags them. Cross-references at the end of each entry link to related terms. If you need help applying any of this to your own EA renewal, speak to an independent advisor or pull our EA Negotiation Playbook.
Microsoft 365 A1 for education students or staff. Free per-user SKU bundling web-based Office, Teams for Education, and basic Intune for Education.
Microsoft 365 A3 for education. Mid-tier paid SKU adding desktop Office, Windows 11 Education, and Defender for Endpoint P1.
Microsoft 365 A5 for education. Top education SKU with security and compliance capabilities equivalent to M365 E5.
Azure Consumed Revenue. Microsoft's internal metric for measuring how much Azure consumption a customer actually generates, regardless of MACC commit. Field reps are compensated on ACR growth, which is why they push consumption-driving services like Fabric, OpenAI, and migration accelerators. ACR is the lens to use when assessing how much leverage you have at MACC renewal.
Related: MACC · Azure Hybrid Benefit
Agent Compute Unit. The metering unit for Copilot Studio's autonomous-agent workloads launched in 2026. Distinct from CCCU. One ACU corresponds to a defined volume of agent-orchestrated tool calls and reasoning steps. Allocation is pooled at the tenant level and rolls forward within the contract term but not across renewals.
Related: CCCU · Copilot Studio · Agent 365
Microsoft Purview module providing extended audit-log retention and high-bandwidth-access investigation APIs. M365 E5 component.
Microsoft Purview module supporting end-to-end electronic discovery including legal hold, custodian communications, machine learning relevance, and review. M365 E5 component.
Azure Government Agreement. The contract vehicle for US-government Azure consumption, mirroring commercial MACC mechanics within FedRAMP-compliant infrastructure.
Related: Azure Government
Microsoft 365 SKU launched 2026 that bundles Copilot for M365, Copilot Studio capacity, and a defined ACU pool. Marketed as the unification of Microsoft's AI portfolio under one per-user SKU. Pricing positions it between standalone Copilot for M365 and the E7 Frontier Suite. Buyer test: only economic if standalone Copilot Studio CCCU spend already exceeds the bundle delta.
Related: Copilot for M365 · Frontier Suite · Copilot Studio · ACU
The annual date in an EA term when true-up reconciliation occurs. Microsoft uses anniversary to bill for net-new seat adds, SKU step-ups, and any usage that exceeded baseline. The anniversary window is contractually defined; buyers who lose track of it expose themselves to retro-billing.
Related: True-up · EA Renewal Timeline
Standalone Microsoft 365 Apps for Business SKU. Desktop Office for SMB customers; capped at 300 seats.
Related: Microsoft 365 Apps
Standalone Microsoft 365 Apps for Enterprise SKU. Desktop Office for enterprise customers without the full M365 E3 bundle.
Related: Microsoft 365 Apps
Contractual provision in every Volume Licensing agreement permitting Microsoft to verify compliance with product use rights. Standard EA wording is broad; buyers can negotiate narrower scope, advance-notice requirements, and named third-party auditor language. Critical lever for audit-defence posture.
Related: Microsoft Verification · SAM Engagement
Azure governance and management plane extending to on-premises, multi-cloud, and edge resources. Licensing model is per resource managed, with SQL Server on Arc-enabled servers eligible for pay-as-you-go SQL via Azure consumption rather than license-by-core.
Related: Azure Hybrid Benefit · BYOL · Azure Stack HCI
Multi-year financial commitment to Azure spend, formalised as MACC. Drives discount eligibility and unlocks portfolio benefits. Failure to consume the commit results in shortfall billing.
Azure offering deployed in physically separated US-government datacentres with US-citizen-screened operations. Multiple tiers: GCC, GCC-H, DoD IL4, DoD IL5. Licensing carries premium of 20-40% vs commercial Azure plus restrictions on services available.
Licensing benefit allowing use of existing Windows Server and SQL Server licences with active Software Assurance on Azure VMs. Reduces VM-hour cost by 40-55%. Subject to active SA on the licences; expires when SA lapses.
Related: BYOL · Software Assurance · Per-Core
Microsoft DR-as-a-service. Billed per protected instance per month, with replication storage and egress separate. Often over-attached at signature and under-utilised in production; common rightsizing target.
Related: Azure Consumption Commit
Hyperconverged-infrastructure platform that runs on-premises but bills via Azure consumption. Distinct licensing model from Azure VM consumption; nodes are billed per-core per-month regardless of usage.
Microsoft Entra ID Business-to-Business collaboration. Free for the first 50,000 monthly active users for most directory operations; advanced features metered.
Related: External ID
Microsoft Entra External ID for B2C (formerly Azure AD B2C). Customer-identity platform; per-monthly-active-user pricing tiers.
Related: External ID
Best Alternative To a Negotiated Agreement. The credible non-Microsoft path a buyer holds in reserve. CSP routing of non-strategic SKUs, MCA-E migration, or LSP-vs-direct comparisons are all common Microsoft EA BATNAs.
Independently sourced discount-band data from comparable EA deals. Distinct from Microsoft's published prices and from LSP-supplied quotes. The leverage source most buyers don't have without independent advisory.
Microsoft Bookings appointment-scheduling app. Bundled with most M365 SKUs.
Related: Microsoft 365 Apps
Business Software Alliance. Industry compliance enforcement body that pursues unlicensed software cases, sometimes acting on behalf of Microsoft. BSA cases follow a different procedural path than direct Microsoft Verification but can produce equally large settlements.
Related: Microsoft Verification · Audit Clause
Bring Your Own Licence. Mechanism for using existing on-prem licences on cloud or partner-hosted infrastructure. For Microsoft, BYOL typically requires active SA. Common in Azure Hybrid Benefit, SPLA hosting, and Azure Arc scenarios.
Related: Azure Hybrid Benefit · Software Assurance · SPLA
Client Access Licence. Per-user or per-device licence required to legally access Windows Server, Exchange Server, SharePoint Server, SQL Server, and similar Microsoft server workloads. Distinct from the server licence itself. Often missed in audits.
Related: External Connector · Per-User · Per-Device
Copilot Studio Conversational Compute Unit. The metering unit for conversational (chat) Copilot Studio agents launched as part of the 2026 four-mechanism Copilot Studio billing model. CCCUs are pooled at the tenant and consumed per qualifying conversation, with model-specific multipliers.
Related: ACU · Copilot Studio
Microsoft Intune Suite component providing cloud-managed certificate issuance. Bundled with Intune Suite (and M365 E5 from 2026).
Related: Intune Suite · M365 E5
Pre-2026 Copilot Studio billing model based on bulk message packs. Largely superseded by the four-mechanism model (per-message, CCCU, ACU, Copilot for M365 inclusion).
Related: Copilot Studio · CCCU · ACU
Aligning expiry dates of multiple Microsoft contracts to a single renewal date. Common when consolidating prior MPSA, EA, or CSP estates into one EA. Co-term mechanics affect price-protection windows and should be negotiated explicitly.
Related: EA Renewal Timeline · MPSA
Microsoft Purview module monitoring email and Teams communications for compliance breaches. M365 E5 component.
Microsoft's contractual definition of where customer data may reside and which sub-processors may access it. Distinct from technical data-residency settings. Relevant for EUDB, GCC, GCC-H, and regulated-industry buyers.
Microsoft Entra ID feature gating sign-ins based on user, device, location, app, and risk signals. Requires Entra ID P1 minimum. Cornerstone of zero-trust architectures and increasingly bundled into compliance commitments.
Related: Entra ID P1 · Entra ID P2 · Identity Protection
The redlined version of the standard EA audit clause, with negotiated scope limitations, advance-notice requirements, named third-party auditor specifications, and dispute-resolution procedures. T-3 deliverable.
Related: Audit Clause · Microsoft Verification
Microsoft's flagship generative AI assistant for Word, Excel, PowerPoint, Outlook, Teams, and the Microsoft 365 Chat experience. Per-user/per-month list price of $30 (USD) at GA. Requires M365 E3/E5 or equivalent base SKU. Adoption is the primary ROI variable, not entitlement.
Related: Copilot Studio · Agent 365 · Frontier Suite · M365 Chat
Microsoft's low-code platform for building custom Copilot agents. Billed via a 2026 four-mechanism model: per-message metering, CCCU for conversations, ACU for autonomous agents, and Copilot for M365 inclusion for grounded agents. Replacing the prior Power Virtual Agents licensing.
Related: CCCU · ACU · Power Platform
Microsoft globally distributed NoSQL database. Billed by Request Units per second (RU/s) or by serverless consumption. Common over-commit target.
Related: Azure Consumption Commit
Microsoft Azure native cost-analysis and budgeting tooling. Free for Microsoft consumption; chargeable for partner-managed scenarios.
Related: Azure Consumption Commit
Cloud Solution Provider. Microsoft's partner-led commerce channel for Azure, M365, and D365 sold via partner agreements (CSP NCE since 2022). Distinct from EA in commit structure: per-seat cancellable monthly or annually with shorter terms but typically higher per-seat cost.
Related: NCE · MCA-E · CSP Grace Period
CSP commerce variant where the partner transacts directly with Microsoft and sells to the end customer. Subject to higher Microsoft requirements.
Related: CSP
Pre-April-2026 mechanism that allowed CSP subscriptions to be cancelled for a 7-day grace period after creation or renewal. Microsoft eliminated this grace period for NCE subscriptions effective April 2026, removing a long-standing buyer flexibility.
CSP commerce variant where a Tier-1 distributor sells to a Tier-2 reseller who sells to the end customer. Distinct billing relationships; common in EMEA and APAC.
Related: CSP
Microsoft Purview feature requiring explicit customer approval before Microsoft engineers can access customer data during support engagements. Included in M365 E5 and the new E7 Frontier Suite. Relevant for regulated buyers.
Related: Purview · M365 E5 · Frontier Suite
Dynamics 365 SMB ERP offering. Per-user licensing at Essentials, Premium, and Team Member tiers. Often packaged with M365 in mid-market deals.
Related: Dynamics 365
Microsoft's contact-centre and case-management D365 module. Per-user Enterprise licensing; routinely over-bought as Premium when Professional would suffice. Heavy Copilot integration in 2026.
Related: Dynamics 365 · Sales Copilot · Service Copilot
Microsoft's cloud finance ERP module. Premium per-user pricing with attach mechanics for D365 Supply Chain and D365 Project Operations.
Related: D365 Supply Chain · Dynamics 365
Microsoft's sales-force-automation D365 module. Enterprise per-user licensing; Premium tier bundles Sales Copilot capabilities at a per-user uplift.
Related: Sales Copilot · Dynamics 365
Microsoft's cloud supply-chain ERP module. Heavy attach mechanics with D365 Finance and D365 Project Operations. Premium per-user licensing.
Related: D365 Finance · Dynamics 365
Microsoft Purview module preventing accidental sharing of sensitive data across Exchange, SharePoint, OneDrive, Teams, and endpoints. Tier varies by SKU; basic DLP in M365 E3, advanced (endpoint DLP) in M365 E5.
Microsoft's cloud security posture management and cloud workload protection platform for Azure, AWS, and GCP. Distinct from the Defender for Endpoint/Office family; billed via Azure consumption.
Related: Defender XDR
Microsoft's CASB. Part of the Defender XDR suite, included in M365 E5. Per-user pricing with discovery and conditional-access integration. Often a target for SKU rationalisation if competing CASB is already deployed.
Related: MDA · Defender XDR · M365 E5
Microsoft's endpoint detection and response platform. Two tiers: P1 (bundled with M365 E3 from 2026) and P2 (bundled with M365 E5). The P1-to-E3 bundling change destroyed the standalone P1 add-on revenue model.
Microsoft's identity threat-detection platform monitoring Active Directory and Entra ID for compromise indicators. Bundled in M365 E5 Security.
Related: MDI · Entra ID P2 · M365 E5
Microsoft's operational-technology and IoT security platform. Billed per device; relevant for manufacturing, utilities, and critical infrastructure buyers.
Related: Defender XDR
Microsoft's email and collaboration security platform. P1 (anti-phishing, anti-malware) is bundled into M365 E3 from 2026; P2 (attack simulation, threat trackers) remains an E5 differentiator.
Microsoft Defender for Cloud component providing server-level protection equivalent to MDE for cloud and on-prem servers.
Related: Defender for Cloud · MDE
Microsoft's unified XDR portal aggregating signal from MDE, MDO, MDI, MDA, Purview, and Entra. Operates as the surface, not a separate SKU.
Enterprise Agreement signed directly with Microsoft rather than via an LSP. Eliminates the LSP margin but removes a layer of vendor management. Sometimes paired with a separate fulfilment partner.
Department of Defense Impact Level 5. Highest commercial-cloud authorisation for controlled-unclassified-information (CUI) workloads. Azure Government DoD region. Pricing carries 30-50% premium over Azure commercial.
Related: Azure Government · GCC-H · FedRAMP
Microsoft's healthcare-AI Copilot (formerly Dragon Medical / Nuance DAX). Role-specific licensing for physicians, nurses, and ambient documentation. Physician Flex tier introduced 2025 for shared-clinician environments.
Related: Physician Flex · Copilot for M365
Microsoft Office 2019 and later contract provision permitting installation on both work and personal devices for the licensed user. Often overlooked when audit teams catalogue devices.
Related: Product Use Rights
Microsoft's modular ERP and CRM cloud suite covering Sales, Customer Service, Finance, Supply Chain, Commerce, Project Operations, and Business Central. Per-user licensing with significant attach mechanics.
Related: D365 Sales · D365 Finance · D365 Customer Service
Office 365 Enterprise E1. Per-user SKU bundling web-based Office, Exchange Online, Teams, and SharePoint Online without desktop apps. Common for kiosk or limited-use users.
Related: M365 E3 · Office 365 E3
Enterprise Agreement. Microsoft's flagship 3-year volume-licensing programme for organisations with 500+ users or devices. Combines licence ownership, subscription cloud SKUs, and Software Assurance into a single contract with anniversary true-up.
Related: Software Assurance · True-up · MCA-E
EA enrollment held directly between Microsoft and the customer, without LSP intermediation. Operational responsibility shifts to the customer team.
Standard EA structure where an LSP holds the enrollment paper and acts as the customer's commercial intermediary with Microsoft.
The 12-month preparation arc culminating in EA renewal signature. Standard milestones are T-12 (foundation), T-9 (optimisation), T-6 (alternatives), and T-3 (execution). Buyers who arrive at T-3 without prior milestone work have minimal leverage.
Variant of the EA where all software is licensed by subscription rather than perpetually owned with SA. Lower commitment thresholds but no residual licence value at term end.
Related: EA · Software Assurance
The enrollment paper covering the subscription portion of an EA, distinct from the perpetual-licence enrollment.
Related: EA Subscription
The 2026 change to Microsoft EA discount structure that compressed Levels A-D into a flat or near-flat per-seat list price for organisations below approximately 2,400 seats. Major impact on mid-market buyer economics.
Enterprise App Management. Intune Suite component for application discovery, packaging, and lifecycle management.
Related: Intune Suite
Enterprise Agreement Profile. The seat-count and SKU profile that defines pricing eligibility, discount band, and Software Assurance applicability for an EA. Re-baselining EAP at renewal is a major lever.
See A5.
Related: A5
Enrollment for Education Solutions. Microsoft's annual education-sector agreement. Per-FTE pricing with A1, A3, A5 SKU equivalents to E1/E3/E5.
Free tier of Microsoft Entra ID (formerly Azure AD Free) included with any Microsoft cloud subscription. Limited to basic directory services, no conditional access, no MFA enforcement beyond per-user.
Related: Entra ID P1 · Entra ID P2
Microsoft Entra add-on bundling Access Reviews, Entitlement Management, Privileged Identity Management, and Lifecycle Workflows. Per-user pricing; included in Entra Suite.
Related: Entra Suite · PIM
Microsoft Entra ID Premium P1. Mid-tier identity SKU enabling Conditional Access, group-based licensing, Cloud App Discovery, and self-service password reset. Bundled in M365 E3.
Related: Conditional Access · Entra ID P2 · M365 E3
Microsoft Entra ID Premium P2. Top-tier identity SKU adding Identity Protection, Privileged Identity Management, and Access Reviews on top of P1 capabilities. Bundled in M365 E5.
Related: Entra ID P1 · PIM · Identity Protection · M365 E5
Microsoft's bundled identity offering combining Entra ID P2, Entra ID Governance, Entra External ID, Entra Internet Access, and Entra Private Access. Per-user pricing positioned as the SSE/SASE companion to E5.
Related: Entra ID P2 · Entra ID Governance · External ID
Endpoint Privilege Management. Intune Suite component allowing standard users to elevate specific applications without local admin rights.
Related: Intune Suite
EU Data Boundary. Microsoft's commitment to process and store M365, Azure, Power Platform, and Dynamics 365 customer data exclusively within the European Union. Phased availability since 2023. Relevant for GDPR-sensitive buyers.
Related: Compliance Boundary
Windows Server licence variant covering unlimited external (non-employee, non-affiliate) user access. Alternative to per-user CALs for public-facing workloads.
Microsoft Entra External ID (rebranded from Azure AD B2C). CIAM platform for managing customer-facing identities. Consumption-based pricing.
Related: Entra Suite · B2C
Microsoft Fabric per-capacity SKU. Replaces Power BI Premium P-SKUs. F2 through F2048 capacities, billable hourly with reserved-capacity discount option.
Related: Fabric Capacity
Microsoft 365 Frontline F1. Entry-tier per-user SKU for shift workers, factory floors, retail, and other deskless roles. Bundles core M365 web access, Teams, SharePoint, and Yammer at a fraction of the E3 price.
Microsoft 365 Frontline F3. Mid-tier Frontline SKU adding mobile Office apps, Power Apps and Power Automate (limited), and additional security. Common for clinical, warehouse, and field-service roles.
Microsoft 365 Frontline F5. Top-tier Frontline SKU adding security and compliance capabilities approaching M365 E5 levels. Less common than F1/F3.
Microsoft Fabric F-SKU capacities (F2 through F2048). The successor metering model to Power BI Premium P-SKU. Pay-as-you-go or reserved with Azure-style commit pricing.
Legacy Power BI Premium per-capacity SKUs (P1-P5) being migrated to Microsoft Fabric F-SKUs. Microsoft is sunsetting new P-SKU sales and incentivising P-to-F migration with bridging discounts.
Related: Fabric Capacity · P-SKU
Microsoft's funded deployment-assistance programme for new M365 and D365 customers. Capability has narrowed over time; verify scope at signature.
Related: Jumpstart
Microsoft-funded deployment assistance for M365 cloud adoption. Eligibility tied to seat count and SKU mix.
Related: FastTrack
Federal Risk and Authorization Management Program. US government cloud-security framework. Microsoft holds FedRAMP High authorisation for Azure Government, GCC, and several M365 government plans.
Related: Azure Government · GCC · GCC-H
Microsoft's free Entra ID tier permitting limited Conditional Access usage with the Microsoft-managed Security Defaults set. True policy authoring requires Entra ID P1.
Related: Conditional Access · Entra ID P1
Microsoft 365 E7. Launched 2026 as Microsoft's premium bundled SKU above E5. Includes Copilot for M365, Agent 365 capacity, advanced Defender and Purview capabilities, Intune Suite, and Entra Suite components. List price approximately $99/user/month.
Related: M365 E7 · Copilot for M365 · Agent 365
Microsoft Government Community Cloud. M365 and Azure offering for US federal, state, local, and tribal government with FedRAMP Moderate authorisation.
Related: GCC-H · Azure Government
Microsoft Government Community Cloud High. Stricter version of GCC providing FedRAMP High and DoD IL4 compliance. Required for many controlled-unclassified-information workloads.
Microsoft's AI coding assistant for developers, available in Individual, Business, and Enterprise tiers. Per-user/per-month pricing. Premium request billing for advanced model invocations introduced 2025.
Related: Premium Request · Copilot for M365
Mid-tier GitHub Copilot offering with central administration, audit logging, and policy controls. Standard per-user/per-month pricing.
Related: GitHub Copilot · GitHub Copilot Enterprise
Top-tier GitHub Copilot offering with knowledge-base integration, repository-aware code chat, and pull-request summaries. Per-user/per-month uplift over Business.
Related: GitHub Copilot · GitHub Copilot Business
M365 GCC E3. The GCC variant of M365 E3 with FedRAMP-Moderate compliance and US-government datacentre hosting.
M365 GCC E5. The GCC variant of M365 E5.
Software Assurance benefit allowing employees of SA-licensed organisations to purchase Microsoft 365 Family at a discount for personal use. Frequently overlooked SA value.
Related: Software Assurance · SA Benefits
Microsoft's hypervisor included with Windows Server. Licensing of guest workloads follows Windows Server core-based rules; Datacentre Edition permits unlimited Windows Server guest VMs on a licensed host.
Related: Windows Server · Per-Core
Infrastructure as a Service. Compute, storage, and networking primitives sold by hyperscalers. Microsoft's IaaS is Azure Virtual Machines, Disks, Virtual Networks, etc. Distinct licensing posture from PaaS and SaaS components.
Related: Azure Hybrid Benefit · Reserved Instance
Microsoft Entra ID P2 feature using ML signals to detect compromised identities and risky sign-ins. Requires Entra ID P2 entitlement.
Related: Entra ID P2 · Conditional Access
Microsoft Purview Information Protection capabilities for labelling, encryption, and rights management of documents and emails. P1 included in M365 E3; P2 (automatic labelling) in M365 E5.
Microsoft Purview module detecting risky internal user activity (data exfiltration, policy violations). M365 E5 component.
Microsoft's premium endpoint-management add-on bundling Endpoint Privilege Management (EPM), Enterprise App Management (EAM), Cloud PKI, Remote Help, Advanced Analytics, and Tunnel. Bundled into M365 E5 from 2026.
Microsoft's funded engagement programme (formerly FastTrack for some workloads) helping customers deploy new SKUs. Often offered at signature as a sweetener; verify scope and deliverables.
Related: FastTrack
EA discount tier for the smallest enterprise customers. Pre-2026 the lowest published Open / Open Value-Subscription tier. After the EA tier collapse, Level A persists only as a notional anchor.
Related: Level B · Level C · Level D · EA Tier Collapse
EA discount tier between Level A and Level C. Modal tier for mid-market buyers historically. Now compressed by the EA tier collapse.
Related: Level A · Level C · EA Tier Collapse
EA discount tier for larger mid-market and lower-enterprise buyers, historically delivering meaningful discount uplift over Level B.
EA discount tier reserved for the largest enterprise buyers, historically the highest published discount band. Compressed after the EA tier collapse.
Related: Level C · EA Tier Collapse
Software Assurance benefit permitting use of SA-covered server licences (SQL, SharePoint, Exchange) on authorised partner-hosted environments without re-licensing. Distinct from BYOL on Azure.
Related: Software Assurance · BYOL
Licensing Solution Provider. Microsoft authorised reseller of EA agreements. Levels: LSP, Direct LSP, and LSPs with specific solution-area accreditations. The LSP holds the contract paper but Microsoft sets pricing.
The Microsoft 365 Copilot Chat interface accessed via web and mobile, providing the Copilot experience outside of in-app contexts. Bundled with Copilot for M365 entitlements.
Related: Copilot for M365
Microsoft 365 Enterprise E3. Mid-tier per-user productivity, security, and management bundle. Includes Office 365 E3, Windows 11 Enterprise, EMS E3, Defender for Office P1 (from 2026), and Defender for Endpoint P1 (from 2026).
Related: M365 E5 · Office 365 E3 · EMS E3
Microsoft 365 Enterprise E5. Top-tier per-user bundle adding advanced Defender modules (P2 across MDO/MDE/MDI), Power BI Pro, Intune Suite (from 2026), Entra ID P2, Purview Advanced eDiscovery, and Customer Lockbox.
Related: M365 E3 · M365 E7 · Power BI Pro · Intune Suite
Microsoft 365 Enterprise E7. Frontier Suite, launched 2026. Bundles Copilot for M365, Agent 365 ACU capacity, advanced Purview and Defender capabilities not in E5, and select Entra Suite components.
Related: Frontier Suite · Agent 365 · Copilot for M365
The Frontline family of M365 SKUs (F1, F3, F5) for deskless and shift-based workers. Distinct pricing curve from E-SKUs and major savings opportunity for retail, manufacturing, healthcare, and hospitality.
Microsoft Azure Consumption Commitment. Multi-year financial commit to Azure spend, often $1M-$50M+ per year. Drives discount eligibility, ACR field-rep credit, and access to portfolio-level concessions.
Related: ACR · Azure Consumption Commit
Microsoft's 2026 MACC pricing mechanic offering enhanced discount tiers when the next MACC term commits to a step-up over current consumption. Engineered to drive ACR rather than reward existing spend.
The schedule of annual Azure consumption commit growth over a multi-year MACC term. Microsoft prefers front-loaded ramps; buyers should negotiate back-loaded ramps with year-1 underconsumption rollover.
Related: MACC
Microsoft Customer Agreement - Enterprise. Microsoft's evergreen Modern Commerce contract being positioned as the successor to EA. Per-seat pricing, no anniversary true-up, monthly billing. Adoption rate is rising but EA remains the dominant enterprise vehicle.
Related: EA · Modern Commerce
Modern Commerce vehicle for online (self-serve) purchasing of Microsoft cloud SKUs. Distinct from MCA-E and EA.
Related: MCA-E · Modern Commerce
Microsoft Defender for Cloud Apps. See Defender for Cloud Apps.
Related: Defender for Cloud Apps · Defender XDR
Microsoft Defender for Endpoint. See Defender for Endpoint.
Related: Defender for Endpoint · Defender XDR
Microsoft Defender for Identity. See Defender for Identity.
Related: Defender for Identity · Defender XDR
Microsoft Defender for Office 365. See Defender for Office 365.
Related: Defender for Office 365 · Defender XDR
Multi-Factor Authentication. Microsoft Entra ID feature; basic MFA is free, conditional-access-driven MFA requires Entra ID P1.
Related: Entra ID P1 · Conditional Access
Combined use of Microsoft MFA and Conditional Access policies to enforce risk-based authentication. Requires Entra ID P1 or higher for policy-driven enforcement.
Related: MFA · Conditional Access · Entra ID P1
Standalone subscription for the desktop Office apps (Word, Excel, PowerPoint, Outlook) without the broader M365 cloud services. Two flavours: Apps for Enterprise and Apps for Business.
Related: M365 E3
Microsoft's first-party SaaS backup for SharePoint, OneDrive, and Exchange Online data. Per-GB pricing; alternative to third-party backup tools.
Related: Microsoft 365 Apps
The Frontline family (F1, F3, F5) marketed as Microsoft 365 Frontline. Distinct discount curve from E-SKUs.
Successor to MPN. Defines partner competencies, credentials, and incentive structures across Microsoft's commerce channels.
Related: MPN
Microsoft's formal compliance review programme, often initiated via a letter from Microsoft's Verification team. Distinct from a SAM Engagement (collaborative) and a third-party audit (BSA). Verification is an audit by another name.
Related: SAM Engagement · Audit Clause · BSA
Microsoft's umbrella term for its evergreen commerce vehicles: MCA-E, MCA-Online, NCE CSP, and others. Positioned as the post-EA future state.
Microsoft Partner Network. Microsoft's partner-programme infrastructure; replaced by Microsoft Cloud Partner Program in 2022. Relevant for buyers evaluating LSP and CSP partner credentials.
Microsoft Products and Services Agreement. Per-transaction licensing programme historically used for non-EA enterprise purchases. Largely superseded by CSP NCE and MCA-E for new commerce.
Microsoft Developer Network. Predecessor to Visual Studio Subscriptions. Per-developer subscription bundling dev/test rights to most Microsoft software.
Related: Visual Studio Subscription
New Commerce Experience. Microsoft's modernised CSP subscription engine launched 2022. Monthly or annual commits, cancellation restricted to a 7-day window historically and now eliminated as of April 2026.
Related: CSP · CSP Grace Period
Software Assurance benefit entitling licensees to use the latest version of covered products at no additional cost during the SA term. The primary tangible benefit of SA for perpetual on-prem licences.
Related: Software Assurance
Office 365 Enterprise E3. The Office productivity-only component of M365 E3. Sold standalone for buyers not adopting Windows 11 Enterprise or EMS.
Related: M365 E3
Office Long-Term Servicing Channel. Perpetual on-prem Office for buyers refusing the subscription cloud model. Released every ~3 years.
Related: Microsoft 365 Apps
Microsoft cloud storage workload bundled with most M365 SKUs. Standalone plans (OneDrive P1, P2) exist for non-M365 deployments.
Related: SharePoint Online
Microsoft small-and-medium-business volume licensing programme. Annual payment, perpetual licences, optional Software Assurance. Largely superseded for new commerce by CSP.
Related: CSP · Software Assurance
See OVS.
Related: OVS
Open Value Subscription. The subscription variant of Open Value, organisation-wide commitment with annual payment.
Related: Open Value
Legacy Power BI Premium per-capacity SKU. See Fabric P-SKU. Now in migration phase to Fabric F-SKUs.
Related: Fabric P-SKU · Fabric Capacity
Platform as a Service. Cloud services that provide managed runtimes, databases, and frameworks. Azure PaaS includes App Service, Azure SQL Database, Functions, Logic Apps, and similar.
Licensing model anchored to specific devices regardless of how many users access them. Common for shared kiosks, frontline shared devices, and legacy Office Per-Device deployments.
Related: Per-User · Shared-Device
Licensing model anchored to named users regardless of device count. Standard for M365, D365, and most modern Microsoft SaaS SKUs.
Related: Per-Device · USL
Per-Core licensing model. Windows Server (Standard, Datacentre) and SQL Server are licensed per-core with minimums per processor and per server. Replaced per-processor licensing for these products several generations ago.
Related: CAL · Windows Server · SQL Server
Dragon Copilot licensing tier for shared-clinician environments where multiple physicians access ambient documentation tools across a shared device pool. Consumption-based pricing.
Related: Dragon Copilot
Privileged Identity Management. Microsoft Entra ID P2 capability providing just-in-time elevation, approval workflows, and audit trails for privileged role assignments.
Related: Entra ID P2 · Identity Protection
Software Assurance benefit providing Microsoft-funded planning engagements (deployment, migration, Power Platform planning). Days of consulting allocated per SA-covered SKU.
Related: Software Assurance · SA Benefits
Power Platform per-user SKU permitting use of premium connectors and Dataverse-based custom apps. Required for most enterprise Power Apps deployments beyond M365 included connectors.
Related: Power Platform · Power Automate Premium
Power Automate licensing model permitting unattended automation per flow rather than per user. Pricing per flow per month; appropriate for shared back-office processes.
Related: Power Automate Premium
Power Platform per-user SKU permitting unattended automation, premium connectors, and process advisor capabilities.
Related: Power Apps Premium · Power Platform
Microsoft's BI platform. SKUs include Power BI Pro (per-user, bundled with M365 E5), Power BI Premium Per User (PPU), and Power BI Premium capacity (now Fabric F-SKUs).
Related: Power BI Pro · Fabric Capacity
Per-user Power BI SKU enabling publishing, sharing, and consumption of premium reports. Bundled with M365 E5; standalone $14/user/month list.
Microsoft's external-facing low-code website platform. Per-site and per-authenticated-user pricing. Successor to Power Apps Portals.
Related: Power Platform
Microsoft's low-code application platform. Includes Power Apps, Power Automate, Power Pages, Power BI, and Power Virtual Agents (transitioning to Copilot Studio).
Related: Copilot Studio · Power Apps Premium
Per-user SKU bundling Power Apps Premium and Power Automate Premium for users of premium connectors and Dataverse-driven apps.
Related: Power Apps Premium · Power Automate Premium
Microsoft's previous-generation conversational AI builder. Substantially replaced by Copilot Studio for new development; existing PVA tenants migrating.
Related: Copilot Studio
Microsoft's legacy enterprise support programme, largely sunset and migrated to Unified Support. Multi-year wind-down complete for new buyers; renewals only available case-by-case.
Related: Unified Support
GitHub Copilot 2025 billing model for advanced-model invocations (e.g., GPT-4o, Claude). Charged per request above included monthly allowance, with model-specific multipliers.
Related: GitHub Copilot
Contractual commitment that per-unit pricing for specified SKUs will not increase during a defined window. Critical lever ahead of price increases like the July 2026 M365 increase.
Related: RBI
Microsoft's monthly-updated document defining product use rights, licensing rules, and SKU-specific terms for Volume Licensing. Successor to the Product Use Rights document. Often changes silently; track monthly.
Related: Product Use Rights
Microsoft's contract document detailing how each licensed product may be installed, accessed, virtualised, and counted. Now consolidated into the monthly Product Terms.
Related: Product Terms
Lower-tier Project for the web SKU. Web-only project management; common downgrade target for over-allocated Project Plan 3.
Related: Project Plan 3
Mid-tier Project SKU adding desktop Project Professional. Often over-assigned in IT and PMO organisations.
Related: Project Plan 1 · Project Plan 5
Top Project SKU adding portfolio management and resource analytics capabilities.
Related: Project Plan 3
Microsoft's data-governance and compliance suite. Components include eDiscovery, Information Protection, Insider Risk Management, Communications Compliance, Data Loss Prevention, Records Management, and Data Map.
Related: Information Protection · Insider Risk Management · M365 E5
Microsoft EA term defining a device that must be licensed. Excludes specific narrow categories such as kiosks running only Windows Embedded or specific industrial-control endpoints.
Related: Qualified User
Microsoft EA term defining a user who must be licensed under the company-wide commitment. Generally any user with access to a covered product, regardless of frequency.
Related: Qualified Device
Renewal-Bound Increase. Microsoft pricing tactic of holding list price during the contract term but applying significant uplift at the next renewal. Counteracted via explicit price-protection language and benchmark anchoring.
Related: Price Protection
Microsoft Purview module providing retention labels, disposition review, and immutable storage controls for regulatory record-keeping. M365 E5 component.
Related: Purview
Azure native tooling suggesting Reserved Instance purchases based on observed consumption. Microsoft's suggested reservations are often over-broad; manual analysis usually identifies more conservative targets.
Related: Reserved Instance
Azure pricing model offering 1- or 3-year commitment to a specific VM size, region, and OS in exchange for 30-72% discount vs pay-as-you-go. Distinct from Savings Plans which provide more flexibility at lower discount.
Related: Savings Plan · Azure Hybrid Benefit
The catalogue of value items included with active Software Assurance. Most are perishable (use-it-or-lose-it within the SA term). Documenting and claiming benefits is a high-leverage cost-recovery activity.
Related: Software Assurance
Software as a Service. Cloud-delivered applications consumed on a subscription basis. Microsoft SaaS includes M365, D365, Power Platform per-user SKUs, and standalone services like Visio for the web.
Microsoft's sales-focused Copilot (formerly Viva Sales). Integrates Outlook, Teams, and CRM signals for sales workflows. Bundled with D365 Sales Premium and available standalone.
Related: D365 Sales · Service Copilot
Software Asset Management Engagement. Microsoft's collaborative version of an audit, framed as helping the customer optimise. The findings typically produce a true-up bill regardless of framing.
Related: Microsoft Verification · Audit Clause
Azure pricing model offering a 1- or 3-year compute-hour commitment that applies to any VM family in any region. Lower discount than Reserved Instances but greater flexibility.
Related: Reserved Instance · Azure Consumption Commit
Server and Cloud Enrollment. Pre-EA variant for organisations with substantial server-product commitments. Now largely consolidated into modern EA structures.
Related: EA
See Server and Cloud Enrollment.
Related: EA
Security Compute Unit. The metering unit for Microsoft Security Copilot. Pooled at the tenant level; reserved-capacity pricing model.
Related: Security Copilot
Microsoft's generative-AI security analyst tool. Billed via SCU capacity reservations rather than per-seat. Often over-committed at signature.
Related: SCU
Microsoft Sentinel cloud-native SIEM. Billed per GB of ingested data plus per analytics-rule execution. Separate from Defender XDR though increasingly tightly integrated.
Related: Defender XDR
D365 Customer Service Copilot capabilities. Bundled with D365 Customer Service Premium.
Related: D365 Customer Service · Sales Copilot
Microsoft Frontline licensing pattern for kiosks and shared workstations used by multiple shift workers. Combined with F1/F3 to deliver per-device economics rather than per-named-user.
Related: F1 · F3 · Per-Device
Microsoft's cloud SharePoint workload bundled with most M365 SKUs. Standalone plans (SharePoint Plan 1, Plan 2) exist for non-M365 deployments.
Related: OneDrive for Business
EA benefit programme providing new-version rights, deployment planning services, training vouchers, License Mobility, Step-up rights, Home Use Program, and 24x7 support. Commonly paid for, partially used.
Related: SA Benefits · New Version Rights · Step-up
See Step-up.
Related: Step-up
Services Provider License Agreement. Monthly per-seat or per-core licensing programme for hosting providers delivering Microsoft software-as-a-service to third parties. Heavy compliance scrutiny; audit-prone.
Related: License Mobility · BYOL
Microsoft compliance review of a SPLA-licensed hosting provider. Documentation requirements are extensive; SPLA settlements regularly run into the millions due to retroactive billing.
Related: SPLA · Microsoft Verification
Microsoft relational database server. Licensed per-core or via Server+CAL. Editions: Standard, Enterprise, Developer, Web. Critical Azure Hybrid Benefit and BYOL implications.
Related: Per-Core · Azure Hybrid Benefit
Software Assurance benefit allowing upgrade from a lower SKU to a higher SKU mid-term at the price differential rather than full new licence. E.g., E3 to E5.
Related: Software Assurance · SA Benefits
Twelve months prior to EA renewal. The canonical milestone for foundation work: baseline inventory, stakeholder mapping, governance, forecast.
Related: EA Renewal Timeline · T-9
Three months prior to EA renewal. Execution milestone: counter-proposals, escalation, contract redlines, signature.
Related: EA Renewal Timeline
Six months prior to EA renewal. Alternatives milestone: LSP RFPs, MCA-E evaluation, CSP routing, BATNA development.
Related: EA Renewal Timeline · T-3
Nine months prior to EA renewal. Optimisation milestone: licence audit, Frontline reclassification, SKU evaluation, threat-modelling against price changes.
Related: EA Renewal Timeline · T-6
Microsoft Teams calling add-on with PSTN connectivity. Two flavours: with calling plan (per-user/per-month inclusive minutes) and without (BYO carrier).
Related: Teams Premium
Microsoft Teams paid add-on with advanced meeting features (intelligent recap, virtual appointments, advanced security). Per-user/per-month add-on to base Teams.
An instance of a Microsoft cloud directory and the associated subscriptions. Multi-tenant arrangements common in large organisations; tenant boundaries matter for licensing pooling.
Related: Entra ID Free
EA discount band determined by seat count and SKU mix. Pre-2026 tier discounts were automatic; the EA tier collapse made them negotiated.
Related: Level A · EA Tier Collapse
The (rare) act of reducing seat counts mid-term in a Volume Licensing agreement. EA generally prohibits true-down within the 3-year term; MCA-E and CSP-NCE permit downward changes at subscription anniversary.
Annual EA reconciliation event reporting net-new seats, SKU step-ups, and over-baseline usage to Microsoft, generating an additional invoice. Anniversary-bound; uncounted seats become audit exposure.
Related: Anniversary · True-Down
Microsoft Intune Tunnel. VPN gateway for managed mobile devices. Component of Intune Suite.
Related: Intune Suite
Microsoft's enterprise support contract; replaced Premier. Three named tiers (Core, Advanced, Performance) priced as a percentage of license spend (currently 12-15%). 2026 pricing model formalised pricing-floor mechanics and removed several flexible-attach options.
Related: Premier Support · Unified Support Tiers
The Core, Advanced, and Performance levels of Microsoft Unified Support, each with defined SLA, response-time, and dedicated-engineer commitments at progressively higher percentage of license spend.
Related: Unified Support
User Subscription Licence. The per-user subscription right granted by most modern Microsoft cloud SKUs. Distinct from device subscription licences.
Related: Per-User
Microsoft Entra verifiable-credentials platform. Decentralised identity issuance and verification. Per-credential consumption pricing.
Related: Entra Suite
Web-only Visio diagramming SKU. Lower price than Plan 2; common rightsizing target for users with desktop Visio Plan 2 they rarely open.
Related: Visio Plan 2
Desktop-and-web Visio diagramming SKU. Per-user pricing; over-allocated in many estates.
Related: Visio Plan 1
Microsoft developer subscription (formerly MSDN). Multiple tiers (Professional, Enterprise) bundling Visual Studio IDE, Azure dev/test credits, and dev/test licensing rights for most Microsoft software.
Related: MSDN
Microsoft Viva employee-experience platform. Modules include Viva Insights, Viva Topics (deprecated), Viva Learning, Viva Glint, Viva Pulse, Viva Engage (formerly Yammer), and Viva Goals. Per-module per-user pricing.
Related: M365 E3
Volume Licensing. The umbrella designation for Microsoft enterprise-scale licensing programmes.
Related: Volume Licensing · EA
Volume Licensing Service Center. Microsoft's portal for managing Volume Licensing agreements, downloading media, and reviewing entitlements. Migrating to the Microsoft 365 admin centre experience.
Related: Volume Licensing
Microsoft's umbrella term for enterprise licensing programmes: EA, MPSA, Open Value, CSP, EES, SCE. Successor commercial vehicle is Modern Commerce.
Related: EA · MPSA · Modern Commerce
Microsoft server operating system. Editions: Datacentre (unlimited VMs), Standard (2 VMs), Essentials (small business). Licensed per-core with 16-core minimum per server.
Microsoft Entra add-on covering service principals, managed identities, and other non-human identities. Per-identity pricing for active workload identities at scale.
Related: Entra Suite
The Microsoft licensing vocabulary changes faster than any other vendor's. New SKUs ship monthly, billing mechanics shift quarterly, and bundling decisions reshape SKU economics annually. This glossary is the working snapshot — bookmark it and re-check before any major procurement decision. For the underlying playbook, see the EA negotiation pillar, the Microsoft 365 licensing pillar, the Copilot licensing pillar, the audit defence pillar, or the Azure licensing pillar.
If a term is missing or you spot a definition that no longer reflects current Microsoft practice, tell us — our advisors review every reader correction.