New Commerce Experience & Microsoft Customer Agreement (MCA): Impact on Enterprises in 2025

Introduction — Why NCE and MCA Reshape 2025 Licensing

Microsoft is fundamentally changing how enterprises buy its software and cloud services. The traditional Enterprise Agreement (EA), long valued for its volume discounts and flexibility, is no longer the default choice for many customers.

Starting in 2025, Microsoft has begun steering a lot of organizations (especially mid-sized ones) away from EAs and onto its New Commerce Experience (NCE) and Microsoft Customer Agreement (MCA) models. Microsoft touts these changes as “simplifying” licensing and aligning with a cloud-first strategy.

However, from a buyer’s perspective, NCE and MCA often mean less flexibility and higher costs unless you adapt your approach. Read our ultimate guide to Microsoft’s New Pricing & Regulatory Changes.

CIOs, CFOs, IT procurement leads, and licensing managers facing renewals in 2025 need to understand these new frameworks, how they differ from the old EA, and how to protect their organizations in negotiations.

In short, Microsoft’s licensing shift aims to streamline its sales and boost cloud subscriptions, but it also reduces built-in discounts and locks customers into longer commitments.

To avoid surprises, you’ll need to rethink your renewal strategy with a healthy skepticism toward Microsoft’s framing and a focus on your own interests.

Let’s break down what NCE and MCA actually entail, the key differences from an EA, and how enterprises can navigate (and negotiate) this new landscape in 2025.

What Is the New Commerce Experience (NCE)?

The New Commerce Experience (NCE) is Microsoft’s modern purchasing program for cloud subscriptions, introduced for partners and customers over the past couple of years.

Under NCE, Microsoft standardized how you buy Microsoft 365, Dynamics 365, and other seat-based subscriptions (largely through the Cloud Solution Provider channel).

Key features of NCE include:

• Standardized Monthly vs. Annual Pricing: NCE offers a choice between monthly terms or longer commitments (annual or multi-year) for licenses. Monthly-term subscriptions come at a roughly 20% higher price than committing for a full year. This premium is essentially a fee for the flexibility it provides. (As of 2025, Microsoft even added an extra 5% charge for customers who pay month-to-month on an annual commitment, further pressuring companies to pay upfront or commit longer.)
• Rigid Cancellation Policies: Under NCE, once you purchase a subscription, you have a very limited window (often 72 hours, now extended to 7 days in some cases) to cancel or reduce the quantity for a prorated refund. After that brief window, you’re locked in for the term you selected. For an annual subscription, that means you pay for the full year even if your needs change or you overestimated. This represents a significant shift from traditional models, where partners or Microsoft might allow prorated reductions more flexibly.
• Lock-In Mechanics: Because of the above, NCE effectively locks you into the number of licenses (seats) you commit to. Need to scale down users mid-term? You generally cannot drop licenses until the renewal date of that subscription term. (You can always add more licenses during the term – Microsoft will happily take more money – but you can’t scale back without penalty.) This is a reduction in flexibility that enterprises enjoyed under an EA, where, at least once a year, you often had a chance to adjust counts.
• Partner Ecosystem Changes: The NCE also changed how Microsoft’s partner resellers operate. Cloud Solution Provider (CSP) partners must now sell under these stricter rules. Their margins are standardized, and Microsoft’s system limits their ability to offer custom billing or cancellation terms. For enterprise buyers, this means choosing a CSP partner is more about the support and services they provide, since Microsoft’s NCE rules largely dictate the pricing and terms. Some partners may still offer slight discounts or value-added services, but the days of partners deeply negotiating license terms on your behalf are fading. Additionally, for larger customers, Microsoft may encourage a direct relationship (MCA) instead of using a partner at all, fundamentally changing who you work with on licensing.

In practice, the New Commerce Experience is Microsoft’s way of enforcing consistency (and profitability) across all customers. It simplifies Microsoft’s backend and makes revenue more predictable.

But for enterprises, NCE often feels like a loss of control: you either commit to longer terms or pay a premium for month-to-month flexibility. And even if you choose flexibility, Microsoft can tweak pricing policies (as seen in 2025’s new fees) to nudge you toward longer commitments.

Knowing these mechanics, enterprises must plan carefully – for example, locking in a year of licenses only for stable, core staff, and using the costly monthly option sparingly for temporary or flexible workers.

Read more about the Microsoft 2025 EA price increases, Microsoft 2025 Price Hikes: Volume Discounts Vanishing, Explained

What Is the Microsoft Customer Agreement (MCA)?

The Microsoft Customer Agreement (MCA) is the newer contract framework Microsoft wants customers to sign instead of the classic EA.

It’s an “evergreen” agreement with no fixed end date. Once you sign an MCA, you can keep buying Microsoft products and services under it indefinitely (until you or Microsoft terminates it).

Here’s what defines the MCA and how it works:

• Direct Purchasing, Especially for Azure: An MCA establishes a direct purchasing relationship between your organization and Microsoft. For enterprises above a certain size (typically ~2,400+ users, which Microsoft calls “Enterprise Motion”), this means you no longer renew through a Licensing Solution Provider (LSP) as you did with an EA. Instead, you work with Microsoft sales reps directly, and purchases are often made via Microsoft’s portals. (For smaller organizations, there’s also an MCA “Breadth” option which still involves a CSP partner acting as the reseller, but the MCA terms govern the relationship.) Microsoft is positioning MCA especially for Azure and cloud subscriptions – for example, moving Azure customers off the EA onto an MCA so they can continuously consume Azure without a 3-year renewal cycle.
• No Fixed Term & No Minimums: Unlike an EA, which runs for a 3-year term, the MCA has no specific end date or renewal cycle. You aren’t committing to a contract that expires; you’re simply accepting Microsoft’s terms, and then you can add or remove services as needed. There’s also typically no minimum purchase requirement to sign an MCA (whereas an EA requires 500+ users/devices at a minimum). This makes the MCA attractive to Microsoft as a one-size-fits-most contract: any customer can sign it and start buying cloud services, no big up-front purchase needed.
• Simpler, But Fewer Negotiation Levers: The MCA is a standardized contract – much shorter and simpler than the EA enrollment paperwork. That sounds good (less complexity), but it also means fewer customization options. Under an EA, enterprises often negotiate custom terms or concessions (such as special discounts or unique contract clauses) at each renewal. With an MCA, because it doesn’t renew, you lose that regular negotiation checkpoint. Microsoft typically offers pricing incentives “in return for growth” – e.g., if you commit to ramping up Azure consumption or adding more Microsoft 365 services, they might grant you special discounts or credits. But these are negotiated on a case-by-case basis and not built into the contract structure. In general, MCA pricing starts at Microsoft’s list prices (the same prices you’d find on Microsoft’s website) with no automatic volume discount tiers. Any discount must be agreed upon separately, often tied to a usage commitment or a special approval.
• Focus on Cloud Subscriptions (Azure, M365) and Limited Software Assurance: The MCA is clearly cloud-focused. It’s very easy to provision Azure services or Microsoft 365 subscriptions under an MCA. For traditional on-premises licenses, it’s possible to buy them through an MCA as well. Still, Software Assurance (SA) – the upgrade and support coverage for perpetual licenses – is generally not offered via MCA. Microsoft’s view is that you should move to subscriptions. Suppose you still need, say, Windows Server licenses with SA. In that case, you might have to use a separate legacy agreement (like an open volume license or MPSA) or accept that under MCA, you’ll be buying subscription versions of those products. This can mean losing some perks that SA used to provide (e.g., training vouchers, downgrade rights, etc.). Enterprises must plan for this if they have a hybrid environment; moving to MCA could mean phasing out those on-prem entitlements or budgeting for new subscription equivalents.

In summary, the MCA is Microsoft’s modern replacement for volume licensing agreements like the EA. It offers simplicity (one master agreement, with no expiration) and agility (you simply add or remove services as needed).

However, it also shifts the burden to the customer to continuously manage and optimize their usage, as there’s no natural renewal point to adjust quantities.

And it shifts bargaining power to Microsoft – without a looming EA renewal deadline, Microsoft knows you’re less likely to overhaul everything at any single point in time, so they face less pressure to offer spontaneous discounts.

Enterprises entering an MCA should be prepared with strong internal license management (to avoid sprawl and over-payment).

They should negotiate upfront any concessions (like discounts or price protections) they need, because you won’t have as many chances later.

EA vs MCA vs NCE — Key Differences

How exactly do the traditional Enterprise Agreement, the new Microsoft Customer Agreement, and the New Commerce Experience subscription model compare?

The table below highlights key differences in contract structure and flexibility that enterprises should know:

• Complexity but Negotiability: EA contracts are complex, but that allows for custom terms. Risk if you didn’t negotiate well – but also an opportunity to secure special pricing or protections.
• Expiration Cliff: At renewal time, you face a big decision point; if not prepared, you might accept a costly renewal to avoid disruption. | – Continuous Oversight Required: Without a fixed renewal cycle, it’s easy to let usage sprawl or miss the chance to eliminate unused services. Companies can overspend if they don’t actively manage licenses every month/quarter.
• Fewer Automatic Discounts: You might end up paying more for the same services unless you negotiate and commit to growth. Budgeting needs to account for potentially higher unit costs.
• Limited Remedies: If something isn’t working for you, there’s no automatic end date to trigger changes – you have to proactively renegotiate with Microsoft (which can be tough without the leverage of a pending expiration).
• Support & Advisory Gaps: Large enterprises going direct via MCA lose the licensing advisory support that some LSPs provided with EAs, so you need internal expertise or third-party help. | – Lock-In of Annual Terms: Misjudge your needs and you’re stuck until the term ends (e.g., paying for a license no one uses). This can lead to waste if not carefully forecasted.
• Premium for Flexibility: The significant cost uplift for monthly terms can punish those who need that flexibility. Over the course of a year, a 20% higher cost per seat adds up if you stay month-to-month.
• Multiple Renewal Dates: With many subscriptions each having its own start/end, you face “renewal” decisions year-round. Missing a renewal could auto-renew you for another term without a chance to cancel. It’s operationally complex to track.
• Partner Lock-In: If you buy via a CSP partner, you are somewhat tied to that partner’s support and billing processes. Switching partners or going direct later is possible but not seamless, so choose partners wisely. |

Note: In 2025, Microsoft is also standardizing pricing across these models, meaning large EA customers are no longer guaranteed much lower prices than others. They’ve aligned many cloud services to have a single global price list.

This reinforces that the differences come down to more contract flexibility and support, rather than finding a unique bargain in one versus the other.

Now, let’s explore what these changes actually mean for enterprise buyers.

Buyer Impact in 2025

For enterprise customers, the shift to NCE and MCA in 2025 brings several significant impacts and risks:

• Loss of Volume Discounts: If your organization previously enjoyed steep discounts for being a large-volume EA customer, be prepared for changes. Microsoft’s new approach pegs prices closer to its retail web pricing for everyone. The old EA tiered pricing levels (A–D) are being phased out for cloud services. This could translate to noticeable cost increases at renewal if you simply transition to MCA or CSP without renegotiating. Enterprises must proactively ask, “What will our effective price per license be under the new deal?” rather than assuming size still equals discount. In many cases, you’ll need to negotiate to preserve any special pricing.
• Higher Costs for Month-to-Month Flexibility: Many organizations valued the EA for allowing true-downs annually, which gave some flexibility. Under NCE, if you want the ability to drop licenses on short notice, you have to opt for monthly subscriptions – and those come at ~20% higher price. Over a year, paying 20% more per seat is a steep “tax” for flexibility. This creates budget pressure: some enterprises will try to save money by committing annually to lock in lower rates, but then risk being stuck with unused licenses if their needs shrink. Others might bite the bullet on the premium for a subset of licenses. Either way, budgeting and license management become more complex, as you may have a mix of terms and a constant evaluation of who truly needs a long-term license. In 2025, Microsoft even added a further 5% price increase on certain billing options, reinforcing that costs are rising for those who don’t commit to longer terms.
• Reduced Ability to True-Down Mid-Term: With EAs, once a year, you could reduce your license counts to avoid paying for unused capacity. In the NCE/MCA world, that safety valve is largely gone outside of renewal points for each subscription. If your company has a change – say you divest a business unit or undergo layoffs – you might be stuck holding excess licenses until the term is up. The financial risk of over-estimating needs is higher, and the onus is on you to plan license quantities in smaller increments or negotiate some custom clause. This also means you should scrutinize 3-year subscription offers (now available for some products in NCE) – a multi-year commitment might lock you in even longer than the old EA would have, without the same true-down rights you had in an EA.
• Complexity for Multi-Entity and Global Rollouts: Enterprises with multiple subsidiaries or global operations could face new complexity under these models. Under an EA, you often had a single umbrella agreement or linked enrollments that provided centralized oversight and standardized terms globally. With MCA and CSP, it may result in fragmentation: for example, one region might purchase via a local CSP partner, while another part of the company buys directly under the MCA. Different parts of the business could end up with different renewal dates and even different rules if not coordinated. Additionally, currency and regional price “harmonization” adjustments that Microsoft now makes could impact different geographies at different times. Managing licensing across a global organization may require more effort to ensure you’re getting consistent pricing and that no subsidiary accidentally auto-renews something without your knowledge. Enterprises will need a clear internal process to coordinate purchases and renewals in the NCE/MCA world.
• Overcommitting to Bundles (E5, etc.): Microsoft loves to push bundles like Microsoft 365 E5 (the high-end suite with all the bells and whistles). In an EA, you might have adopted E5 across the board due to a negotiated deal. In the future, if you roll those E5 licenses into an NCE/MCA deal, be cautious: without the EA’s volume discount, you might be paying for premium features that not all users need. If budget is a concern, 2025 is a good time to re-evaluate your bundles and mix of licenses. Perhaps not everyone needs E5; some may be able to use E3 or smaller bundles. Under rigid NCE terms, if you lock into all E5 for a year and later realize half of those users aren’t using the advanced features, you’ve wasted money. Therefore, the new licensing model indirectly encourages enterprises to be more granular and intentional about assigning licenses at the appropriate level – to avoid overpaying for overprovisioned bundles.

In sum, the NCE and MCA transition is a double-edged sword: it might simplify Microsoft’s life and even some of your processes, but it shifts more cost, risk, and management burden onto the customer. Companies must actively mitigate these impacts through diligent planning and negotiation – which we’ll cover next.

Checklist — Are You Exposed to NCE/MCA Risks?

How can you tell if your organization needs to worry about these changes right now? If you check yes to any of the questions below, you likely face exposure to the risks of NCE/MCA and should take action in your licensing strategy:

✓ Renewal window in 2025? (Is your EA or major Microsoft contract ending in 2025, requiring a decision on what’s next? If so, Microsoft will probably push you toward the new models – be prepared for change.)

✓ Heavy use of monthly CSP SKUs? (Are you currently buying a lot of Microsoft 365 or other licenses on a month-to-month basis through a CSP partner? Those will cost more under NCE’s pricing. You might need to consider annual commitments or budgeting for the premium if flexibility is required.)

✓ Planning Azure growth without flexibility clauses? (Do you have big Azure projects ramping up, but no contractual safeguards? Under an MCA, if you expect Azure spend to balloon, ensure you negotiate something – like consumption discounts or the ability to adjust commitment if plans change. If you go in with pay-as-you-go expecting old EA-like discounts later, you could be in for a surprise.)

✓ Global subsidiaries under different agreements? (Do various parts of your company use different Microsoft agreements – some on EA, some on CSP, etc.? When moving to NCE/MCA, this can get messy. You might lose consolidated pricing and have to manage multiple partner relationships. It’s a risk if not addressed, as some units might pay more or renew inadvertently. Plan a unified approach.)

✓ Overcommitted to E5 bundles? (Are you all-in on top-tier Microsoft 365 E5 licenses or similar bundles? If you haven’t analyzed usage recently, you might be over-licensed. Under a new agreement without legacy discounts, that overcommitment will cost you dearly. It’s time to assess if a mix-and-match strategy would serve you better before you lock those in on NCE terms.)

If any of these points hit home, it’s a signal to take a harder look at your Microsoft licensing strategy in 2025. The next sections guide how to negotiate and strategize under the new rules.

Negotiation Strategies Under NCE & MCA

Just because Microsoft’s new commerce models have “standard” pricing and terms doesn’t mean enterprise buyers are without leverage. You absolutely can – and should – negotiate and strategize to get a better deal.

Here are key negotiation approaches under NCE/MCA:

• Push for Custom Discounts (Especially with Growth Commitments): Microsoft’s sales teams still have the flexibility to offer discounts or special pricing, but you typically need to give them a business justification. One effective tactic is to leverage your future growth in Azure or Microsoft 365. For example, if you expect to double your Azure usage in the next year, use that as a bargaining chip for better rates or credits under an MCA. Likewise, if you’re considering a big move from E3 to E5 licenses, ask for discount guarantees. Make sure any discount or rebate you discuss is formalized in writing (e.g. a discounted unit price or a credit program) – verbal assurances won’t do. Microsoft may say “our list prices are firm,” but significant commitments or competitive situations can still unlock custom deals.
• Use CSP Partner Competition to Your Advantage: If you fall into the category that can use partners (or you simply prefer it), don’t assume you must take Microsoft’s first offer via one reseller. Shop around among CSP partners. Different partners have varying levels of margin and incentives; some might cut you a better price (even if small) or bundle in free services (migration help, training, enhanced support) to win your business. Partners know that under NCE, they can’t change Microsoft’s rules, but they can compete on value-add and customer service, and sometimes they’ll share a bit of their margin on big deals. Let them know you’re evaluating multiple options. Even if you intend to sign an MCA directly with Microsoft for core things, you might keep certain workloads or subsidiaries on a CSP to see if a partner can manage them more cost-effectively. Creating this competitive pressure reminds both Microsoft and resellers that you have choices.
• Escalate EA vs. MCA Concerns to Microsoft Execs: If you’re a large account unhappy with what the new deal is shaping up to be, don’t hesitate to escalate within Microsoft’s hierarchy. For instance, if Microsoft is forcing you off an EA and you’re worried about cost increases or losing flexibility, articulate those issues clearly to your Microsoft account manager and even up the chain to a regional sales director or Microsoft’s enterprise negotiation specialist. Sometimes, highlighting “We might not be able to move to MCA because of X, Y, Z, and could consider alternate solutions” will prompt Microsoft to find creative solutions (like extended price protections or a hybrid arrangement). Microsoft does not want to drive customers to competitors (or to stagnate on old software due to cost). Use the comparison of EA vs. MCA to show how certain things are getting worse for you – and ask Microsoft directly how they plan to address it. This can lead to special concessions, at least in the short term, to ease the transition.
• Negotiate Price Caps and Carry-Over Discounts: One specific ask to consider: price increase caps. Microsoft has been adjusting pricing regularly (often citing currency fluctuations or “harmonization”). Try to negotiate a clause that caps the percentage increase of your key products year-over-year during your agreement or for a set period. Similarly, if you had a certain discount under your EA (say 15% off Office 365), insist that your new arrangement honors something similar. Even if the MCA has no formal discount structure, you can negotiate a custom discount that effectively continues your prior pricing for a while. Microsoft might push back, but if staying with them is contingent on reasonable price continuity, they often find a way (especially if you’re a significant account). The key is to raise these points before you commit to the new deal; after you sign, you lose leverage.
• Align Azure Commitments with Realistic Usage: Microsoft may dangle incentives if you commit to spending a certain amount in Azure over a year or three years. This can be a way to get discounts under an MCA (since volume tiers are gone, a consumption commitment is the workaround). If you go this route, be very realistic with your Azure forecasts. Do not commit to more than you are confident you will consume. Remember, if you under-consume an Azure commitment, you might still be financially on the hook for the full commitment amount. It’s better to start a bit conservatively with an option to increase later, rather than overcommit and waste the budget. You can also negotiate flexibility, like the ability to revisit the commitment in a year if your cloud strategy changes – it might or might not be granted, but asking costs nothing. The bottom line: use Azure (or other product) growth as leverage, but don’t let Microsoft’s optimism or pressure lead you to a commitment that becomes a burden.

In all negotiations, maintain a “buyer-first” mindset. Microsoft’s reps will often frame NCE and MCA as fixed offerings with little wiggle room – but as an enterprise customer, you still have influence.

Be prepared with data (your past spending, alternative quotes, etc.), start conversations early, and be willing to push for what you need. The new agreements are new to Microsoft, too, and they want success stories – use that to ensure your success story includes a fair deal.

Alternatives and Hybrid Approaches

One size does not have to fit all in your Microsoft licensing strategy. In fact, many enterprises in 2025 are finding that a hybrid approach gives them the best of both worlds – balancing cost efficiency and flexibility.

Here are some ways to mix and match:

• Mix an EA (or MCA-E) for Core Licensing with CSP for Flexibility: If you’re a large organization that still qualifies for an EA (or its direct replacement, MCA for Enterprise), you might use that for your stable, enterprise-wide needs – e.g., core Microsoft 365 licenses for all employees, or major server licenses – to get the best pricing and a single agreement to manage. Then, use CSP/NCE for variable or project-based needs. For example, if you regularly spin up temporary teams, contractors, or dev/test environments that need cloud services for 3-6 months, those could be purchased via a CSP on monthly terms without disturbing your main agreement. This hybrid model allows you to maintain a degree of flexibility (through the CSP channel) without incurring a premium for your entire user base.
• Use an MCA for Azure-heavy spend, but keep CSP for User Software: Some enterprises are far along in their cloud journey, such that Azure consumption dwarfs their Microsoft 365 spend. In such cases, negotiating a good deal on Azure under an MCA might be the priority – you sign the MCA to get any Azure commit discounts and work closely with Microsoft on that. Meanwhile, for your user-based licensing (Office 365, etc.), you might actually find value in sticking with a CSP partner. The partner can handle day-to-day support, license changes, and perhaps offer slightly better terms or services for the Microsoft 365 side. Essentially, Azure and M365 don’t have to be on the same agreement if separating them yields benefits. Be mindful that splitting things means managing more contracts, so weigh the administrative overhead.
• Consider a Phased or Pilot Transition: You don’t necessarily need to move everything to NCE/MCA overnight (unless Microsoft forces your hand by not renewing your EA). If possible, do a pilot – maybe move one department or region to CSP first to learn the ropes, or shift a subset of your licenses to an MCA and see how the billing and management work for you. During this time, keep the rest on the status quo. This phased approach can identify issues before you’re fully committed. It also gives you comparative data: e.g., did the pilot group end up paying more or less? Were they able to manage license adjustments smoothly? Use those insights to adjust your broader strategy.
• Retain Some Perpetual or Alternate Licensing for Niche Cases: While Microsoft is all-in on cloud subscriptions, you might have certain niche needs (a factory machine that needs a Windows OS licensed, or a lab that needs isolated Office installs) where perpetual licenses with Software Assurance made sense. Consider keeping a small Volume Licensing agreement (such as an MPSA or OEM purchase) for those scenarios, separate from the NCE/MCA world. It can sometimes be cheaper and simpler for static needs. This way, your main spend is in modern licensing, but you’re not forcing everything into a subscription if it doesn’t fit. Just be careful to stay compliant and track those separately.

The theme here is flexibility: Microsoft’s new licensing isn’t very flexible by default, so you have to create flexibility through your strategy.

A hybrid approach can optimize costs – you use the channel or agreement that is most cost-effective for each segment of your usage. It may require more coordination, but the savings and agility can be worthwhile.

Common Mistakes to Avoid

When adapting to NCE and MCA, enterprises sometimes stumble. Here are common mistakes – and how to avoid them:

• Assuming NCE Pricing Is Truly “Non-Negotiable”: Microsoft might present the New Commerce pricing as flat and final, giving the impression you can’t do anything about it. Don’t buy that wholesale. While list prices are standardized, large customers or strategic deals often still get exceptions. Maybe it’s an extra discount on a large bundle, or a one-time credit, or grandfathering an old price for a year – but there’s usually something you can ask for. The mistake is to not even try. Always engage in negotiation; the worst outcome is Microsoft says no. More often, if you have a legitimate case (and a competitive alternative in mind), they will find some way to sweeten the offer.
• Overcommitting to Multi-Year Terms without Escape Clauses: The allure of a 3-year subscription (now available for products like M365 E3/E5 under NCE) includes locking the price and maybe slight discounts. But if you commit all-in for 3 years and your circumstances change, you cannot reduce your quantity or get out – a potentially worse situation than an EA, which at least had known renewal endpoints. A mistake would be treating a 3-year NCE like the old EA – they’re not the same because true-down doesn’t exist mid-term. If you do go multi-year, consider negotiating a break clause or at least split your purchase into multiple subscriptions (e.g., two 3-year subscriptions of half the quantity each, staggered start dates) so you’re not completely stuck. Always forecast conservatively for multi-year: commit to what you’re sure of, and handle growth separately.
• Ignoring Regional Price Harmonization and Currency Fluctuations: Microsoft has started adjusting prices periodically to maintain parity across regions (often called price harmonization). For example, if your country’s currency weakens against the dollar, Microsoft might raise local prices to compensate. If you ignore this, you might be shocked by a 10% price jump one year, unrelated to any product change. Don’t assume steady prices. In your budgeting and in negotiations, address this: ask for a cap on currency/region-based increases, or budget extra for it. And if you operate in multiple regions, be aware that price changes might hit one region earlier – coordinate with those offices so they aren’t caught off guard. The mistake here is not planning for these known periodic adjustments that Microsoft has already publicized.
• Treating the MCA as a “Light EA” Without Due Diligence: It’s easy to think the MCA is just a simpler, nothing-to-worry-about replacement for an EA. But treating it too casually is dangerous. Don’t skip the fine print. For instance, under an MCA, you might assume you have the same usage rights or secondary benefits as your EA – not always true. Check things like: how are you managing compliance for affiliates now? What happens if Microsoft audits you (the terms might differ)? Do you lose training credits or support that you had via Software Assurance? We’ve seen companies sign an MCA quickly and later realize they lost some strategic benefits they relied on. The MCA can be “lighter” in paperwork, but you should still approach it with the same rigor as any enterprise contract. Have your legal and IT teams review the terms and compare them side-by-side with your old EA clauses. Make sure you’re not giving up something critical, or if you are, you know how you’ll replace that value elsewhere.

Avoiding these mistakes comes down to one principle: don’t assume.

Verify your understanding of the new agreements, pressure-test your plans under various scenarios, and get clarity in writing from Microsoft or partners on any ambiguous points.

12-Month Playbook for Enterprises Facing NCE/MCA in 2025

If your organization’s Microsoft renewal or transition is on the horizon, it pays to get started early.

Here’s a suggested 12-month timeline (counting down to your EA expiration or intended switch date) to maximize your negotiating position and make a smooth transition:

• 12–9 Months Before Renewal: Audit and Strategize. Take inventory of your current licenses, usage levels, and spend. Identify all the Microsoft services you’re using, what you’re paying, and how that compares to actual need. Begin modeling scenarios: What would our costs be under an MCA or CSP at list prices? Where are we under-utilizing licenses that could be cut? Also, pinpoint any unique contract benefits in your EA (special discounts, grandfathered products, Software Assurance benefits) that you need to address in a new deal. Use this period to form an internal strategy and set goals: for example, “We need to keep cost increase under 5%” or “We want the flexibility to drop 10% of licenses if needed.”
• 9–6 Months Before Renewal: Benchmark and RFP. Start engaging the market. If you’re considering CSP partners, now is the time to talk to a few. Ask for quotes on the equivalent of your current usage under NCE pricing. In parallel, see if Microsoft will provide a preliminary quote for an MCA based on your current and projected spend. This is essentially a benchmarking exercise – you want to know if moving to CSP could save money or provide services that doing an MCA direct wouldn’t, and vice versa. You might even issue a formal Request for Proposal (RFP) to a short list of Microsoft LSPs or CSP providers, outlining your needs and asking for their best terms (including any extra value they add). This not only gives you pricing data, but also signals to Microsoft that you have alternatives and are price-conscious. During this window, also keep an eye on Microsoft announcements – any new pricing changes or programs for 2025 – so you can factor those in.
• 6–3 Months Before Renewal: Negotiate with Microsoft (and Choose Partners). By now, you should have decided the route you’re leaning towards (MCA direct vs. CSP, or a mix). Begin formal negotiations with Microsoft and/or the chosen partner. Present them with your findings: “We’ve benchmarked costs and see we’d pay 15% more under your first offer – that’s not acceptable, here’s what we need…” etc. Use those scenario-based asks: for instance, “If we move these 1,000 users to E5, we need a 10% discount to keep it within budget,” or “If we commit to $2M in Azure over 2 years, we want a step-up discount schedule or some free credits.” Don’t be afraid to pit options against each other: “We could go all-in with a single MCA, or we might split to two CSP providers – what can Microsoft do to make the single MCA more attractive for us to consolidate?” This is the time to also negotiate contract terms (not just pricing). Ask for things like the ability to have co-term end dates for subscriptions, or a longer cancellation window, or billing adjustments if you divest part of your company (get it in writing how that would be handled). Keep pushing until you reach a tentative agreement that meets your must-haves or as close as possible.
• 3–0 Months Before Renewal: Finalize and Prepare for Transition. In the last few months, nail down the deal on paper. Ensure the contract (MCA or CSP agreement and orders) reflects every concession and detail you negotiated – nothing is real until it’s signed. Double-check the fine print one more time. Once signed, start preparing operationally: if moving to CSP, coordinate with the partner on tenant setup, transferring licenses, and any training your IT staff may need on their portal. If moving to MCA, get access to Microsoft’s admin and commerce portals sorted out and ensure billing details are correct. Also, clean up your licensing environment before the cut-over. For example, if you have 100 unused licenses hanging around, remove them before you transition so you’re not carrying extra baggage into the new term. Similarly, communicate with end-users if there will be any changes (though ideally, a shift from EA to CSP/MCA is a backend change and users won’t notice). Lastly, brief your finance teams that billing will look different (perhaps monthly invoices now instead of annual, etc.) to avoid confusion post-renewal.

Following this timeline helps avoid last-minute scrambles.

Microsoft typically knows 6+ months out that you’re coming up for renewal; you should too, and use the time to your advantage. By renewal time (0 months), you want to be in a position where all that’s left is executing the plan, not scrambling to decide on one.

FAQs

Q: What’s the difference between the Microsoft Customer Agreement (MCA) and the Enterprise Agreement (EA) in 2025?
A: The EA is a traditional 3-year contract with negotiated terms and volume-based pricing, while the MCA is an ongoing, no-expiration agreement that uses Microsoft’s default pricing (with any discounts being custom-negotiated). In 2025, Microsoft is moving many mid-sized customers to the MCA, meaning you won’t have the same automatic renewal negotiations or built-in discounts. The MCA is simpler (with no annual true-ups or lengthy paperwork), but it places the onus on the customer to manage and negotiate proactively. Essentially, EA was about upfront commitment and periodic negotiation; MCA is about continuous consumption and ad-hoc negotiation when needed.

Q: Does the New Commerce Experience (NCE) eliminate flexibility for enterprises?
A: NCE certainly reduces flexibility compared to the past. Once you commit to an annual (or multi-year) subscription under NCE, you can’t reduce those licenses until the term is over. That said, you do have the option to choose monthly term licenses for some products, which gives you the ability to scale down or cancel any given month – but you’ll pay roughly 20% more for that privilege. So flexibility now comes at a direct cost. Also, you might find flexibility limited in other ways: e.g., no ability to temporarily suspend licenses, and any mid-term additions instantly become part of your commitment. For most enterprises, it feels like a significant lock-in compared to the old month-by-month adjustments you could do under legacy CSP programs or the annual true-down of an EA.

Q: Can we still get discounts under an MCA, or is everything full price?
A: You can still get discounts, but they’re not automatic. Under an MCA, Microsoft doesn’t have a public discount schedule – it’s case-by-case. Large enterprises can and do negotiate discounted pricing based on the scale of their purchase or the strategic value they bring as a customer. Additionally, Microsoft might offer targeted programs (for example, if you’re migrating a big workload to Azure or adopting a new product like Security or AI services, they might give promotional discounts or funds). The key is to ask and make a strong business case. If you simply roll over into an MCA without negotiating, you’ll likely pay list prices. Another tip is to involve a Microsoft licensing specialist or consultant; they often know where discounts are possible and how to structure your asks.

Q: Should we move everything to CSP (partner licensing) instead of dealing with Microsoft directly?
A: It depends on your organization’s needs. CSP via a partner can offer more hands-on support and, in some cases, a bit more flexibility in billing, plus you might get other services bundled in. For some mid-sized companies, using a CSP for all licensing is simpler, and the cost difference is negligible or even better if the partner gives a slight break. However, very large enterprises might benefit from a direct relationship (MCA), especially for Azure, where the scale is huge and you want direct Microsoft engagement and perhaps better pricing for big commitments. There’s also a hybrid approach – you could put Azure or core licenses on an MCA and use CSP for specific things (as discussed earlier). Evaluate the partner’s expertise: a good partner can help manage your licenses closely, whereas Microsoft Direct will expect you to do a lot of self-service. Additionally, consider internal effort – managing multiple CSPs or a mix of agreements may require more vendor management on your part. There’s no one-size-fits-all; it’s about what combination offers you the best value and manageability.

Q: How do we align Azure commits with NCE/MCA to avoid overpaying?
A: The best approach is to tie any Azure commitment to your actual usage patterns. First, analyze your current Azure consumption and growth trend. If you’ve been spending $100k a month and trending up 5% each month, don’t commit to $300k a month hoping for a big discount – that’s overcommitting. Instead, maybe commit to something like $120k a month (if you’re confident you’ll reach that in a year) and negotiate a discount on that basis, with the understanding that if you grow beyond, you’ll renegotiate a higher commitment later. Also, take advantage of Azure’s own cost-management tools: for instance, use Azure Reservations or Savings Plans to reduce cost without needing to commit through the MCA contract itself. Align your commit timeline with your business plans. If you foresee a major project scaling in 18 months, perhaps negotiate a ramp in commit (e.g., lower commit in year 1, higher in year 2). Under NCE/MCA, Microsoft will happily take a flat big commitment, but you want to avoid the scenario of paying for capacity you don’t use. And, as always, get in writing what happens if you don’t meet the commitment (some agreements impose a penalty or require a true-up payment – know the consequences and try to get leniency if possible).

Five Expert Recommendations

1. Treat NCE/MCA as entirely new frameworks – not just EA extensions. Don’t assume the processes or perks you had under an EA will carry over. Educate your team on the new rules and adjust your procurement and IT practices accordingly. Think of it as moving to a new vendor, even though it’s still Microsoft – read the fine print, relearn the system.
2. Benchmark EA vs. MCA vs. CSP costs thoroughly before deciding. Invest time in modeling your licensing costs under each scenario. This data is golden for both internal decision-making and for negotiations. If you find CSP could save money, you can use that as leverage with Microsoft (or you might actually choose CSP). If direct MCA ends up being the cheapest option for your profile, understand why that is. Making a blind choice could leave money on the table.
3. Protect against price uplifts with caps and clauses. When negotiating your new agreements, explicitly address the risk of price increases. For example, put language that caps annual price increases to a certain percentage, or ties them to an inflation index. Also consider asking for “price hold” periods on key products. Microsoft might not volunteer these, but if it’s the deciding factor for you, push for it. Any protection you get will help avoid nasty surprises, such as a mid-term 10% increase in costs.
4. Leverage your Azure and cloud growth strategically. Microsoft values future cloud revenue. If your organization is on a growth trajectory with Azure, Power Platform, or other services, use that to negotiate better terms now. For instance, “We plan to deploy Dynamics 365 to more divisions next year – in exchange, we need a discount on the additional licenses.” Basically, trade your roadmap (which equals more $$$ to Microsoft) for concessions that benefit you. This turns the negotiation into a win-win discussion rather than just haggling over the status quo.
5. Build a hybrid licensing model to maintain negotiating leverage. Don’t put all your eggs in one basket if you can help it. By diversifying – keeping some spend in CSP, some in MCA, maybe retaining some perpetual licensing – you always have an alternative path. This gives you leverage. If Microsoft knows you could shift workloads to a partner or vice versa, they’re more likely to stay competitive to retain that portion of business. A hybrid model also means if one channel changes pricing or policies unfavorably, you can pivot rather than being stuck. It’s about maintaining flexibility and choice, which ultimately strengthens your position as a customer.

By following these expert tips and the guidance above, enterprises can navigate the 2025 transition to Microsoft’s New Commerce Experience and Microsoft Customer Agreement with a lot more confidence.

The key is to stay informed, plan, and always advocate for terms that put your organization’s needs first – because Microsoft certainly is looking out for theirs.

With strategic preparation, you can turn this licensing shake-up into an opportunity to optimize costs and modernize your Microsoft relationship on your terms. Good luck with your negotiations!

Read about our Microsoft Negotiation Services

Do you want to know more about our Microsoft Services?

Please enable JavaScript in your browser to complete this form.

Name *

Email *

Company

Message *

Submit