Microsoft Licensing is Changing
Why CSP is the Smarter Path Forward
For decades, the way organizations purchased Microsoft software and cloud services was largely predictable. Enterprise Agreements (EAs) became the default model for companies with thousands of employees, offering volume-based discounts in exchange for a rigid three-year commitment. For many IT leaders, the EA was less about choice and more about inevitability: if you were a large enough business, you signed one.
But times have changed – and so has Microsoft’s licensing strategy. On November 1, 2025, Microsoft will officially retire the volume-based discounts (Levels B–D) for subscription products that made EAs attractive for larger customers. Online services like Microsoft 365, Dynamics 365, Power Platform, Windows 365, and Defender will move to a single, standardized price across all licensing programs.
What does that mean? Simply put, the advantages that once justified an EA are disappearing. In fact, most organizations will see renewal costs jump by 6–12% (or more) without any corresponding increase in value. Suddenly, the EA no longer looks like the safe or economical choice it once was.
The Evolution of Microsoft Licensing
To understand why this change matters, it helps to look back.
1990s – 2000s
Enterprise Agreements thrived because software was installed on-premises, upgrades were expensive, and discounts rewarded volume. Signing an EA made sense—it locked in predictable costs and ensured access to the latest versions.
2010s
As Microsoft shifted to the cloud, EAs began to include services like Office 365. For large enterprises, the built-in discounts made cloud adoption easier to swallow.
Today
Cloud adoption is nearly universal, and Microsoft no longer needs to incentivize it through EA discounts. The CSP model has matured, offering the same baseline pricing, more flexibility, and – through Tier-1 providers like Oakwood – more personalized value.
In other words, Microsoft is signaling that the EA era is ending. And the CSP era is here.
Why CSP Makes Sense – Even for the Largest Enterprises
One misconception we often hear is that CSP is better suited for small or mid-sized businesses, while EAs remain the gold standard for companies with 2,400+ seats. That was once true. It isn’t anymore.
CSP not only matches EA pricing but also adds flexibility and partner-led value that are especially important at enterprise scale:
- Flexible Terms: CSP allows monthly or annual commitments instead of being locked into a rigid three-year contract. For organizations with thousands of employees, this means aligning licenses more closely with real workforce changes.
- Cost Optimization: Through CSP, partners like Oakwood can identify unused or underutilized licenses, eliminate inactive seats, and bundle security and productivity tools to reduce spend.
- Direct Microsoft Relationship: As a Tier-1 CSP, Oakwood manages billing and support directly – no layers of distribution. That translates into faster escalation and clearer insight into Microsoft’s roadmap.
- End-to-End Value: Beyond licensing, CSP partners provide migration services, ongoing governance, and modernization strategies to ensure Microsoft investments deliver business outcomes.
For a 2,400-seat enterprise, the savings from eliminating wasteful licenses or rightsizing workloads can dwarf what EA discounts once provided. And when those efforts are coupled with the ability to flex licenses monthly, CSP becomes not just a replacement for the EA, but a better model altogether.
Making the Transition from EA to CSP
Of course, moving away from a long-standing procurement model can feel daunting. But transitioning to CSP doesn’t have to be disruptive. At Oakwood, we guide organizations through every step:
- Renewal Impact Assessment: Oakwood’s Microsoft Channel Manager can guide your organization to better understand exactly what the November 1 changes mean for your environment and budget.
- CSP Transition Planning: Together, we’ll build a roadmap to shift licensing from EA to CSP without service interruptions.
- Cost Optimization: We’re experts at ensuring licenses are right-sized and configured for your business.
- Ongoing Support: Our team of experts provide governance, escalation, and continuous advisory services long after the initial switch.
Why Oakwood?
Oakwood has been helping organizations modernize their technology for more than 40 years. As a Microsoft Solutions Partner with expertise spanning Azure Cloud & Infrastructure, Data & AI, Application Innovation, Security, and Managed Services, Oakwood understands both the technical and financial sides of Microsoft licensing.
And because Oakwood is a Tier-1 CSP provider, we deliver the flexibility of modern licensing backed by a direct Microsoft relationship. That means your organization benefits from priority escalation, roadmap insight, and a partner who can guide not just your licensing, but your entire Microsoft strategy.
The Bottom Line
Microsoft’s retirement of EA discounts on subscription products is more than a pricing change – it’s a turning point. For organizations of every size, including enterprises with thousands of seats, the CSP model is now the smarter, more flexible, and more cost-effective path forward.
EA renewals just got more expensive. CSP offers flexibility, cost control, and partner-led value. Contact Oakwood today to start planning your move before your next renewal date.
