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Microsoft Licensing Update November 2025: Evolution Across Microsoft’s Licensing, Pricing, and Product Structure
Author:
Jeroen Hidding
Jeroen entered Microsoft Licensing in 2008 at a Global LSP. Jeroen is specialized in optimizing complex Microsoft licensing requirements from a commercial perspective.
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Microsoft Licensing Update ... Microsoft Licensing Update November 2025: Evolution Across Microsoft’s Licensing, Pricing, and Product Structure
Author:
Jeroen Hidding
As we move into November, Microsoft has implemented several key licensing and pricing changes that will significantly impact how partners and customers engage with Microsoft Cloud and productivity offerings. From pricing alignment across Enterprise Agreements to major updates in Microsoft 365 packaging, the next few months bring important adjustments to prepare for.
Key Dates
- November 1, 2025
- Pricing consistency update for Microsoft Cloud subscriptions in EA and EA Subscription takes effect.
- Microsoft 365 and Office 365 suites with Teams are now available in General Availability (GA).
- New price adjustments have been introduced for suites with and without Teams.
- April 1, 2026
- Discontinuation of the free grace period for non-renewed Cloud Solution Provider (CSP) subscriptions.
- Introduction of the Extended Service Term (EST) option.
- August 1, 2026
- Microsoft Defender Threat Intelligence (MDTI) product retirement
- Completing transition to free access for Defender XDR and Sentinel customers.
- Ongoing promotions with varying end dates through December 2025 and April 2026 (details below).
Microsoft Productivity Offerings
Starting November 1, 2025, Microsoft reintroduces the Microsoft 365 and Office 365 Enterprise suites with Teams into General Availability. Customers will once again be able to purchase or transition to suites that include Teams, providing flexibility to meet individual collaboration and compliance needs.
To align with the European Commission settlement finalized on September 12, 2025, Microsoft is updating pricing and licensing structures to promote interoperability, open ecosystems, and customer choice. As part of this, Microsoft will:
- Decrease prices for Microsoft 365 and Office 365 suites without Teams.
- Increase prices for the Teams Enterprise standalone product.
For organizations operating under data sovereignty requirements, Microsoft continues to expand its Sovereign Private Cloud initiative. By combining Azure Local and the newly launched Microsoft 365 Local, this environment enables organizations to deploy Exchange Server, SharePoint Server, and Skype for Business entirely within their own sovereign infrastructure. The SE versions of these products will be supported until December 31, 2035.
Important Microsoft Promotions
Microsoft 365 Copilot
- 15% discount for new Copilot customers (minimum 10 licenses; max 2,400).
- End date: June 30, 2026 (extended).
Microsoft 365 E5
- 15% off for net-new E5 customers.
- End date: December 31, 2025.
Microsoft 365 E3 & E5 3-Year
- 10% discount for new-to-offer customers committing to three-year terms (minimum 100 licenses).
- End date: December 31, 2025.
Microsoft Defender Suite & Purview Suite
- 10% discount on three-year commitments (minimum 100 seats).
- End date: December 31, 2025.
Windows 365
- 20% discount for new Windows 365 customers (available monthly or annually).
- End date: April 30, 2026.
This extended offer is ideal for organizations exploring the power, flexibility, and security of Windows 365 Cloud PCs, helping them protect budgets against fluctuating costs and operational shifts.
Microsoft Offer: Extended Service Term (EST) for CSP Subscriptions
As of November 1, 2025, Microsoft has standardized Cloud Subscription pricing across Enterprise Agreement (EA) and EA Subscription customers. All Cloud subscriptions will now follow Level A pricing (the lowest discount tier).
However, on-premises and LSA (License + Software Assurance) products will maintain the existing multi-tier pricing waterfall (Levels A–D).
This move ensures global price consistency while preserving traditional discount structures for perpetual licensing.
Beginning April 1, 2026, Microsoft will discontinue the free grace period for non-renewed Cloud Solution Provider (CSP) subscriptions. Instead, customers and partners will have three post-expiration options:
- Renew to a new term.
- Cancel at end of term (services end immediately).
- Move to Extended Service Term (EST).
The Extended Service Term provides continued access to service at the standard monthly rate, with a 3% uplift, and is cancellable at any time with prorated billing.
Action points for partners:
- Review the conditions for automatic EST transitions (effective April 1, 2026).
- Prepare technical and billing systems for these updates.
- Discuss renewal or cancellation strategies with customers ahead of term end to prevent unexpected charges
Updates to Microsoft Product Terms
Microsoft Azure
- Added Azure AI search terms notifying customers of the use of First-Party Consumption services and the use of Web Knowledge Sources while using Grounding with Bing services.
- Added terms for open source models offered as Azure Direct Models in Azure AI Foundry.
- Added Microsoft 365 E3 as the prerequisite for Microsoft eDiscovery Graph API Standard.
Microsoft Dragon Copilot
- Enabled Dragon Copilot terms for the Microsoft Online Subscription Agreement (MOSA) Program to support Dragon Copilot trials.
Privacy & Security Terms
- Added a clause to the Exceptions to the DPA table for Microsoft Dragon Copilot to clarify that free trials follow the same 90-day retention and deletion terms as subscriptions.
Other Legal Terms
- Updated the notices to include settlement terms required by the EU for European Economic Area customers. The notice addresses the availability of Office 365 and Microsoft 365 Suites, including options with and without Microsoft Teams.
Glossary
- Added Covered Suites and (no Teams) Suites definitions.
More News About Dynamics F&O License Enforcement
We first introduced this topic in our October Licensing Update and explored it further in a dedicated blog post . Microsoft has now released additional details regarding the upcoming user licensing validation for Dynamics 365 Finance & Operations (F&O).
Scope of the Update
The initial rollout focuses on user license validation for Dynamics 365 F&O. In subsequent phases, device licensing, storage (F&O), and sandbox environments will also be subject to the same compliance checks.
New Process
- All Dynamics F&O user license subscriptions renewals with an anniversary later than January 15, 2026.
- Non-licensed users will receive an in-app notification 30 days before their upcoming renewal date.
- Starting with license renewal, the customer gets 15 days to assign the correct license to a user.
- After 15 days, users without the correct license will lose access to Dynamics F&O.
Ready to optimize your Dynamics 365 F&O? Contact our experts for assistance.