Authored by Tory Cassie
Director of Nonprofit
Microsoft Licencing: What Changed in 2025 and What It Means for You?
Microsoft has continued evolving its licencing models to align with the needs of modern, cloud-first organisations, and 2025 has already brought some of the most significant changes in years. At mhance, we’ve been guiding customers through these updates, helping them transition smoothly and make informed decisions that support agility, compliance, and cost efficiency.
If you haven’t yet taken action on these changes, now is the time to catch up. Here’s what’s already happened and what your organisation should be doing about it.
Enterprise Agreements Replaced by MCA-E
As of January 2025, Microsoft officially began phasing out Enterprise Agreements (EAs) for most organisations, transitioning customers over to the Microsoft Customer Agreement for Enterprise (MCA-E).
This change was designed to simplify the purchasing process and give organisations greater flexibility and digital control over their Microsoft licencing. Under the traditional EA model, businesses were tied into three-year commitments with little room to adapt licencing volumes based on real-time needs. Managing those contracts was also largely manual and often cumbersome.
With MCA-E, the experience has changed significantly:
- Licencing can now scale up or down month to month, allowing for greater responsiveness to business changes.
- Organisations are no longer locked into multi-year terms, making forecasting and budget planning more agile.
- All agreements are managed digitally via the Microsoft portal, improving transparency and administrative efficiency.
We’ve already helped many customers successfully migrate to MCA-E and seen them benefit from clearer billing and reduced administrative overhead.
If you’re still operating under an EA or unsure how your current agreement aligns with Microsoft’s updated structure, our team can help assess your position and guide your next steps.
Power BI Premium P-SKUs Retired in Favour of Microsoft Fabric
Another major change already in effect is the retirement of Power BI Premium P-SKUs. These fixed-tier licences have been replaced with a more dynamic model built on Microsoft Fabric, the new unified analytics platform that integrates data engineering, data science, real-time analytics, and business intelligence.
Previously, organisations using Power BI Premium had to commit to fixed capacity tiers, often over-purchasing to avoid performance issues during spikes in usage. This led to unnecessary spend and underutilised resources.
Now, with Fabric-based licencing:
- Organisations benefit from granular, pay-as-you-go pricing, avoiding the need for large upfront commitments.
- Licencing can scale in real time, ensuring resources match demand.
- Power BI is more tightly integrated into the broader Azure and Microsoft Fabric ecosystem, streamlining data management and unlocking greater analytic power.
This transition offers improved cost control and significantly enhanced flexibility, especially valuable for businesses with fluctuating reporting and data workloads.
Pricing Changes Introduced in April 2025
In April 2025, Microsoft implemented a 5% price increase on monthly-billed subscriptions under annual agreements. This move aligns with Microsoft’s push toward predictable, long-term commitments, rewarding organisations that opt for upfront annual payments with more favourable rates.
If your organisation uses monthly billing, it’s worth reviewing whether a switch to annual prepayment could deliver substantial savings over the year.
Not Sure Where You Stand? mhance Can Help
These licencing updates are more than just administrative changes; they reflect Microsoft’s broader move toward a more responsive, consumption-based cloud ecosystem. For organisations, this means more choice, but also more responsibility in making strategic, well-informed decisions about their tech investments.
At mhance, we’ve helped customers across a range of sectors:
- Review and restructure their licencing post-EA
- Transition to Microsoft Fabric for modern BI workloads
- Reconfigure billing models for optimal savings
If you’ve yet to address these changes or want help optimising your current set-up, get in touch with our Microsoft licencing experts today.