Microsoft Kills Volume Discounts: Is Your Business Facing a Price Hike?

In most industries, enterprises purchasing in bulk are typically offered additional discounts. For example, a direct annual license for Product A might cost $100, but if a company buys 100 licenses at once, the total might only be $7,000—bringing the average price down to $70 per license.

Such a 30% discount is quite common in large-scale corporate procurement, while discounts of 60% or even 70% are often extended to the largest clients. In some cases, resellers or agents provide similar reductions by purchasing at full price and then issuing rebates, effectively reaching the same steep discounts.

However, Microsoft now intends to eliminate these volume-based enterprise discounts. The company’s stated rationale is to “enhance consistency and transparency while reducing complexity.” Yet, this move could force enterprises to bear higher costs, as many of these discounts may vanish entirely.

Previously, depending on the quantity purchased, enterprise customers automatically qualified for different discount tiers—Level A through Level D—ranging from 6% to 12%, with no negotiation required.

Under the new policy, these automatic discounts will be abolished. The change affects Microsoft 365, Windows 365, and a wide array of cloud services related to security, compliance, and identity management. Microsoft emphasized, however, that discounts for the U.S. government and education sectors will continue.

In its enterprise agreement update, Microsoft explained:

“This change reduces licensing complexity, enabling partners to invest less time evaluating Microsoft pricing and programs and more time working with customers on their business needs. With simplified and standardized prices, partners can shift their focus to delivering unique services that will propel their customers’ growth.”

According to the revised agreement, the new pricing structure will take effect on November 1, 2025. Any new purchases or renewals after this date will follow Microsoft’s updated pricing, while contracts signed or renewed before then will still honor the previously agreed rates.

Notably, Microsoft’s words and actions seem somewhat at odds. Mary Jo Foley, a renowned ZDNET editor who has long tracked Microsoft’s enterprise ecosystem, pointed out that within Azure, Microsoft has consistently encouraged small and mid-sized customers to work with Cloud Solution Providers, while reserving direct negotiations for its largest clients. In her view, the elimination of bulk discounts is Microsoft’s attempt to attract and secure its largest customers directly, thereby accelerating service revenue growth.

This suggests that massive enterprises may still negotiate favorable terms directly with Microsoft, while small and mid-sized businesses will likely be confined to standard pricing—even negotiations with authorized resellers may no longer yield significant savings.

Whether this will indeed be the case remains to be seen. What is clear is that Microsoft’s new policy is expected to impose additional burdens on many small and medium-sized enterprises. In the meantime, some of these businesses will likely push back or seek negotiations with Microsoft. If further developments arise, we will continue to provide updates.

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