Microsoft’s Cloud EA Changes in 2025:What You Need to Know & Next Steps

Tanya Seda
Mar 6
2 min read

Microsoft is making a significant shift in how it handles Enterprise Agreements (EAs) for cloud services. Starting January 1, 2025, Microsoft will stop renewing certain Cloud EAs in direct markets. While the exact definition of “Cloud EA” remains somewhat ambiguous, it appears to apply to agreements that include only Online Services and Azure, excluding on-premises licenses, special amendments, or negotiated discounts.

For businesses that rely on these agreements, this shift could mean major changes in pricing, licensing structure, and procurement strategy. Here’s what you need to know and the key next steps to prepare for these changes.

What’s Changing?

Microsoft is encouraging Level A customers to transition away from Cloud EAs and move towards:

Microsoft Customer Agreement for Enterprise (MCA-E)
Cloud Solution Provider (CSP) program

Unlike traditional Enterprise Agreements, MCA-E removes price bands, Software Assurance benefits, and renewal discounts. This means that customers could face higher pricing over time and a different contract structure that lacks some of the flexibility of EAs.

Next Steps: How to Prepare for 2025

With these changes on the horizon, organizations should take proactive steps now to ensure a smooth transition. Here’s what you should be doing:

1. Identify if Your Cloud EA is at Risk

Review your existing EA agreements to determine if they are cloud-only.
Check with your Microsoft representative or partner to clarify renewal eligibility.

2. Assess the Impact of Moving to MCA-E or CSP

MCA-E may bring pricing stability in some cases, but it lacks traditional EA benefits.
CSP could offer more flexibility and partner-managed services, but pricing structures may vary.
Compare total cost of ownership (TCO) across these models to determine the best fit.

3. Negotiate New Agreements Before Renewal Deadlines

If your organization is impacted, start negotiations early to explore pricing and benefits.
Consider bundling services or leveraging a Microsoft partner to gain better contract terms.

4. Evaluate Alternatives for Cost Optimization

Software Asset Management (SAM) tools can help track usage and optimize licensing.
Third-party audits may uncover hidden savings and ensure compliance.
Explore hybrid cloud strategies to offset potential cost increases.

5. Educate Stakeholders and Plan for Change

IT, procurement, and finance teams need to understand how this shift affects budgeting and planning.
Establish a migration roadmap to transition smoothly without service disruptions.

Final Thoughts

Microsoft’s decision to phase out certain Cloud EAs signals a broader shift in its cloud licensing strategy. While these changes may bring flexibility for some, they could also increase costs and eliminate key benefits for others. The key is to evaluate your options now and make informed decisions before your renewal date arrives.

By proactively assessing your licensing landscape and engaging with Microsoft partners or resellers, you can navigate this transition strategically and cost-effectively.