The Microsoft 5% price increase on annual plans billed monthly, which takes effect on April 1 2025, is prompting organisations to reconsider their approach to licensing management. This upcoming price change means higher expenses unless adjustments are made—either by switching to upfront annual billing or reviewing existing licenses for potential savings.
Microsoft licensing can take up a significant portion of an IT budget, yet many organisations don’t have full visibility or control over their license usage. Some licenses may no longer be necessary, while others might not be allocated in the most cost-effective way. Without regular review, these expenses can add up.
Rather than simply accept the price increase, IT teams can limit the financial of impact of Microsoft price increases by choosing to manage their own licensing. For example, Virtuelle Group’s self-service licensing portal provides tools that may help organisations track, adjust, and optimise their Microsoft licenses and Azure consumption, ensuring they only pay for what they need.
What’s Changing with Microsoft Licensing in 2025?
From April 1, 2025, Microsoft will implement a 5% price increase on monthly-billed annual plans. This update is part of an effort to standardise billing structures across Microsoft’s sales channels, including Buy Online, CSP (Cloud Solution Provider), and MCA-E (Microsoft Customer Agreement – Enterprise).
Products include Microsoft 365, Microsoft Office, Dynamics 365, Windows 365, Enterprise Mobility + Security and Power Platform.
What organisations need to know:
- Monthly-billed annual subscriptions will cost 5% more than annual upfront payments.
- Customers can avoid the increase by switching to upfront annual billing.
- The price adjustment applies to all segments, including commercial, academic, and NFP.
- Exchange rates and regional pricing policies may further influence final costs
This change means organisations will need to evaluate their options:
- Remain on monthly-billed annual plans and absorb the 5% increase.
- Move to upfront annual billing to avoid the increase, if cash flow allows.
- Review and optimise licensing usage to manage overall costs
For organisations that want to take a more proactive approach to Microsoft licensing, a self-service licensing platform may provide a way to streamline cost management. Virtuelle Group’s self-service portal is designed to offer IT teams greater control and visibility over Microsoft and Azure subscriptions, reducing reliance on third-party providers.
Gain Better Visibility Over Licenses and Usage
Without clear tracking, it can be difficult to know whether all Microsoft licenses are being fully utilised. A lack of visibility may lead to organisations paying for licenses that are no longer needed.
Virtuelle Group’s self-service portal provides:
- A centralised dashboard to view active, unused, and expired licenses.
- Usage reports that help IT teams identify underutilised subscriptions.
- Renewal tracking to prevent auto-renewals on unnecessary licenses.
By understanding where licensing costs are going, IT teams can make more informed decisions about how to allocate and manage Microsoft subscriptions.
Making Real-Time Adjustments to Reduce Waste
Without self-service tools, adjusting Microsoft licensing can involve inefficient processes and third-party delays. A self-service portal can enable organisations to:
- Add, remove, or reassign licenses instantly without waiting for external approvals.
- Adjust licenses based on actual workforce needs, avoiding over-licensing.
- Ensure that premium licenses are only assigned where necessary.
By regularly reviewing and optimising license allocations, organisations may avoid paying for unnecessary seats and keep licensing costs in line with usage.
Preparing for the Microsoft 365 Price Increase
Microsoft’s April 1 price increase on monthly-billed annual plans is fast approaching, and organisations have a choice: absorb the added cost, switch to upfront annual billing, or optimise their licensing strategy to minimise waste.
With the right strategy, the increase doesn’t have to mean higher costs. Taking action now can lead to a more efficient and cost-effective approach to Microsoft licensing today and in the long run.
Contact us today to learn how a Virtuelle Group self-service portal can simplify and reduce your Microsoft licensing costs.