Lock In Before April 1: An MSP's Guide to Microsoft's 2025 Price Changes
TL;DR
- Starting April 1, 2025, annual commit NCE plans paid monthly carry a 5 percent price increase at renewal; prepaid annual avoids it entirely.
- Teams Phone Standard rises from $8 to $10 per user per month, and Teams Phone with Calling Plan from $15 to $17, for standalone subscriptions.
- Microsoft 365 Copilot gained an annual-commit, paid-monthly billing option in December 2024, priced 5 percent above the prepaid annual rate.
- Paid Copilot now includes SharePoint Advanced Management, previously a $3 add-on, which matters for governing data exposure before enabling AI.
- A 15 percent Business Premium promo for net new subscribers, stacked against the April increase, works out to roughly 20 percent net savings.
Microsoft's early-2025 licensing announcements read like a mixed bag: some prices climb, one currency drops, and Copilot finally gets billing flexibility. For MSPs the real story is timing. Several of these changes reward customers who act before April 1, 2025, and punish the ones who renew on autopilot. Here is each change, what it costs, and the strategy that goes with it.
What gets more expensive
Annual commit, paid monthly: +5% at renewal
If you are on an annual commit NCE (New Commerce Experience) plan paid monthly, Microsoft is introducing a 5 percent price increase upon renewal.
The details that matter:
- Effective date: renewals on or after April 1, 2025 see the 5 percent bump.
- Prepaid annual escape hatch: switching to fully prepaid annual avoids the increase altogether.
- Renewal timing: a renewal date before April 1 defers the hike a full cycle. A March 2025 renewal sees no jump until March 2026.
Two strategies follow directly:
- Prepaid annual locks in current pricing if the customer can absorb the upfront payment.
- A multi-year commit (3-year) may protect against future increases as well.
Teams Phone standalone plans
If clients rely on Microsoft Teams Phone for VoIP and calling, the standalone plans are going up:
- Phone Standard: $8 to $10 per user per month
- Teams Phone with Calling Plan: $15 to $17 per user per month
These increases hit standalone Teams Phone subscriptions. Customers on Office 365 E5 or Microsoft 365 E5, which already include phone capabilities, see no change. Current rates are on Microsoft's Teams Phone pricing page (opens in new tab).
Brazil: +12% on currency adjustment
Brazil (BRL) sees a 12 percent price increase from currency adjustments, a significant line item for cost planning in that region.
What gets cheaper: the UK
Microsoft's FX-related adjustments could reduce pricing by around 5 to 6 percent for UK (GBP) customers. The catch: if those customers are also on annual NCE paid monthly, the reduction roughly cancels out the 5 percent increase above.
Reference: December 2024 Partner Center announcements, local currency price adjustments (opens in new tab)
What gets more flexible: Copilot billing
Copilot launched with only an annual prepaid option, which deterred plenty of would-be adopters. As of December 2024, annual plans paid monthly are available, priced 5 percent above the prepaid annual rate. For customers who want to test the waters without a year of cash upfront, that is the option that was missing.
Microsoft is also introducing a free version of Copilot Chat in Microsoft 365 subscriptions, with a pay-as-you-go consumption model for certain queries (SharePoint-based questions, for example).
Reference: Copilot for all: Introducing Microsoft 365 Copilot Chat (opens in new tab)
The differentiator worth quoting to clients: paid Copilot includes SharePoint Advanced Management, previously a $3 add-on. That tooling governs and secures data, which is exactly what you want in place before enabling AI features that might expose too much information to end users. Free Copilot Chat covers basic AI tasks but can rack up consumption charges per query.
The promos worth stacking
- Copilot licenses, 15 percent off. Requires a 10-seat minimum; annual commitments only (paid monthly or prepaid).
- Business Premium, 15 percent off for net new subscribers. Acting before April also dodges the 5 percent uptick, making it roughly a 20 percent net discount. The classic use case: upgrading clients from Business Standard to Business Premium to unlock the advanced security features.
- Office 365 E3/E5 promotions. Aimed at organizations that have outgrown Business Premium's 300-seat limit or need advanced security. These run until June 2025, though SMBs typically adopt E3/E5 only with specific enterprise requirements.
The full details are in Microsoft's Global Promo Readiness Guide (PDF) (opens in new tab).
The play before April 1, 2025
Audit which clients sit on annual-paid-monthly NCE plans, model the prepaid switch for the ones with cash flow to support it, and time renewals that can move early. Pair the Business Premium promo with a security upsell conversation, since the 15 percent discount plus avoided increase makes the upgrade math easier than it will be all year.
Frequently asked questions
If a renewal lands before April 1, 2025, when does the 5 percent increase apply?
Not until the following cycle. A March 2025 renewal keeps current pricing until March 2026, which makes early renewal timing a legitimate cost lever.
Who is affected by the Teams Phone increases?
Primarily organizations on standalone Teams Phone subscriptions. Customers on higher-tier suites like Office 365 E5 or Microsoft 365 E5, which already include phone capabilities, see no new price change.
What is the difference between free Copilot Chat and paid Copilot?
Free Copilot Chat handles basic AI-driven tasks but can incur pay-as-you-go consumption charges for certain queries, such as SharePoint-based questions. Paid Copilot includes SharePoint Advanced Management for governing and securing data, critical when enabling AI features that might expose too much information to end users.
Margins are won in the renewal conversation
Licensing changes land better when they arrive with proof of value. CloudCapsule gives you a security posture report for every tenant, 250+ controls in 60 seconds, so the renewal email leads with evidence instead of a price bump.
See pricing
Written by
Nick Ross
CEO · Microsoft MVP · Founder, T-Minus 365
Nick is not just a CEO, he's a respected thought leader and influencer in the MSP space. Tens of thousands of MSPs learn through his YouTube channel, T-Minus365. Nick has been honored as a three-time Microsoft MVP for his educational content; his expertise and influence are the backbone of our mission, ensuring that you are in the best hands when it comes to security.
Nick joined Pax8 in 2017, where he would ultimately oversee product management for PSA and Microsoft integrations. Following his tenure at Pax8, Nick has continued to demonstrate his leadership prowess as an executive at various MSPs, culminating in his most recent role at Sourcepass.
Nick holds a Bachelor's Degree in Business Management from Florida State University, as well as a Minor Degree in Entrepreneurship. In his free time, Nick is an avid hiker, reader, and fitness-junkie.
