Microsoft Volume Discounts Demystified: How to Maximize Price Levels

Why Volume Discounts Matter

Microsoft’s enterprise licensing deals have long offered built-in volume discounts as an incentive: the more you buy, the less you pay per unit. For CIOs, CFOs, and IT procurement teams, understanding these pricing tiers isn’t just academic – it directly impacts your IT budget.

Many enterprises misunderstand how Microsoft’s pricing levels work and assume any large purchase automatically yields the best price. Read our Microsoft Pricing Negotiation Strategy.

In reality, knowing how these discounts scale with volume (and how to leverage them) can unlock major savings or, if ignored, lead to paying far more than necessary.

However, it’s important to note that Microsoft is in the midst of changing this game. Historically, companies with larger license volumes qualified for lower price levels (Levels A through D).

But beginning in late 2025, Microsoft is removing automatic volume-based discounts for online services in Enterprise Agreements (more on that later).

This shift makes it even more crucial for buyers to strategize and not leave money on the table. Knowing the old rules – and the new realities – will help you maximize value despite Microsoft’s evolving pricing approach.

In short, volume discounts have mattered for decades because they determined your unit costs. Even as Microsoft moves toward a one-price model for cloud subscriptions, the principles behind those discounts remain key.

If you understand Microsoft’s tiered pricing structure and how to work it to your advantage, you can negotiate better deals and ensure you’re not overpaying for your Microsoft licenses.

Microsoft Pricing Levels (A–D) Explained

Let’s start by breaking down Microsoft’s traditional pricing levels in Enterprise Agreements (EA).

Under the classic model, Microsoft grouped customers into four volume tiers – Level A, B, C, and D – based on the quantity of licenses or “seats” purchased.

Think of these as preset discount brackets: higher tiers meant a bigger built-in discount off the standard price list.

• Level A – This is the entry tier. It’s typically where small to midsize organizations land when they don’t purchase in very large volumes. Level A customers pay essentially the standard list price or only get a minimal discount. In other words, if you’re a smaller enterprise (for example, under about 2,500 users), you’re in Level A and your pricing per license is the highest Microsoft charges in volume licensing.
• Level B – This tier is designed for mid-sized enterprises with a moderate volume. Roughly, companies in the few-thousand-seat range (e.g., around 2,500 up to 6,000 users) would qualify for Level B pricing. At Level B, you start to see some discount applied – a moderate percentage off compared to Level A. It’s not huge, but it’s meaningful savings across thousands of licenses. Microsoft essentially rewards you for buying more by giving a slightly lower unit price.
• Level C – This level is aimed at large enterprises (roughly 6,000 to 15,000 users in an EA). Here, the discounts become significant. Level C pricing might be noticeably lower than Level A – historically, perhaps on the order of high single-digit percentage savings off list price. If your organization is big enough to reach Level C, Microsoft recognizes the value of your business with steeper built-in discounts.
• Level D – This is the top standard tier, traditionally reserved for very large customers (approximately 15,000+ seats and above). Level D customers received the maximum standard volume discount Microsoft offered programmatically. In the past, that could be on the order of around 10–12% off the standard price (which is a substantial cut when you’re talking about thousands of licenses). Level D pricing has been the holy grail for many enterprises – if you hit this volume, you knew you were getting the lowest baseline price Microsoft would openly publish in an EA.

The exact seat thresholds for each level could vary by product or agreement type, and Microsoft hasn’t always publicized hard numbers. The examples above are a typical framework – the principle remains that more volume = lower unit cost.

If you were right below a threshold, you fell into the higher price level; cross that threshold, and your per-user cost for those licenses would drop across the board.

These tiered discounts have been a cornerstone of Microsoft’s licensing model for years. But (and this is a big “but”), as of November 2025, Microsoft is phasing out these automatic A–D price level discounts for online services like Microsoft 365 and Dynamics 365.

All customers, big or small, will pay the same Level A base price for those cloud subscriptions at renewal, unless they negotiate special terms.

On-premises software (like Windows or SQL Server) will continue with tiered pricing for now, but the trend is clear. Microsoft’s stated goal is “pricing consistency,” but the practical effect is that large enterprises may lose those built-in 6–12% discounts they used to enjoy.

So, understanding the old tier structure is not just academic – it’s a warning sign. If you’re a large customer used to Level B, C, or D pricing, you need to prepare for a world where that automatic discount is gone.

The silver lining is that knowledge is power: by knowing what Level you would have been (and what discount you used to get automatically), you can gauge how much more you’re being asked to pay and use that in negotiations.

And for those deals where tiered pricing still applies (like certain software or regional agreements), you can continue to leverage the structure as before.

Next, let’s look at how you can reach the next level – literally – to maximize savings under the old model (and how those strategies translate into the new model, where nothing is automatic).

Read about different negotiation strategies, Negotiating Multi-Year Microsoft Deals: Step Pricing and Ramp-Up Strategies.

Strategies to Reach the Next Tier

A key part of maximizing your Microsoft volume discount is strategic planning to hit the next pricing tier. If your organization’s license count is just below a tier threshold, a little foresight can pay off hugely in the form of lower unit prices.

Here are some proven strategies to reach that next level:

• Consolidate purchases across the organization. One common mistake is buying Microsoft licenses in fragmented chunks – different departments or regions each doing their own smaller deal. By centralizing and combining these purchases into one larger Enterprise Agreement, you may elevate your total seat count enough to jump from (for example) Level B to Level C pricing. For instance, if you have 3,000 users in Europe on one contract and 3,000 in North America on another, each contract alone might only qualify for Level B pricing. But combined (6,000 seats total), a single global contract could put you into Level C and secure a significantly better price for all 6,000 users. Central procurement and global EAs can unlock volume tiers that siloed deals can’t.
• Timing your additions to push into a higher tier. Sometimes adding a relatively modest number of extra licenses can unlock a much higher discount on all your licenses. Let’s say you have about 5,800 seats – that’s slightly under the typical Level C threshold (~6,000). If you anticipate growth or have some optional add-on products, it could be wise to add 200+ more seats to hit 6,000. By doing so, all 6,000 licenses would then qualify for Level C pricing, which might be, for example, 3% lower per unit than Level B. The cost of those extra 200 licenses could be more than offset by the savings applied to the other 5,800. In another example, an organization with 14,500 enterprise seats was just shy of Level D; by purchasing an additional 500 lower-cost licenses (such as a basic Office plan or a less expensive module), they crossed 15,000 and achieved Level D pricing – yielding a double-digit percentage reduction on the entire EA’s cost. The lesson is to analyze your volume: a small incremental spend in the right place can result in a large overall discount.
• Plan a unified renewal instead of staggered ones. If different parts of your business have agreements that end at different times, you might be missing a chance to bundle them. Microsoft’s volume calculation for price levels is generally done at the time of signing or renewal of an EA. If you can co-term and align your agreements so they renew together, you can combine the volumes at that point to push into a higher tier. This might involve a bit of short-term overlap or proration to synchronize dates, but the payoff can be a better pricing level for the next three-year term.
• Leverage all Microsoft products under one umbrella. Microsoft’s volume tier evaluation often looks at the aggregate count of certain product “pools” (like Office 365, Windows, EMS, etc., combined for an enterprise). Be aware that buying a product outside of your main EA (for example, picking up 1,000 Azure Active Directory Premium licenses on a separate CSP contract) means those 1,000 don’t count towards your EA’s volume discount tier. Whenever possible, bring additional product needs into your EA before it’s signed. By counting every possible seat towards that agreement’s total, you might reach the next tier. Even if a particular product could be bought standalone, consider putting it under the EA to help push you over a threshold.

In the new post-2025 landscape where Microsoft’s cloud price levels A-D are being flattened out, these strategies still matter, but in a different way.

Consolidation and volume are still powerful – not because they’ll automatically drop you into Level D (since standard Level D pricing may no longer exist for, say, Microsoft 365), but because volume and consolidation give you negotiating leverage.

Microsoft sales reps and licensing partners know a bigger deal is more valuable; even if the official price sheet doesn’t auto-discount for 15,000 seats anymore, you can bet Microsoft will fight harder to win or retain a 15,000-seat customer than a 1,500-seat customer.

By consolidating and maximizing your volume, you put yourself in a stronger position to request custom discounts or special pricing that mimics those old tiers.

In summary, always be strategic with your purchase scope and timing. If you’re near the finish line of a higher discount level, find a way to cross it. The effort spent on internal coordination or a slightly increased quantity can be well worth the long-term savings.

This was true under the formal tier system, and it remains true in the new model, where you must create your own discount advantage since Microsoft won’t automatically do it for you.

Read what more you can ask from Microsoft, Beyond Price: Leveraging Credits and Freebies in Microsoft Negotiations.

EA vs. CSP: How Volume Discounting Differs

Not all Microsoft licensing programs treat volume the same way.

It’s crucial to understand the difference between an Enterprise Agreement (EA) and a Cloud Solution Provider (CSP) arrangement when it comes to pricing and discounts.

In a Microsoft Enterprise Agreement, pricing has traditionally been governed by the formal volume tier structure (Levels A–D) we discussed.

Under an EA, once your organization’s size is assessed at signing, you get a fixed price level for the term (usually three years). If you had 10,000 seats, you might be Level C – and all your user licenses under that EA would be billed at the Level C rate.

The discount was baked in, upfront. During the term, you typically pay the same unit price for additional true-up licenses as well, based on that initial level. The EA model is very structured: it’s an agreement directly with Microsoft (often facilitated by a licensing reseller/LSP), with pricing that until now followed Microsoft’s published volume discount tiers.

As a buyer, your negotiation in EA often focused on additional discounts on top of those standard levels, since your seat count somewhat predetermined the base level.

In contrast, CSP (Cloud Solution Provider) is a different beast. CSP is a program where you buy Microsoft subscriptions through a third-party provider (a reseller or partner) rather than directly via Microsoft’s volume licensing.

There are no formal pricing tiers in CSP. Microsoft provides a wholesale price list to CSP resellers (which is essentially the “Level A” price by default), and the reseller can offer you whatever retail price they want.

Think of CSP pricing as more of a market-driven or negotiation-driven model: one partner might offer a 5% discount off Microsoft’s MSRP to win your business, another might stick to full list price but throw in some free services, and a third might have a rebate program.

Microsoft’s program does not guarantee the discounts in CSP – they come out of the partner’s margin or special incentives.

So, a 15,000-seat customer and a 150-seat customer both see the same MSRP in CSP; any difference in what they pay will be because the partner gave the larger customer a break (perhaps due to scale or competition).

Key differences to remember:

• Volume leverage in EA is formal. (At least it was until the recent change.) If you had enough volume, Microsoft’s EA price list automatically gave you a better rate (Levels B, C, D). In CSP, volume leverage is informal – you have to ask for a better deal, and the partner might grant it if you’re a big fish or if you negotiate well.
• Negotiation focus: In EA, you negotiate with Microsoft (via their rep or a licensing solution partner) largely about discounts beyond the standard tier and about contract terms. In CSP, you negotiate with the reseller on the overall price; the reseller, in turn, might negotiate with Microsoft for better backend incentives if you’re a huge deal, but that’s behind the scenes. The CSP model often allows monthly or annual subscriptions (more flexibility, no 3-year lock). In contrast, EA is a 3-year commitment – this can affect how discounts are given (CSP might be smaller discounts but more flexibility, EA historically gave bigger upfront discounts in exchange for commitment).
• Post-2025 pricing changes: With Microsoft eliminating automatic tier discounts for online services in EA, the EA and CSP models are becoming a bit more alike in one sense – neither will hand you a volume discount on a silver platter just for being big. Under the new rules, an EA customer with 20,000 seats might technically have the same starting price as one with 2,000 seats (since Microsoft wants to align to a single price list). This means EA customers now must negotiate for discounts much like CSP customers always have. The major difference remaining is how you get those discounts: EA customers will need to push Microsoft for special, discretionary discounts (since the standard programmatic ones are gone), whereas CSP customers will need to push their reseller (or shop around multiple resellers) for a better deal.
• Which is better? It depends on your situation. EAs still offer advantages like predictable pricing for three years, the ability to true-up/down annually, and, in some cases, added benefits (funding programs, support). CSP offers agility – you can adjust quantities month-to-month, and you’re not tied into a huge contract if your needs shrink. Without the guaranteed volume discounts in EA, some enterprises may reconsider if an EA is worth it or if a CSP agreement (or the newer Microsoft Customer Agreement model) could yield similar pricing with more flexibility. Buyers must understand their model to avoid leaving money on the table: if you remain on an EA, ensure you negotiate your own discount since Microsoft won’t auto-apply one; if you’re on CSP, treat it like any procurement – get quotes from multiple providers and play them against each other to secure a discount.

In summary, under an EA, you traditionally had structured price levels, and under CSP, you had to negotiate for any discount.

Now, with Microsoft’s changes, EA customers are essentially in the same boat as CSP customers for online services – everyone has to negotiate and justify a discount.

The savviest organizations will utilize whichever model plays to their advantage (for example, leveraging CSP’s flexibility to optimize license counts or using EA’s commitment as leverage to demand a custom discount from Microsoft).

Beyond Level D: Securing Custom Discounts

Hitting Level D pricing was never the ceiling for savvy negotiators – it was just the highest standard tier.

The truly significant discounts often came beyond Level D, through custom negotiations and special agreements with Microsoft.

In other words, Microsoft has always had leeway to grant discounts deeper than the published A–D levels, especially for strategic deals. As a customer, you should never assume the posted Level D price is the best you can do.

How do these custom discounts work? Typically, when a deal is large enough or there’s competitive pressure, Microsoft’s sales teams can escalate the pricing approval to something called the “deal desk” or seek executive approval for extra discounts.

These are discretionary discounts that aren’t guaranteed by any program, but Microsoft may offer them to win or retain your business. For example, suppose you’re considering moving 20,000 users to Google Workspace.

In that case, Microsoft might counter with a special 20% off offer on Microsoft 365 to sway your decision – even though standard Level D might only be ~12% off. Or if your CIO has a strong relationship with Microsoft’s leadership, you might get a unique pricing concession as part of a broader partnership.

The key triggers for such extra discounts are usually one or more of: a) Competitive threat (real or perceived alternatives like AWS, Google, Salesforce, etc.), b) Large deal size (a multi-million dollar contract can get special treatment), and c) Strategic value (for example, you agreeing to be a reference customer, or adopting a new Microsoft product like Teams Phone or Power Platform that they are keen to promote).

The buyer’s mindset should be: “Great, we’ve qualified for Level D… now how do we get even more?” Do not stop negotiating at the point where Microsoft says, “You’re at our best standard price.”

Always test the waters for the better.

A good tactic is to come prepared with benchmarking data or case studies from peers. If you know of a similar organization that received, say, a 20% discount on the Office 365 list price, bring that up (without revealing confidential information).

Microsoft won’t automatically volunteer a concession, but if you signal that you’re aware of what’s achievable in the market, they’re more likely to improve their offer to close the deal.

Now, with the automatic volume tiers being eliminated for online services, custom discounts become even more critical.

In the new model, every discount beyond the flat list price is effectively a “custom” discount. There is no built-in 12% off for being big – you have to ask for it (and justify it). The good news is that Microsoft is not going to refuse all discounts; they still need to satisfy customers and beat the competition.

But you might need to be creative and persistent. Instead of saying “We qualify for Level D, give us that pricing,” you now might say “We need a 15% discount to sign this renewal, otherwise we’re looking at other options.” It puts more onus on you to initiate that request.

Think of it this way: Before, the volume tiers were like a ladder Microsoft put out – you climb to the top (Level D), and that’s where the ladder ended unless you could fly. Now the ladder’s gone, but you can still build your own by negotiating.

Always push to see how high (or low, in price) Microsoft will go. Ask for multi-layered discounts: for example, you might negotiate a special discount if you purchase a new product bundle, or a conditional discount if you hit certain adoption targets.

Microsoft has deal incentive programs and flexibility behind the scenes, especially for customers who are making big strategic commitments (like moving infrastructure to Azure or adopting the full Microsoft 365 E5 security suite).

The bottom line: Don’t settle for the sticker price. Whether the sticker is labeled “Level D” or just the universal list price, there’s often more discount to be had if you make a strong business case.

Use your size, your willingness to buy more or adopt new services, and any competitive alternatives as bargaining chips.

Microsoft’s sales reps are measured on revenue and keeping you in the ecosystem – if granting an extra 5-10% off secures a multi-year, multimillion-dollar deal, they often have ways to make it happen. You just have to ask, and ask the right way.

Pitfalls to Avoid

While pursuing better Microsoft pricing, organizations can fall into several common pitfalls. Being aware of these mistakes can save you from leaving money on the table or stumbling into a disadvantageous agreement.

Here are the key pitfalls to avoid when chasing volume discounts and negotiating Microsoft deals:

• Assuming you’re automatically in the right tier. Don’t just take Microsoft’s word (or a cursory glance at your license count) for it that you’re getting the best level. Sometimes an enterprise grows significantly during an EA term, but Microsoft continues to charge the original level pricing until renewal. If you’ve added thousands of users, you might deserve a tier upgrade mid-stream or at least at the next anniversary. Always validate your tier status with your Microsoft rep or licensing partner, especially at renewal time. If your employee count or usage has increased, ensure that your new agreement reflects the appropriate pricing level. Microsoft won’t rush to lower your prices for you – you must flag it and insist on the adjustment. Under the new pricing regime, this translates to ensuring any custom pricing you deserve (due to increased scale) is explicitly negotiated, since there’s no automatic trigger.
• Fragmented buying dilutes your volume leverage. One big pitfall is purchasing Microsoft products in silos. For instance, Company X might have an EA for Office 365, but they buy Azure separately through a CSP, and perhaps Dynamics 365 through another channel. By doing this, each purchase may be evaluated at a lower volume, potentially missing out on a higher tier. Avoid spreading purchases across multiple smaller contracts unless there’s a very good reason. Consolidation is king for volume leverage. If you keep software purchases unified, you maximize the apparent size of the deal, which historically meant a higher discount tier and today means more negotiating power. Similarly, don’t let different subsidiaries or departments negotiate in isolation if you can help it – Microsoft often views you as one customer, and you should too. The more you bundle together, the more compelling your case for a discount.
• Buying add-on licenses separately outside your main agreement. This is a related mistake: let’s say you have an EA for core products (like Windows, Office), but when you needed an additional product (say, Power BI or extra security add-ons), you signed a separate, smaller agreement or made a one-off purchase. That separate purchase likely didn’t enjoy the same high-volume pricing as your main EA. It’s usually better to amend or include new purchases in your primary agreement where possible, so they benefit from the largest volume count. Keeping everything under one roof ensures you hit the largest tier you can, rather than being treated as multiple smaller customers.
• Assuming “CSP = no discount.” Many customers think that if they go through a Cloud Solution Provider, they’re stuck paying list price. In reality, CSP pricing is negotiable – just indirectly. The CSP reseller sets your price, and you can absolutely ask for a better deal or extra value. The competition among Microsoft partners can work in your favor: you can solicit quotes from multiple CSPs. For example, one CSP might offer you a 5% discount off Microsoft’s base price for committing to a yearly term, or another might bundle in free migration services equivalent to a few percent of the contract value. If you just go with the first quote and assume no one can do better, you’re likely paying too much. Treat CSP procurement with the same rigor as any vendor sourcing – push for a discount or added value, and if a partner claims they “can’t,” try a different partner. Often, partners have some margin they can cut or vendor incentives they can pass along if they really want your business.
• Not documenting negotiated discounts in the contract. This is a pitfall that can bite you later. Let’s say during talks, Microsoft’s rep verbally agrees to give you a 5% extra discount beyond the standard pricing, or a special one-time credit. If this is not clearly written into your Enterprise Agreement (in the pricing exhibit or an amendment) or your CSP contract, you might find later that you’re not actually receiving it. Always ensure that any discount, price protection, or special term you negotiate is captured in the official paperwork. Do not rely on emails or verbal assurances. If it’s not in the contract or the final quote, it effectively doesn’t exist. This includes ensuring that your customer price sheet accurately reflects the correct price level or discounted unit prices, and that any future-year caps on price increases are clearly noted. Microsoft has many customers and a long memory, only for what’s signed – not for what was discussed on a call. Protect yourself by getting it in writing.
• Overbuying just for the discount’s sake. We’ve mentioned adding licenses to hit a tier, but be careful: don’t purchase far more than you need or commit to shelfware just to achieve a discount. It’s a balancing act. If those extra licenses truly won’t be used, the cost could outweigh the discount benefits. Microsoft salespeople might encourage you to go bigger (“If you only add X more, you’ll save Y%!”). Run the numbers yourself. Ensure that any volume-based purchase is still aligned with actual or reasonably forecasted needs. In the new era without automatic tiers, this is more about not signing up for unnecessary products just because of a promised deal – always make sure the economics net out in your favor.

By sidestepping these pitfalls, you maintain the upper hand in negotiations and maximize your savings. In essence, be proactive and detail-oriented: double-check Microsoft’s tier placement, unify your buying strategy, negotiate in every channel, and lock in everything you negotiate. Microsoft is a sophisticated vendor – to beat them at the licensing game, you need to be equally strategic and vigilant.

Table: Microsoft Volume Discount Leverage Points

Below is a quick reference table summarizing the typical leverage at each volume level and providing guidance on how to maximize it. (Note: These were the traditional tiers under the EA model.

As of 2025, Microsoft has unified cloud pricing, but these categories remain useful for framing your negotiation strategy and understanding where you stand.)

Note: As of November 2025, Microsoft’s standard pricing for online services no longer automatically scales down for Levels B–D – effectively, everyone starts at Level A pricing.

However, the leverage points above still hold: larger organizations can and should negotiate better-than-list pricing (even if it’s not called “Level D” anymore). Use your size to extract the best custom deal possible.

Negotiation Playbook

Negotiating a Microsoft enterprise agreement or large CSP deal can feel like navigating a maze.

Here’s a step-by-step playbook to ensure you’re maximizing your leverage and not missing any opportunities for discounts:

1. Validate your current pricing level (or status). Begin by confirming where you stand. If you’re in an active EA, find out what official price level you’re at (A, B, C, or D) – it should be listed on your contract’s pricing sheet. If the new rules apply and tiers are no longer automatic, determine what your effective price level would have been under the old system based on your seat count. This gives you a baseline. You need to know if you’re being treated as a Level A small fish or a Level D whale, and whether that’s accurate. Many companies discover they should qualify for a better tier than they have – don’t let that happen to you. Double-check with your Microsoft account manager and insist on correction if needed, especially at renewal.
2. Consolidate contracts before negotiations. Audit all the Microsoft agreements and subscriptions across your organization. Are there separate contracts that could be combined? Perhaps multiple EAs in different regions, or a mix of EA and CSP purchases? Before you go to the table, try to consolidate these or at least negotiate them as a package. Microsoft will look at the total opportunity. By presenting a unified front – “we’re renewing everything together” or “we’re moving these CSP licenses into our EA” – you increase your volume and your importance to Microsoft. This sets the stage for qualifying for the best pricing level or requesting deeper discounts due to the larger deal size.
3. Ask for the best level pricing (Level D or better), even if you think you’re not eligible. This is classic negotiation 101: if you want something, you have to ask. Don’t be shy about requesting Level D pricing (historically the lowest standard price) for your EA, even if your seat count is slightly below the typical threshold. Microsoft sometimes approves “level exceptions” to win deals – for example, granting Level C pricing to a customer that technically had Level B volume, as a sales concession. In the new scenario, this means requesting an aggressive discount upfront. You can frame it like, “We know we’re a bit smaller than your usual Level D customer, but we expect Level D (or equivalent) pricing to consider this renewal.” The worst they can say is no – but often, if you’re close or if they want your business badly, they’ll come back with something better than you’d get by staying quiet.
4. Benchmark and use peer comparisons. Arm yourself with data. Before and during negotiations, gather information on what discounts or deals similar companies have received. This could come from industry contacts, consultants, or licensing advisory firms. For instance, know that “enterprises of our size often get 15-20% off the cloud services list price in today’s market.” While Microsoft won’t confirm other deals, letting them know you have a benchmark puts pressure on them to not give you a worse deal. You can also use Microsoft’s own pricing history as a benchmark: “We realize the volume tiers are gone, but under the old model we would’ve been Level C with ~8% off – and we expect at least that, if not more, given market conditions.” Basically, show them you’re an informed buyer. If they propose a price that you know is above market, call it out and push back. A well-prepared customer can negotiate from a position of strength rather than accepting whatever is first offered.
5. Document everything in the agreement. As the negotiation concludes, make sure all the outcomes are captured in writing. If you achieved a special discount, ensure the final quote or contract clearly shows the discounted unit prices or an added discount percentage. If you negotiated price holds or caps on increases for future years, those go in writing, too. If Microsoft promised you some free licenses or funding or flexible terms, yes – get that in the contract. It’s easier to get things in writing before you sign than to enforce a vague promise later. Also, explicitly check that the agreement’s Customer Price Sheet reflects the correct price level (if levels still apply) or the exact net prices you agreed to. Triple-check calculations of any “blend” of services to ensure the discount was applied correctly. By the time you and Microsoft ink the deal, there should be no discrepancies between what was negotiated and what the paperwork states.

Follow this playbook, and you’ll walk into your Microsoft negotiations with confidence and leave with the best deal attainable.

Remember, preparation and proactivity are your allies. Microsoft’s sales process is sophisticated – but a buyer with a clear strategy can more than hold their own.

FAQs

Q: Is Level D the maximum discount Microsoft offers?
A: No, Level D is only the highest standard tier, but it’s not the absolute maximum discount possible. Historically, Level D provided the top baseline discount (for example, around 10-12% off list price for very large enterprises). However, Microsoft can and does offer deeper discounts beyond Level D on a case-by-case basis. These extra discounts are discretionary – often granted for competitive reasons or large strategic deals. In practice, if you’re a huge customer or have a strong negotiating position, you can push past the default Level D pricing. Especially now, since the standard tiers for cloud services are being retired, any discount you get will be through negotiation. Think of Level D as a starting target for big customers, not the finish line. Always ask yourself (and Microsoft) if there’s room to do better than Level D in your particular deal.

Q: Can CSP customers achieve discounts like EA customers?
A: Yes, CSP customers can get discounts, but the mechanism is different. In a CSP model, Microsoft isn’t directly giving you a volume-based discount – instead, the CSP provider (reseller) is your point of negotiation. While there’s no official “Level A/B/C/D” in CSP, a large CSP deal can absolutely be discounted. The partner might reduce your price per seat to win your business, essentially giving you a de facto volume discount. For instance, if you’re buying 5,000 Microsoft 365 licenses through CSP, you could solicit bids from multiple providers and find one willing to offer, say, 8% off the MSRP. The partner can afford to do this by using their reseller margin or Microsoft incentive funds. Additionally, CSP often allows more flexibility (monthly billing, etc.), so you might save money by only paying for what you use instead of committing to unused licenses. The key is to treat CSP contracts with the same negotiation mindset as an EA: shop around and don’t accept the first price. With the recent changes, the gap between EA and CSP pricing has narrowed for big customers – so if a CSP can give you a better deal and needed flexibility, it’s worth considering.

Q: Should I consolidate all subsidiaries under one agreement?
A: In general, consolidating agreements yields better volume leverage, but there are a few considerations. Combining all your subsidiaries or business units into one master Enterprise Agreement can dramatically increase your seat count, potentially qualifying you for the highest pricing tier (formerly Level D) or at least giving Microsoft a larger piece of business to compete for. This typically results in better pricing than if each division negotiates on its own. It also simplifies management – with one renewal date and one set of terms, for example. That said, there are scenarios where separate agreements might make sense: for example, if one subsidiary is in a different country with specific regulatory needs or if it’s being divested soon (you might not want to entangle its licenses). Additionally, some companies prefer separate agreements for clearer internal cost allocation. But from a pure pricing perspective, unified agreements are stronger. If you can legally and operationally do it, rolling up all seats under one umbrella will maximize your discount potential. At a minimum, even if contracts stay separate on paper, negotiate them together. Tell Microsoft you’re evaluating the total spend. They’ll often give a combined discount deal if they know the whole pie is on the table at once.

Q: How often does Microsoft review volume tiers or adjust pricing levels?
A: Under the old system, Microsoft determined your volume pricing level at the start of each Enterprise Agreement (at signing or renewal). That level stayed fixed for the EA’s duration (usually 3 years). They didn’t typically adjust your tier mid-term, even if you added a lot of users – your level was locked until the next renewal, unless you did some special restructuring. So essentially, the review was at each renewal when you’d go from EA to EA. If your organization grew substantially, you’d be re-leveled then (and you’d negotiate new pricing accordingly). In between, any added licenses (true-ups) were charged at the same level you started with. Now, with the November 2025 change, Microsoft is doing away with those formal reviews for online services because everyone’s base price is the same regardless of volume. Instead of a tier review, it becomes a straight price renewal – unless you actively negotiate. Microsoft will, of course, review your account’s total spend and growth internally all the time (they know if you grew from 5,000 to 10,000 users). But they won’t voluntarily lower your price due to that growth; they’ll just be aware of it when you come to the table. So, the onus is on you at renewal to bring up any needed price adjustments. For on-premises licenses and other legacy setups where tiers still exist, those will continue to be reviewed at contract renewal points as before. Always keep an eye on your headcount and ensure that when the time comes, Microsoft is using the latest (and highest) user count to determine any pricing tier or to justify a discount.

Five Expert Recommendations

To wrap up, here are five expert tips to remember when dealing with Microsoft volume pricing and discounts:

1. Never assume you’re automatically placed in the correct tier. Always verify and challenge if necessary. Microsoft might not proactively bump you up to a better pricing level – you must advocate for yourself.
2. Always consolidate agreements where possible. The more unified your purchasing, the greater your volume leverage. A single large agreement beats several smaller ones when it comes to getting discounts.
3. Push past Level D for discretionary discounts. Treat Microsoft’s highest standard discount as merely a starting point. Use leverage and benchmarks to negotiate even better pricing whenever you can.
4. In CSP, treat partners like negotiators – create competition among them. Don’t settle for list price in the Cloud Solution Provider program. Get quotes from multiple providers and make them work for your business with discounts or value-adds.
5. Confirm negotiated discounts are reflected in the contract, not just discussed. Verbal promises and friendly emails mean nothing once the deal is signed. Make sure every concession – price, terms, or otherwise – is written into the agreement to protect your savings.

By following these recommendations, you’ll approach Microsoft licensing with a buyer-first mindset, remain vigilant against vendor tactics, and secure the best possible outcome for your organization.

Microsoft may be demystifying their pricing by flattening tiers, but with the right strategy, you can demystify the art of negotiation – and come out on top.

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