Microsoft is introducing major adjustments to its licensing model that will roll out on 1st November 2025. These changes affect both commercial and nonprofit organisations, so preparing now will help avoid unexpected costs or compliance challenges.
Read on to find out more about the changes taking place.
What’s Changing for Commercial Customers?
One of the most significant shifts is the phase-out of traditional rolling monthly licenses for Microsoft 365, Office 365 and Dynamics 365. Starting in November, all new purchases will need to go through Microsoft’s New Commerce Experience (NCE).
Existing legacy subscriptions will remain active until their renewal date, but organisations are strongly advised to plan their move to NCE early to prevent disruption.
With NCE, Microsoft introduces commitment-based subscriptions, offering monthly, annual or multi-year terms. While monthly billing will still be available, it carries a premium of roughly 20% more than annual commitments, making long-term planning essential.
Another key development is global price alignment. Microsoft will adjust regional pricing to better reflect exchange rates. For UK organisations, this could mean higher GBP prices for some Microsoft 365 and Azure services.
What’s Changing for Nonprofit Customers?
Nonprofits will also see significant updates to grants and discounts from 1st November. Previously, charities benefited from free allocations—such as 10 complimentary Microsoft 365 Business Premium licenses—but this grant structure is being retired.
The new system uses a tiered grant model:
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Smaller charities may still receive limited free licenses (e.g., up to 300 Business Standard licenses, though these lack advanced security and Intune features).
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Larger nonprofits will need to move to discounted paid subscriptions, for example, Business Premium at £4.20 per user/month or Microsoft 365 E3 for bigger environments.
Microsoft states these changes are aimed at ensuring sustainability and enhanced security, but the bottom line is that licence budgeting becomes far more important. Discounts will still be available—typically 60–75% off commercial pricing—but unlimited grants are no longer the norm.
Next Steps for Organisations:
Here’s what we recommend to stay ahead:
- Review your current subscriptions – Identify which plans are still on legacy CSP and schedule migration to NCE.
Evaluate commitment options – Decide if flexibility or cost savings is more critical.
Nonprofits: Reassess eligibility – Understand what grants or discounts apply to you now.
Plan for pricing changes – Account for currency adjustments and grant reductions in budgets. - As an accredited Microsoft partner, we can help you optimise your license strategy, minimise costs, and stay compliant.
As a Tier 1 Direct CEP, Academia’s Smartdesc division can protect you from certain price rises and manage your licenses for no cost. Contact us today to arrange a consultation on your Microsoft licence strategy to ensure it’s lean and fit for purpose ahead of these changes.
