Microsoft's 2026 Enterprise Agreement Licensing Updates

What organisations need to know about Microsoft EA licensing heading into 2026

Ask most IT people what they think of licensing, and you’ll get the universal response: a sigh, a forced smile and a quiet hope that nothing has changed since the last time. For years, that wasn’t a bad assumption. Microsoft licensing traditionally has followed a familiar rhythm, Enterprise Agreements (EA) renewed every three years, annual reviews came and went, and changes landed in slower cycles.

The last 18 months have changed that, Microsoft has been steadily reshaping how enterprise licensing works. Discount structures are changing. Eligibility is tightening. New agreements are being positioned as the default. At the same time, partners are talking more openly about Cloud Solution Provider (CSP) models and Microsoft are talking about another new acronym, MCA-E, and it’s leaving many organisations unsure about what is driving the shift and what it means for them. That uncertainty often leads to the question of whether action is needed or if the changes can wait until renewal.

At Inde, our role is not to push a preferred option. It is to help you understand what has changed, how it affects your organisation commercially and operationally, and how to choose the path that genuinely fits the way you work.

Why this conversation is happening now

Historically, the Enterprise Agreement (EA) was the default licensing model for larger organisations, offering three-year price protection, volume-based discounts, and a structure that supported long-term planning. That landscape is shifting. Microsoft has removed discount tiers for online services, and pricing is now sitting much closer to standard list rates. At the same time, Microsoft is tightening access to EA particularly for organisations under roughly 2,400 seats and steering customers toward alternative agreement types.

These changes mean some organisations are seeing less commercial flexibility and higher renewal costs than expected. Reviewing options ahead of renewal gives you greater clarity, stronger leverage, and the opportunity to choose agreements that aligns with how your organisation operates.

Understanding the main licensing options

If you are trying to understand what may be changing in Microsoft’s licensing landscape, it helps to start with the three core models used today. A clear view of how each one works makes it easier to decide which approach genuinely supports your organisation’s goals.

Alongside this, it is increasingly common for organisations to use a mixed approach, combining different agreements to balance stability, flexibility, and cost control. In some cases, the best outcome is not choosing a single model, but understanding how EA, MCA‑E, and CSP can complement one another.

We have also included real examples that show how these models play out in practice and how we have supported organisations through these decisions.

Enterprise Agreement Model

An EA is a long‑standing licensing model designed for larger organisations that want to standardise their Microsoft estate and plan technology spend over several years. It remains familiar to many IT and procurement teams, but the value it delivers today depends heavily on an organisation’s size, licensing complexity, and long‑term strategy.

• Three‑year agreement with predictable, spread annual payments.
• Includes Software Assurance with upgrades, support, and licensing rights.
• Provides access to the full Microsoft product and cloud services catalogue.
• Offers multi‑year price protection and volume‑based discounts.
• Requires upfront commitment across Microsoft software and services.

We worked with a customer who had a highly stable Dynamics 365 environment and a predictable technology roadmap. After reviewing their requirements, we helped them confirm that the EA structure aligned well with their long-term strategy. It offered the multi‑year framework and predictability they needed, making EA the right fit for how their organisation operates.

Microsoft Customer Agreement for Enterprise Model

The MCA-E is Microsoft's direct digital purchasing model. It removes the traditional contract structures and provides consistent global pricing but also shifts the responsibility on to the customer. MCA-E works best for organisations that have strong internal licensing capabilities, and are comfortable handling optimisations, compliance, support and governance themselves.

• Direct purchase model with standardised global pricing.
• No Software Assurance, no-true ups, and no built-in support.
• Less contractual complexity with standardised contract terms.
• Removes the partner intermediary and requires more internal governance.

We helped a customer who initially preferred the simplicity of MCA‑E understand the nuances they would be taking on. They had underestimated the operational impact of managing optimisation, support, and compliance themselves. After reviewing their environment, we identified rising risks around licensing accuracy and cost control. With a clearer picture of these trade‑offs, they were able to make a more informed choice about the agreement that best supported their long‑term needs.

Cloud Solution Provider Model

CSP is delivered through a specialised partner who stays closely involved in supporting your environment, providing guidance, optimisation, and help with operational licensing needs. It is well suited to organisations that want flexibility in how licences are purchased and adjusted, and who value a deeper, collaborative relationship with a partner rather than managing everything directly with Microsoft.

• Deep partner support that includes guidance, optimisation, and proactive oversight.
• Monthly or annual terms with faster provisioning and flexible scaling.
• Designed for Microsoft 365 and Azure‑based environments.
• Often the most suitable choice for organisations under roughly 2,400 seats.

We helped a customer move their Azure environment to CSP to avoid higher EA spend commitments and gain full‑stack partner support. Through CSP they now benefit from more flexible billing, proactive reservation management, and ongoing cost optimisation that better aligns with how their environment operates.

Mixed model licensing 

It is also increasingly common for organisations to take a mixed approach, using different agreement types where they make the most sense. Core, stable workloads often stay on an Enterprise Agreement for predictability, while more variable workloads can sit under CSP or MCA‑E for greater flexibility and cost control. Understanding how these agreements can complement one another helps create a licensing approach that truly reflects how your organisation operates.

A public sector agency kept its EA for core enterprise workloads while moving variable products like Visio and Power Platform to CSP. Our cost analysis showed CSP delivered better flexibility and lower net spend for these products, while the EA continued to support their core licensing needs effectively.

None of these options is universally better. The right choice depends on how your organisation consumes technology, how often it changes, and where commercial flexibility or control matters most.

Azure deserves its own decision

Unsurprisingly, Azure cannot be approached in the same way as Microsoft 365 licensing, and it warrants its own conversation. The way Azure is priced and optimised depends on elements such as reserved instances, Marketplace contracts, existing commercial terms, and how dev and test environments are structured. Some of these components do not move cleanly between agreement types, which means certain workloads may remain more cost‑effective under an Enterprise Agreement, while others benefit from the additional visibility, governance, and optimisation support available through a strong CSP partner.

Large Azure estates should rarely transition in a single step. Staged changes, careful validation, and solid FinOps practices help avoid unexpected billing impacts or architectural disruption. With the right partner support, organisations can ensure each step aligns with both commercial and technical objectives.

What often gets overlooked

There are many details within Microsoft licensing that can be easy to miss, and these can materially influence outcomes if not handled correctly. Device licensing, user licensing, Software Assurance requirements, Azure reservations, Marketplace commitments, and CSP term structures all behave differently and can shift your result if not fully understood.

These are not reasons to avoid any model. They are reminders that licensing decisions carry complexity, and having a partner who can navigate the detail helps ensure choices are deliberate and aligned with your organisation’s goals.

How we help

We work with organisations to bring clarity to decisions around Microsoft 365, traditional Microsoft licensing and Azure. That includes reviewing your current agreements, modelling renewal scenarios, and comparing models from both a commercial and operational perspective. For Azure, we design transition pathways that respect how your environment operates today and where you want it to be in the future.

This is work we do every day. We understand the product terms, the commercial levers, and the realities of running these models once the contract is signed. Inde is one of the most specialised Microsoft partners in New Zealand, having recently secured its 8th Microsoft Specialization. That depth allows us to advise with confidence, without defaulting to a single answer.

Choosing the right path

Microsoft licensing is no longer a background procurement exercise. It is a strategic decision that affects cost, agility, and operational control.

The organisations that manage this well seek balanced advice and choose the model that fits how they operate. Not the one being pushed hardest.

If your Enterprise Agreement is approaching renewal, or you are questioning whether your current model still makes sense, talk to us. We will help you understand your options, quantify the impact, and choose a path that supports your organisation now and into the future.

If you’ve made it to the end of an article on Microsoft licensing without drifting off, consider yourself worthy of a gold star and maybe a coffee to recover. Get in touch and we’ll gladly shout the next one.