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Latest Insights on Microsoft Licensing - January 2024 Updates

We are pleased to present the latest insights on Microsoft licensing updates for January 2024.

Overview of Microsoft Licensing Updates (January 2024)

January 2024 has been a notably quiet period in the realm of Microsoft licensing. This month's primary focus is refining terms and reorganising Azure services, with no significant shifts or new introductions, with only one exception we'll touch upon further in this update.

While the changes in January might appear minor, they are part of Microsoft's continuously evolving licensing landscape. To explore these updates in greater detail, visit Microsoft Product Terms and look into the section titled 'Summary of Changes'. 

Copilot for Microsoft 365 Availability for Education Clients

In January 2024, Microsoft extended the availability of Copilot for Microsoft 365 to educational institutions. 

Previously limited to enterprise customers, this expansion into educational plans like A3 and A5 marks a new offering from Microsoft in the academic field. This update is particularly relevant for educational institutions that already utilise Microsoft 365. 

Cost Implications and Accessibility of Copilot for Education Clients

The price of Copilot for Microsoft 365 remains flat at $30 (about 23-24 UK pounds) per user per month. This pricing remains consistent across all M365 plans, including the new academic A3 and A5 plans, and does not differ from the pricing for enterprise clients.

It is a substantial addition to the cost of Microsoft 365 for educational institutions. It necessitates a significant financial commitment, especially considering the minimum requirement of 300 users per tenant. The total additional cost is at least $108,000 per year.

These two requirements not only place a notable financial burden on educational institutions but also raise questions about the accessibility of such advanced AI tools for smaller or financially constrained establishments.

Speculations and Rumors about Changes in Copilot Licensing

Rumours in the industry point to potential changes in Copilot licensing, particularly regarding its accessibility and applicability to more Microsoft 365 plans. 

There's speculation about Microsoft possibly reducing Copilot's current 300-user minimum requirement, making it more accessible to a broader range of organisations, including smaller businesses and educational institutions. That is rumoured to happen already in Q1/2024. However, some experts are less optimistic and suggest Q1/2025 as a possible milestone.

Update: it happened! You can start from one Copilot license.

Consequently, we are expecting an extension of Copilot's availability to Microsoft 365 Business plans, which, if true, could significantly broaden its user base. These plans were briefly listed as eligible in November, only to be removed later. It's an issue that particularly affects smaller organisations, which find the current user minimum and pricing structure prohibitive.

Update: This happened too. Microsoft 365 Business clients can buy Copilot licenses.

Potential Phasing Out of Microsoft Enterprise Agreement

There is increasing speculation that Microsoft plans to discontinue the Enterprise Agreement (EA) by 2026. This move would mark a significant shift for many organisations that have long relied on the EA for their Microsoft licensing. Historically, Microsoft has attempted to phase out the EA, starting from the Microsoft Products and Services Agreement (MPSA) presented as an EA alternative in 2012 and the more recent Cloud Solution Provider (CSP) program.

Despite these efforts, the EA remains firmly entrenched, particularly among larger enterprises. Its appeal lies in the programmatic discounts across four different price levels, offering substantial savings that the CSP's uniform pricing model doesn't provide. The CSP program currently lacks the tiered pricing structure of the EA, which has been a critical factor for larger enterprises in managing software costs effectively.

Microsoft's potential move to phase out the EA raises several questions about the future of enterprise licensing. If your organisation is large, you might face the challenge of adapting to a new framework, such as the Microsoft Customer Agreement for Enterprise (MCA-E), which significantly differs from the EA regarding structure and discounts. This transition could lead to more complex and much more demanding negotiations.

As the situation evolves, it remains to be seen how Microsoft will manage this transition and whether alternatives like the MCA or CSP can adequately meet the needs of large enterprises. 

If your organisation uses the EA, you should monitor these developments and consider how shifting away from the EA could impact your licensing strategy and software asset management.

Talk to a Microsoft Negotiation Expert

If you have any questions, our negotiation experts are only a message away. We are 100% independent from selling Microsoft licenses and services, and thus, our advice is unaffected by sales targets or Microsoft partnership loyalty demands.