Microsoft’s Transition from EA to CSP: Frequently Asked Questions for Midmarket Customers

In late 2025, Microsoft announced a major licensing shift: it will phase out traditional Enterprise Agreements (EAs) for many small and mid-sized organizations and steer them toward the Cloud Solution Provider (CSP) model. Companies with roughly 2,400 or fewer users will no longer be eligible to renew their EAs after November 1, 2025, and must transition to either a CSP arrangement (partner-led) or the new Microsoft Customer Agreement for Enterprise (MCA-E) (a direct Microsoft agreement).

This change aligns Microsoft’s licensing with a cloud-first, subscription-based strategy: moving away from rigid 3-year contracts in favor of more flexible, agile models better suited to modern businesses. Naturally, this shift has raised many questions and concerns for customers who have long relied on EAs. Below, we address the top FAQs about the EA-to-CSP transition and provide clear, customer-friendly answers to help your organization navigate the changes confidently.

FAQ: Microsoft’s Move from EA to CSP – Your Questions Answered

Q1: "Is Microsoft ending Enterprise Agreements?"

A: Yes: for many mid-sized customers, the traditional EA, as you know it, is being retired. Microsoft is phasing out EAs for smaller and mid-market organizations. In fact, if your company has fewer than 2,400 users, Microsoft will not offer you an EA renewal after your current term ends. This means that, at your next renewal date (on or after November 1, 2025), EA will no longer be an option for most businesses of that size.

Larger enterprises (above ~2,500 seats) may technically still qualify for EAs a while longer, but even they are seeing changes: notably, Microsoft eliminated the volume discounts for online services in EAs, so all customers now pay “Level A” pricing at renewal. In other words, the EA’s old pricing advantages are being phased out in preparation for this transition. Microsoft’s goal is to standardize licensing under new models and encourage customers to adopt more cloud-aligned agreements (CSP or MCA) that offer greater flexibility and partner-driven support.

Q2: "Do we have to move to CSP, or are there other options (like MCA-E)?"

A: You have two main alternatives: the CSP program or a Microsoft Customer Agreement (MCA) for Enterprise. If Microsoft won’t renew your EA, you must choose a new licensing vehicle for your Microsoft subscriptions, but it doesn’t have to be CSP if that doesn’t fit your organization. The primary modern options are:

• Move to a CSP (Cloud Solution Provider) arrangement: working with a qualified Microsoft partner (like TrustedTech) who will handle your licensing, billing, and support under Microsoft’s CSP program.
• Sign a Microsoft Customer Agreement for Enterprise (MCA-E): directly with Microsoft. The MCA-E is essentially a direct purchasing agreement with Microsoft that replaces the EA contract.

In summary, CSP tends to offer greater flexibility and partner-provided hands-on support, whereas MCA-E maintains a direct relationship with Microsoft but offers fewer built-in services. Most mid-market organizations find CSP to be the most practical option because it provides agility, simplified billing, and expert partner guidance without requiring a large long-term commitment.

Q3: "What happens to our pricing and discounts when we move off EA? Is CSP more expensive?"

A: Microsoft’s pricing model for online services is now essentially the same across EA, CSP, and MCA for mid-market customers, but losing EA volume discounts may increase your costs if you previously had them. In October 2023, Microsoft announced it would eliminate the tiered volume discounts (Levels B, C, D) for cloud services in Enterprise Agreements. As of November 2025, all EA customers pay “Level A” (list price) for Microsoft 365, Azure, and other online services at renewal, regardless of organization size.

This means that if your EA included discounted pricing for large quantities, those specific bulk discounts will not carry over under CSP or MCA-E. Enterprise customers who were on high discount tiers could see roughly 9 to 12% price increases on their Microsoft 365 and Azure costs at renewal due to this change. Mid-sized EA customers (who were often already at or near Level A pricing) might see little to no change in per-license prices, since they were not receiving deep volume discounts to begin with.

Importantly, CSP itself is not inherently more expensive than an EA. In fact, Microsoft’s strategy was to make pricing “standardized” so that the choice between EA vs CSP is about flexibility and support rather than price. However, under CSP, you may find opportunities to optimize costs: for example, you can avoid paying for unused licenses by adjusting counts down during your next monthly/annual term, something you couldn’t do mid-term in an EA. Also, CSP partners like TrustedTech often help identify cost savings by right-sizing your subscriptions or finding promotions.

Q4: "What happens to our existing licenses and services during an EA-to-CSP transition? Will our users lose access? What about moving Azure to CSP: is there downtime?"

A: If managed properly, your transition from EA to CSP should not disrupt your users or services. Your Microsoft 365 licenses will be reprovisioned seamlessly under the new CSP subscriptions, with the same features and access as before: end users typically won’t notice any change in their day-to-day use of Microsoft services. No loss of data or functionality is expected; you are not “starting over”, you are simply changing the agreement and billing mechanism behind the scenes. Partners and Microsoft have developed tools and processes (such as the Channel Transfer/“Renew to CSP” utility) to transition expiring EA subscriptions to CSP with aligned timing, ensuring zero overlap or gaps in service. Similarly, Azure subscriptions can be transferred into a partner’s CSP “Azure Plan” without shutting down your resources. The URLs, resource groups, and configurations remain the same; only the billing context changes. With proper planning, it’s possible to have no service downtime at all during an EA-to-CSP migration.

One thing to be mindful of is any on-premises licenses or Software Assurance (SA) benefits you had under your EA. You won’t lose the perpetual licenses you already own: those remain yours, but benefits attached to SA (such as version upgrade rights, License Mobility, training vouchers, or support credits) will end when your EA expires unless you make other arrangements. To maintain those benefits, you might consider purchasing server licenses with SA via a separate program (e.g., a Microsoft Products & Services Agreement, MPSA) or transitioning to subscription equivalents.

Q5: "When do we need to start planning for the EA to CSP migration? What if our EA expiration date is coming up soon? Is there a grace period after EA expires?"

A: Start planning as early as possible: ideally, 6 to 18 months before your EA end date. Early planning gives you time to audit your current licenses and usage, explore CSP vs. MCA options, and negotiate the best pricing. Organizations that started planning 18 months before EA expiry achieved significantly better pricing (15-25% cost savings) than those that waited until 6 months or less. Microsoft typically offers a brief grace period of ~30 days after an EA expires, during which your services won’t be cut off. However, relying on it is risky: if you let your EA lapse without a new CSP or MCA in place, you could face service disruption or unlicensed usage. Bottom line: Begin the transition process now, well before your EA’s end date.

Q6: "Can CSP support enterprise-scale environments? We have over 1,000 users: is CSP really suitable, or is it only for small businesses?"

A: Yes: the CSP model has evolved and can absolutely support larger organizations (1,000 users and well beyond). It’s a common misconception that CSP is just for small businesses. In reality, Microsoft has expanded the CSP program in recent years to accommodate mid-market and even enterprise customers. For example, as of 2025, Microsoft introduced new 3-year subscription terms for key enterprise products (such as Microsoft 365 E3 and E5) under CSP. In terms of capacity and features, CSP covers the full spectrum of Microsoft cloud services, including Microsoft 365 for thousands of seats, Azure, Dynamics 365, Power Platform, and more. Microsoft’s shift to CSP is fundamentally about acknowledging that even larger organizations need more flexibility and personalized support than the old EA model provided.

Q7: "How does Microsoft 365 Copilot licensing fit into this? Can we buy Copilot through CSP? Does the pricing change if we move off EA?"

A: Microsoft 365 Copilot is available to purchase whether you have an EA, CSP, or MCA; the licensing is consistent across all channels. There is no extra cost penalty for buying Copilot via CSP: the official price is the same $30/user/month (for commercial customers), regardless of channel. Microsoft also removed any minimum seat requirement for Copilot across all licensing programs. Functionally, the Copilot service and features are identical, no matter how you buy it.

Q8: "Is Microsoft forcing this change? Why are they pushing customers off EAs: is it optional or mandatory?"

A: Effectively, yes: if your organization falls into the mid-market segment, Microsoft is mandating a move off EAs. This isn’t simply a suggestion or opt-in program; Microsoft has explicitly changed its policy to stop renewing EAs for most customers who fall below the defined seat threshold. Why is Microsoft doing this? The move is driven by Microsoft’s strategic vision for a modern, cloud-optimized licensing ecosystem. Today’s businesses operate in a more dynamic, cloud-centric world where user counts fluctuate, and new services spin up on demand. Microsoft’s answer has been to embrace flexible subscription models (CSP and MCA) that allow customers to scale up or down and pay for what they use. Another key motivation is enhancing support through partners. Under an EA, a mid-sized company might not get much hands-on attention from Microsoft; in contrast, the CSP model is “partner-led”: Microsoft wants its certified partners to provide high-touch, personalized service to these customers.

Strategic Benefits of CSP for Mid-Market Customers

For mid-market companies, the Cloud Solution Provider model offers several strategic advantages:

• Greater licensing flexibility: You can adjust your license count as needed. This is a game-changer compared to the fixed commitments of an EA.
• Improved cost transparency & predictability: Instead of large upfront payments and annual “true-up” reconciliations, CSP typically uses pay-as-you-go or monthly/annual billing. While per-unit prices in CSP are at list, the ability to drop unnecessary licenses can yield significant savings over time.
• Access to the latest technology and cloud services: CSP is inherently a cloud-first model, making it straightforward to adopt new Microsoft services as soon as they’re released, such as Microsoft 365 Copilot and new AI capabilities.
• Partner expertise and support: Under CSP, your Microsoft partner becomes an extension of your IT team. Having a skilled partner means you get faster response times and proactive help to optimize your environment and costs.
• Eliminating the “licensing tax” of EAs: EAs frequently led to “shelfware”: companies paying for licenses they never used. CSP provides a path to reclaim agility and cost efficiency by paying only for what you need.
• Standardized, simpler terms: The Microsoft Customer Agreement is a simplified, digital agreement framework. An MCA-E is evergreen (has no expiration), reducing the administrative burden of managing Microsoft licenses.

Conclusion & Next Steps

Moving from an EA to a CSP is a significant change, but it doesn’t have to be painful. Microsoft’s transition away from Enterprise Agreements is driven by the realities of today’s cloud-centric world: businesses need flexibility, up-to-date services, and responsive support, which the CSP model is designed to deliver. By understanding the key differences and planning ahead, you can turn this change into an opportunity to modernize your IT, optimize costs, and improve the support your organization receives.

At TrustedTech, we’ve helped many customers navigate the EA-to-CSP journey. As a Solutions Partner, we combine licensing expertise with hands-on technical support to ensure a smooth transition with no surprises. Contact TrustedTech today to speak with our Microsoft licensing specialists. We’ll provide a personalized roadmap for your organization, ensuring your Microsoft environment remains secure, optimized, and future-ready.

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