Microsoft Introduces 3-Year Commit Options and Key CSP Enhancements - What It Means for Your Licensing Strategy

Microsoft has announced several significant updates to its Cloud Solution Provider (CSP) programme, addressing long-standing requests from procurement professionals. Most notably, organisations will soon be able to commit to 3-year Microsoft 365 SKUs - with select products also benefitting from a limited-time 10% discount.

In addition, Microsoft has eased the transition from Enterprise Agreements (EA) to CSP, allowing existing customers to retain Teams entitlements previously bundled within M365 - a welcome reversal of their earlier stance. These changes provide organisations with new levers to optimise licensing strategy and secure longer-term pricing certainty.

3-Year Commitments: What’s Changing?

Starting 1st June 2025, the following Microsoft products will be available on a 3-year commitment through CSP:

• Microsoft 365 E3 (with and without Teams)

• Microsoft 365 E5 (with and without Teams)

• Microsoft Teams Enterprise (standalone)

Then, from 1st July 2025:

• Microsoft 365 E5 Security

• Microsoft 365 E5 Compliance

Key terms:

• Pricing will match that of the current 12-month commitment (i.e. no uplift for longer term).

• Minimum 100-seat purchase required.

• Upfront or annual billing only - no monthly options.

• You cannot convert existing SKUs mid-term; conversion will only be possible at renewal.

• The existing 7-day cancellation window remains. After that, no reductions can be made until term-end.

Discounted Entry for New Customers

For new customers only, Microsoft is offering a 10% discount on select SKUs if a 3-year commitment is made:

Available 9th June - 31st December 2025:

• Microsoft 365 E3 (with and without Teams)

• Microsoft 365 E5 (with and without Teams)

Available 1st July - 31st December 2025:

• Microsoft 365 E5 Security

• Microsoft 365 E5 Compliance

Terms:

• Offer only valid for new customers purchasing these SKUs for the first time.

• 3-year commitment required.

• Minimum 100 seats; maximum 2,400 seats.

Faster Mid-Term Upgrades

Microsoft has also streamlined support for mid-term subscription upgrades. Previously, these requests - especially those requiring cancellation of overlapping standalone services - could take up to five business days. Going forward, this process will be automated, with confirmation of upgrades now occurring within one business day. This greatly enhances flexibility for organisations scaling or consolidating services.

Transitioning from EA to CSP: Teams Entitlement Preserved

In April 2024, Microsoft announced that Teams would no longer be bundled with M365 SKUs for new customers. At that time, organisations moving from Enterprise Agreements to CSP were told they’d need to license Teams separately.

In a positive development, Microsoft has now reversed that decision. Existing EA customers who already have Teams included in their M365 plans can now retain Teams access when transitioning to CSP. This policy change removes a previously frustrating disincentive for customers seeking greater pricing flexibility via CSP.

Important Caveat: This entitlement retention only applies to customers with Teams already included. New CSP customers must still purchase Teams separately.

Wyn Take: Procurement Implications

These changes create clear opportunities for buyers to lock in pricing and reduce total cost of ownership over a 3-year horizon. However, while the pricing is appealing, the inflexible terms (no seat reductions, limited billing options, seat minimums) must be carefully assessed against your organisation’s forecasted growth and usage patterns.

At Wyn, we recommend leveraging these developments as part of a broader M365 cost-optimisation strategy - especially if you're currently tied to an EA or considering a CSP migration. Early engagement with Microsoft or your CSP partner will be critical to ensure you’re maximising discounts and avoiding contractual pitfalls.