Changes to Microsoft Monthly Billing Plans for Annual Term Subscriptions

Microsoft has announced changes to monthly billing plans for annual subscriptions across all CSP products.

Starting April 1, 2025, all new and renewing monthly billing plans for annual subscriptions will be priced 5% higher than the annual billing option for annual subscription plans.

What product areas are affected by this billing change?

This applies to product areas with per-user billing plans including all Dynamics 365 product areas such as Dynamics 365 Business Central, Dynamics 365 Finance and Operations, Dynamics 365 Sales, Dynamics 365 Customer Service, Dynamics 365 Field Service. Other product areas include Microsoft 365, Office 365, Microsoft Power Platform, Windows 365, and Enterprise Mobility and Security.

What does this mean for you?

When you renew or purchase new user licenses after April 1, 2025, and commit to an annual term subscription for that product, you will choose either annual or monthly billing. If you select an annual term with monthly billing, the subscription price will be 5% higher than if you select the annual billing option.

Can you keep your existing price?

Yes, customers who want to keep their existing pricing may choose to switch from monthly billing to annual billing with upfront payment for their annual term subscription at their renewal date.

However, please note that any price updates Microsoft releases this year will affect your existing price.

Does this impact monthly term subscriptions?

No, if you commit to a monthly term subscription with monthly billing there is no change.

What does monthly billing for an annual term subscription mean?

Customers commit to an annual term subscription for a product, but instead of paying the entire amount upfront, billing will occur each month on the day after the coverage start date.

What are the options for contract term commitments?

The options for contract term commitments are:

• Monthly –  you commit monthly and pay monthly. With this option, there is a 20% premium.
• Annually – you commit annually but have the option to pay annually or monthly. If you commit annually but pay monthly, the price will be 5% higher than the annual billing option.

For more information about this announcement, please see this blog article.

If you have any questions about these price changes, please contact us or reach out to your Account Manager.