As 2025 begins, the world of Microsoft Enterprise Agreement negotiations is set for significant change. Organizations renewing or entering contracts this year must adapt to new challenges and shifting dynamics. Here are my top predictions for what’s coming and how to prepare.

1. E5 Won't Exist in Its Current Form

The U.S. Department of Justice is increasing its scrutiny of Microsoft’s bundling practices, particularly around E5 licenses. A recent ProPublica article highlights Microsoft’s efforts to fend off antitrust claims. This case may lead to substantial changes, including the potential unbundling of E5, which could take up to two years to resolve.

ProPublica has some credibility here, having previously exposed Microsoft’s Puerto Rico tax evasion in a detailed investigation.

Adding to the complexity, a future Trump presidency could shift the direction of this case, creating additional uncertainty for enterprise customers.
👉 What to Do: Analyze your reliance on E5 and start planning for alternative configurations to optimize cost and value if unbundling becomes a reality.

2. USA Azure List Price Increase

Azure’s rapid growth and significant infrastructure investments will drive list price hikes in 2025, particularly in the U.S., which has been largely immune to the global price increases seen over the last three years. With Microsoft making major investments, such as owning nuclear reactors to power its data centers, someone has to cover the costs—and U.S. customers are likely to feel the impact.

👉 What to Do: There are multiple proven ways to negotiate a better Azure deal than the one you have now. Engaging experts with deep knowledge of Azure pricing models, discount benchmarks, and creative deal structuring can unlock significant savings and optimization opportunities.

3. AI Will Replace Microsoft Sales Resources

Ironically, Microsoft’s own AI is beginning to replace their sales representatives. Renewals often arrive without meaningful proposals or value propositions, making automation inevitable. This shift will be further accelerated by the move from Enterprise Agreements (EA) to Microsoft Customer Agreements (MCA), which rely on an online self-service model.

As a result, Microsoft will reallocate its highly paid sales representative roles to AI development roles, emphasizing automation and operational efficiency over traditional account management.
👉 What to Do: Don’t rely on Microsoft account teams for strategic guidance. Instead, partner with specialists who can bridge the gap, navigate the complexities of MCA agreements, and deliver actionable strategies to secure better deals.

4. Strategy and Expertise Will Define Success

In 2025, the middle ground in Microsoft negotiations will vanish. Deals will increasingly fall into two extremes: either very favorable or very poor. Preparation, deal strategy, and expertise are now the most critical factors influencing outcomes.

  • Avoid repeating past strategies: What worked in your last renewal likely won’t work again. Relying on subjective or emotional reasoning for discounts is no longer effective.
  • Take control of the deal: Success depends on setting the terms and timeline for negotiations—and knowing how to execute effectively.
  • Go beyond licensing knowledge: Understanding Microsoft licensing is essential but not sufficient. Approaching negotiations armed with only licensing knowledge is like reading a "How to Swim" book and jumping into the deep end—you need hands-on experience, proven techniques, and a clear strategy to navigate the complexities successfully.

👉 What to Do: A structured, actionable strategy is critical. Leverage expertise, benchmarking data, and tailored negotiation methodologies to ensure you achieve the best possible outcomes.

5. Microsoft’s Antitrust Defense Strategy

Microsoft is actively signaling to the DoJ that they are not monopolizing the AI market. For example, Microsoft sales reps now sell C3 AI, a competitor to OpenAI. While this move diversifies Microsoft’s AI ecosystem, it primarily serves to demonstrate to regulators that owning 49% of OpenAI doesn’t make them a “Skynet in the making.”

👉 What to Do: Monitor Microsoft’s partnerships and evolving strategies. These moves could impact AI-related licensing opportunities and negotiations.

6. Beware of the Microsoft Single Cloud Strategy

In 2025, we will see fewer organizations committing to Microsoft’s single-cloud strategy. Several very large, all-Azure customers are diversifying their cloud portfolios. While this shift is often driven by commercial reasons, many organizations are finding unexpected technical benefits as well. Diversification mitigates risks and opens the door to enhanced performance and cost management.

Additionally, in the last six months, some customers have started reducing their Copilot 365 license quantities, reassessing the value and cost-effectiveness of these licenses as part of their broader cloud strategy.

And here’s a reality check: The largest hacks haven’t happened yet. I’m not hoping for this, just being a realist. Hyperscalers are going to get hacked. It will be more intrusive than spy balloons, with stolen data and outages making global headlines. When this does happen, Microsoft will likely respond with a price increase at the next EA renewal—justifying it as a cost of improving security.

👉 What to Do: Evaluate your cloud strategy to ensure it balances cost efficiency, technical benefits, and flexibility. A multi-cloud approach can reduce dependency on Microsoft, mitigate risks, and create leverage during negotiations.

7. Keystone’s Proven Expertise

In 2024, Keystone Negotiation:

  • Negotiated 2.2 million Microsoft 365 licenses, delivering exceptional results for our clients.
  • Significantly grew our business by exceeding benchmarks and securing world-class outcomes.

Our 2025 goal? More of the same:

  • Continue to hire great people.
  • Successfully negotiate the largest and most complex Microsoft contracts in the world.

We’re committed to helping organizations navigate the evolving Microsoft negotiation landscape with confidence and success.

Final Thoughts

The Microsoft negotiation landscape is evolving rapidly. Organizations that succeed in 2025 will be those that prepare early, partner with experts, and approach negotiations with precision. At Keystone Negotiation, we’re here to help you lead the way.