The change will force a major pivot in Microsoft’s partner ecosystem, he says. In the past year, the software provider has already cut licensing solution providers (LSPs) out of EA deals and reduced their revenue streams.

In recent years, Microsoft has moved to tighten its relationships with large enterprise customers, while encouraging smaller clients to use its partner-driven Cloud Solution Provider (CSP) program, observers say.

At the same time, Microsoft is pushing partners away from global or regional price arbitrage and toward outcome-based delivery and pricing, Mackelworth wrote in an August blog post. In response, partners have begun to look for other ways to prove their worth.

“Leading partners are differentiating by providing continuous optimisation — helping clients right-size licensing, accelerate Copilot and security adoption, unlock Microsoft funding, and unlocking the value of their Microsoft 365 investment,” Mackelworth adds.

While some customers may look to LSPs to optimise their spending, those that have moved to the CSP program are insulated from the new pricing changes, notes Carly Moree, client success manager at digital transformation provider Myriad360.

Partners under the CSP program, including Myriad360 itself, can negotiate prices with customers, she says. Through CSP, customers can still negotiate competitive pricing and, in some cases, lock in rates for up to three years on some products, she adds.

“Under CSP, pricing has always been more flexible — partners aren’t bound by rigid discount tiers or volume thresholds,” Moree adds. “That means our clients will continue to benefit from adaptable terms that align with their specific business and technology goals.”