The 2026 Microsoft price shock: What EA Level C/D customers must do now

Reading Time: 9 minutes

Microsoft didn’t just raise prices. They reshaped the entire licensing landscape.

If you’re a Level C or D Enterprise Agreement customer, this isn’t a routine increase — it’s a financial stress test on your entire Microsoft investment. The 2026 price adjustments land on top of the November 1, 2025 changes, the removal of waterfall discounts, and a dramatic repackaging of the major suite bundles.

What does this mean for you? Simply put: your next renewal will look very different. If you’re not prepared, these changes could have a significant impact on your budget.

How do you stay ahead of this? You don’t guess. You don’t react. Instead, you take a proactive approach with three key analyses that show exactly what this means for your environment — and what steps to take next:

• A financial impact model
• A strategic roadmap based on real feature usage
• A disciplined cost-optimization plan

These three steps form your playbook. Here’s how they work:

1. Financial impact assessment

Microsoft’s 2026 pricing changes don’t exist in a vacuum. They stack on top of the November 1, 2025 price increases you just lived through. For Enterprise Agreement Level C/D customers, these two waves together don’t create a “price increase.” They create a multi-year financial stress test on your Microsoft investment.

This is where you start. And to keep this manageable, I recommend focusing only on the top of your EA: your primary suites (E3/E5), your volume add-ons, and the major workload SKUs tied directly to those suites.

Why? Because that’s where 80-90% of your annual Microsoft spend lives. Once you “solve” for the top of your EA, the rest of your licensing tends to follow the same patterns. Here’s the sequence every Level C/D enterprise should walk through:

Step 1: Identify WHEN the new pricing will affect you.

These new list prices hit at your EA renewal, not automatically on July 1, 2026.

But here’s the catch: If you add a SKU mid-term that you don’t currently have on your EA, you may walk straight into post-July pricing.

Pro tip: Make reservations now for any SKU you think you might need later. It doesn’t lock you into usage — it protects you from stumbling into the new price early.

Step 2: Model your renewal cost using TODAY’S pricing.

Take your current suite footprint and major add-ons. Pretend you are renewing today.
Compute:

• Annual cost
• 3-year EA cost

This is your baseline — your “if nothing else changed” number.

Step 3: Recalculate the exact same footprint using post July 1, 2026 list prices.

Now apply Microsoft’s new pricing structure (remember: no more waterfall discounts). If you’re a Level C/D EA customer, the difference between Step 2 and Step 3 is usually dramatic — often shocking.

This is your potential financial impact.

Step 4: Apply your contractual protections (carefully).

Some EA customers have not-to-exceed clauses or other guardrails. But when Microsoft changes list prices, those protections don’t always behave how you expect.

• Not-to-exceed clauses
• Price caps
• Change-in-terms protections
• Add/Drop rules
• Multi-year protections

Pro tip: These get messy when list prices shift. It’s very easy to misapply protections at this scale — and very costly to get it wrong.

Step 5: Compare the two models to reveal your true impact.

Now you know:

• How steep the impact really is.
• Whether your current spend trajectory is sustainable.
• Whether your architecture assumptions still hold.
• How aggressively you need to rethink your licensing model.

For large enterprises, this is the moment where strategy becomes non-optional.

One honest note about getting help…

Could you build this stress test internally? Yes.
Should you? Probably not.

This isn’t a spreadsheet exercise. It’s a high-stakes financial forecast on an eight- or nine-figure spend. We’ve run this analysis more than a thousand times. It is absolutely worth phoning a friend — just like when you do complex taxes.

2. Strategic diagnostics: Building your Microsoft roadmap

Once you understand your risk level, the next step is knowing what your licensing future should actually look like.

This requires a roadmap — but not the generic “rightsizing” exercise everyone talks about.

You need a roadmap built on:

• What you’re using.
• What you plan to use.
• What you plan to stop using.
• Dependencies across security, identity, endpoint, and collaboration.
• Your near-term and long-term Microsoft strategy.

This is where most enterprises get stuck. So here’s your cheat code.

The E5 cheat code — Start with everything

Microsoft offers dozens of bundles. They overlap, change frequently, and can be interpreted three different ways depending on which Microsoft deck you’re looking at. But there’s one bundle that contains every feature that matters: Microsoft 365 E5. Everything else is a derivative of that bundle. So instead of staring at 20 different SKU charts, build a simple three-column map of the M365 E5 feature list:

Column 1 — Features you use today

This is your Minimum Viable Licensing (MVL).

Column 2 — Features you don’t use yet, but plan to use before your next renewal

This is where future value resides.
(Especially in AI, security, analytics, and automation.)

Column 3 — Features you use today but plan to sunset

This is where savings often hide — expensive capabilities you no longer need.

By the time you finish these three columns, you have a rudimentary but actionable roadmap.

“Okay, but there are 187 features…”

Correct — and most people don’t have weeks to research them. That’s why we’re launching Microsoft Licensing Webinar Season 2 this December. We’re walking through the entire M365 E5 feature set in a structured way that makes practical sense.

We’ll give you the cheat code so you don’t have to do months of decoding work.

Why strategic diagnostics matter (And where Cloud Matrix comes in)

Once you start roadmapping, you’ll quickly realize:

• You know some of your roadmap.
• You understand some of your usage.

But you don’t have a way to quantify the value over time.

• Or align IT, security, finance, and procurement.
• Or predict where Microsoft’s bundles are headed.
• Or benchmark yourself against similar enterprises.

This is where our strategic diagnostic — Cloud Matrix — comes into the picture. Cloud Matrix:

• Quantifies every Microsoft feature in terms of business value.
• Aligns that value to your roadmap, timing, and maturity.
• Generates a Value Score that tells you how efficiently (or inefficiently) you’re licensing.
• Models multiple licensing futures (E3 vs. E5, Enterprise vs. Frontline, suite vs. add-on, EA vs. CSP).
• Highlights “fault lines” — mismatches between features used and features paid for.
• Provides a visualization your executives will actually understand.
• Helps IT, security, finance, and procurement finally align on a single view.
• Evolves over time as your environment evolves.

We’ve run Cloud Matrix with some of the largest enterprises in the world. It’s not a theoretical tool — it’s a strategic decision framework for the next 3-6 years of your Microsoft roadmap. The E5 cheat code gets you started. Cloud Matrix finishes the job.

3. DIY savings plan: User profiling (Where the real money lives)

Your roadmap tells you what you intend to use. Your DIY Savings Plan tells you what you should actually be licensing based on real roles, real usage, and real value — not arbitrary bundle choices. This is user profiling done right.

Profiling is where enterprises uncover the most savings. And it starts with a simple question: “What is the Minimum Viable Licensing (MVL) for each user group?” Here’s how DIY profiling works:

Step 1: Apply your roadmap to your user base.

Take your E5 cheat map/Cloud Matrix output and begin mapping users:

• What features does this group actually need?
• Are we licensing to the job, or to the exception?
• Are we carrying legacy add-ons or third-party tools that no longer justify the cost?

Step 2: Look for rightsizing opportunities

Are there ways to rearrange your licensing blocks to yield meaningful savings? Right-sizing doesn’t always mean reducing your Microsoft configuration to a more appropriate Minimum Viable Licensing profile — it can also mean replacing expensive third-party applications with Microsoft capabilities already included in bundles you’re paying for.

• E5 → E3 + targeted add-ons.
• E3 → F3 (often massively overlooked).
• Heavy add-ons → cheaper equivalents.
• Expensive third-party tools → capabilities already in Microsoft bundles.

This is where app rationalization becomes strategic licensing.

Step 3: Challenge assumptions

Two powerful examples:

Example A — Overpaying for one feature

If a user group is using one expensive feature inside a larger add-on, ask whether that feature is:

• Critical.
• Replaceable.
• Available cheaper elsewhere.
• Already included in a Microsoft bundle you’re likely to adopt anyway.

Example B — Paying big money for a third-party tool that Microsoft now includes

If you’re licensing a third-party solution across your enterprise, and Microsoft now includes it in E5 (or as a simple add-on): Is that tool still worth the spend?

These are the questions where enterprises find eight-figure savings.

The $205 million story (Proof it works)

One global manufacturer we worked with had:

• A complex workforce.
• Carefully orchestrated roles.
• A dedicated internal profiling team.
• Layers of operational, compliance, and plant-level constraints.

They licensed multiple carefully constructed profiles across hundreds of thousands of users — with each user class licensed for the Minimum Viable Licensing. They’d turned profiling into art and had a whole team of people dedicated to it. It was messy and difficult. But the result?

$205 million in validated savings over five years.

Not a guess. Not a theoretical model. We compared what they would have spent on M365 E5 vs what they actually spent using disciplined profiling. The savings were real — and enterprise-transforming.

What every successful profiling customer says:

1. “This was extremely hard work.”
2. “It was absolutely worth it.”

DIY profiling doesn’t mean “do everything alone.” It means you start the process — and then you bring in people who’ve done it hundreds of times to help you finish it correctly. Because at enterprise scale, the upside is enormous — and so is the risk of getting it wrong.

The time to act is now

If you’re an EA Level C or D customer, you now have the three building blocks you need to understand and respond to Microsoft’s 2026 pricing changes:

1. A financial impact assessment.
2. A strategic roadmap grounded in the real feature mix your organization needs.
3. A DIY savings plan built on disciplined, role-based user profiling.

Those three pieces — done in that order — will tell you:

• how steep your impact is,
• what your licensing future should look like, and
• where the real savings opportunities live.

And the truth is simple: you can’t skip any of them. This announcement tells you why you need a new strategy. The roadmap tells you what that strategy should be. User profiling tells you how much you can save by executing it correctly.

This is the playbook we’ve used with some of the largest companies in the world. It works. None of this is about selling more Microsoft or pushing upgrades. It’s about helping you protect your budget, align your organization, and make smart, data-driven decisions as Microsoft reshapes the licensing landscape.

NEXT STEPS

On December 10 at 12:00 p.m. ET, I’ll be walking through real examples of each step — including anonymized financial risk, Cloud Matrix outputs, and user profiling scenarios — and taking live questions so we can talk about your specific challenges.

Register here to reserve your spot: M365 price increases: What Microsoft didn’t tell you — and what you need to do next.

This is a big moment for Microsoft customers. You don’t have to face it blind. Let’s navigate it together.