Over the last two decades, the way organisations purchase Microsoft software has undergone a radical transformation. What was once a relatively straightforward process of buying perpetual licences in bulk has now evolved into a complex web of subscriptions, cloud credits, and usage-based commitments. At the same time, the cost of doing nothing—simply renewing the same agreements without challenge—has never been higher.

Understanding this evolution is critical for IT, procurement, and finance leaders who want to control costs, optimise value, and avoid being caught off guard by Microsoft’s frequent changes. It’s also where independent Software Asset Management (SAM) providers can play a vital role—bringing impartial expertise, market insight, and a client-first perspective that helps organisations make sense of the complexity and avoid overpaying.

The Old World: Volume Licensing and Price Banding

In the not-so-distant past, Microsoft software purchasing was centred on the concept of volume licensing. Organisations could achieve significant savings through Microsoft’s price banding tiers (A–D). These bands rewarded scale: the more licences you purchased, the greater the discount applied across the entire agreement.

The model encouraged enterprises to consolidate purchases and standardise on Microsoft technologies. For example:

• Tier A pricing applied to smaller commitments (usually 250+ licences).
• As organisations grew into Tiers B, C, and eventually D, discounts increased substantially.
• The incentive was clear—buy more, achieve better unit costs, and enjoy consistency across the enterprise.

At the same time, the conversation often shifted from optimising individual licences to buying full suite products. Why? Because the perceived administrative overhead of managing hundreds of different licence types often outweighed the incremental cost of simply rolling out a “highest edition” licence for everyone.

For example, many enterprises chose to upgrade all employees to Office Professional Plus or to purchase Enterprise CAL Suites, even if not all staff required the full feature set. The thinking was simple: the time, risk, and cost of tracking who needed what could be more expensive than providing blanket coverage.

Independent SAM advisors could already see the flaw in this approach: what looked efficient on paper often created systemic overspend. Having an external partner review usage data and negotiate terms frequently uncovered savings that internal teams overlooked.

The Shift to Suites and Enterprise-Wide Adoption

Microsoft cleverly aligned its pricing models to reinforce this behaviour. By offering Enterprise Agreements (EAs), the company encouraged organisations to commit to enterprise-wide adoption of products like Office, Windows, and CAL Suites.

On the surface, this approach simplified licensing:

• One contract, one price list, and predictable annual payments.
• Broad access to Microsoft’s latest technology stack.
• Easier management of compliance risks.

However, it also created a dynamic where many organisations paid for capabilities they didn’t fully use. While the unit price per licence looked competitive, the aggregate cost often reflected a significant overspend on unused or under-utilised features.

This is where an independent SAM provider adds real value. By remaining vendor-neutral, they can analyse what an organisation truly uses versus what it is licensed for. That impartial perspective helps clients avoid being drawn into “more is always better” agreements that suit Microsoft’s revenue model more than the customer’s business needs.

Today’s Reality: Cloud, Subscriptions, and the Cost of Doing Nothing

Fast-forward to today, and the landscape looks very different. The traditional volume discounts and perpetual licences have been steadily replaced by subscription-based models delivered through Microsoft 365, Dynamics 365, Azure, and the broader online services portfolio.

The challenge? Subscription licensing doesn’t reward inactivity. If you continue to purchase the same bundles or renew on the same terms, your costs are likely to rise—sometimes dramatically.

This is especially relevant in the context of Microsoft’s licensing changes coming into effect in November. Early indicators suggest that organisations who “do nothing” and simply roll over their agreements could face substantial cost increases. Unlike the old world where inertia still gave you access to the same price bands, today’s Microsoft model actively penalises customers who fail to optimise.

Put simply: there is always a cost to doing nothing. For Microsoft customers, that cost is becoming harder to ignore. Independent SAM providers bring the foresight and market knowledge needed to quantify the risks of inaction and map out proactive steps—before those increases hit the budget.

When Managing Licences Costs More Than Overbuying

One of the most interesting questions organisations face is: when does the cost of managing licences outweigh the cost of simply standardising on the highest version for all users?

This is not a theoretical debate. For many companies, the administrative burden of rightsizing, reallocating, and tracking licences across large workforces can consume significant IT and operational resources. Every adjustment requires coordination across IT, procurement, HR, and finance. Mistakes can lead to costly compliance issues during audits.

The decision often boils down to three factors:

1. Scale – Larger enterprises with thousands of users find it harder to track granular usage.
2. Workforce diversity – The wider the variance in user needs, the greater the potential savings from targeted licence assignments.
3. Operational maturity – Organisations with mature SAM/ITAM practices are more likely to succeed in optimising at scale.

Where maturity is low, many organisations find themselves overpaying as a form of “insurance policy” against complexity. But as subscription costs rise, the tipping point is shifting. Today, the cost of overbuying premium versions for all users can be significantly higher than investing in proper governance and optimisation.

Independent SAM providers can bridge this maturity gap. By delivering the processes, tools, and market benchmarks that many organisations lack internally, they make optimisation both achievable and sustainable.

The New Agreements: Cloud Credits, Flexibility, and Complexity

Microsoft’s agreements themselves have also evolved. No longer limited to straightforward Enterprise Agreements, organisations now navigate a growing number of options, including:

• Microsoft Customer Agreement (MCA) for cloud subscriptions.
• Cloud Solution Provider (CSP) models for flexibility in smaller increments.
• Server and Cloud Enrolment (SCE) agreements that provide benefits for standardising on server and cloud technologies.

While these agreements can provide flexibility and access to cloud credits, they also introduce new layers of complexity. For example:

• The Server and Cloud Enrolment (SCE) ties discounts to commitments on products like SQL Server, Core Infrastructure Suites, and Azure. As Microsoft adjusts terms, the financial impact of not reviewing enrolments can be significant.
• Azure commitments now often form part of enterprise discussions. Organisations must forecast consumption accurately or risk paying for unused cloud credits—or, conversely, exceeding commitments and facing higher rates.
• With multiple agreement types in play, alignment between IT, procurement, and finance is more critical than ever.

This is another area where independent SAM support proves invaluable. They can interpret the fine print, model scenarios, and give an unbiased view of which agreement structure really delivers the best value for the client—rather than the best revenue for Microsoft or its reseller partners.

Why Proactivity Matters More Than Ever

The message is clear: the era of passive Microsoft licensing management is over.

• In the past, doing nothing might have still delivered decent pricing through volume tiers.
• Today, doing nothing means exposing your organisation to price uplifts, unfavourable terms, and unnecessary costs.

Proactivity in reviewing agreements, optimising licences, and aligning cloud commitments with real usage is no longer optional—it’s essential.

This is exactly where independent SAM providers deliver their greatest value:

• Bringing an impartial perspective that isn’t tied to Microsoft sales quotas.
• Providing benchmarks from across the market.
• Helping clients build governance frameworks that keep costs under control long after the renewal cycle ends.

Looking Ahead

As Microsoft continues to pivot its business model towards cloud services and recurring revenue, we can expect further changes in pricing, bundling, and agreement structures. The upcoming November changes are just the latest reminder that organisations cannot afford to be passive consumers.

The evolution from volume discounts and enterprise-wide suites to cloud credits and flexible subscriptions reflects broader trends across the technology industry. But for Microsoft customers, the financial stakes are uniquely high.

The question every organisation should be asking is not “How do we renew?” but “How do we evolve our strategy to match Microsoft’s evolution?” And just as importantly: “Who do we trust to guide us—our reseller, Microsoft, or an independent advisor whose only priority is our best outcome?”

Final Thought

Microsoft licensing has always been complex, but the current environment demands a new level of discipline and foresight. The cost of doing nothing has never been greater. By combining an understanding of the past, embracing today’s realities, and proactively shaping future agreements with the support of an independent SAM provider, organisations can avoid unnecessary cost increases, unlock real value, and ensure their Microsoft investments deliver measurable business outcomes.