2025 Microsoft Licensing Updates: Fresh Insights and What You Need to Know

Ever found an old loaf of bread in the cupboard or a carton of milk pushed to the back of the fridge? You know that sinking feeling when you realise it’s gone off—and now your money’s down the drain. Microsoft licensing can feel just like that—easy to forget, but expensive if left unchecked. With major changes coming in 2025, keeping your licensing strategy fresh is more important than ever.

The good news? We’ve got your back. Let’s take the stress out of it and help you stay ahead.

Here’s everything you need to know about Microsoft’s licensing updates for 2025 and how to make sure you’re getting the most value for your business.

So, what's changing in 2025?

Cloud Subscription Pricing Adjustments

From February 2025, Microsoft is dropping cloud subscription prices in the UK by 5-6%. This is due to a realignment exercise Microsoft have completed that reflects the UK to USD exchange rate, and if your licensing renewal falls between February 1st and March 31st it’s a golden opportunity for businesses to reassess their cloud strategy and explore cost-effective solutions.

5% Price Uplift on Specific Licences

Here’s where things get interesting: Historically, the price per user for annual commitment licenses was the same whether you paid upfront or monthly. But, from April 1st, 2025, Microsoft is introducing a 5% price increase for those who opt for monthly billing on certain licenses, like Microsoft 365, Power BI, Teams, and Copilot.

Here’s the kicker: You can avoid this increase by renewing your annual subscription with monthly billing before April 1st, 2025. For example, if your annual subscription started in June 2024, renewing it in June 2025 would mean paying the 5% uplift unless you make the switch to annual advance billing now. It’s worth checking your options before this change hits.

15% promotional discount for M365 Enterprise E3 to E5 upgrade

Moving from M365 Enterprise E3 to E5 in 2025 could unlock a whole bundle of advanced features. Microsoft’s offering a 15% discount on E5 annual commitments from January to June 2025—now might be the perfect time to consider an upgrade.

Teams Licensing Gets a Revamp

Microsoft Teams has had a big facelift in 2024 with new licensing options. These updates will bring enhanced collaboration tools and adjust pricing, so it’s time to reassess your plan. For businesses already using Teams through Microsoft 365 (M365) or Office 365 (O365), this means you’ll need to take a closer look at whether your existing plan still offers the best value.

Power BI Pricing Updates

Power BI Pro and Premium Per User (PPU) plans are going up in April 2025 by 40% for Power BI Pro and 20% for Power BI Premium Per User Per Month (PUPM). If your business relies on data visualisation and reporting, now’s the time to evaluate how to maximise the value of these tools before the prices rise.

So, how can you stay ahead of the changes?

• Audit your Current Licensing

Take a good look at your licensing setup. Check usage patterns, underutilised licences, and areas where you might be overspending. Knowledge is power.

• Budget for Adjustments

Factor in price increases like the 5% uplift and Power BI changes when planning your budget for the year ahead. A little preparation goes a long way.

• Seek Expert Guidance

So why Intercity?

Managing Microsoft licensing isn’t glamorous, but neglecting it can be like letting bread and milk go off—an unnecessary waste of money and resources. With so many updates coming in 2025, staying on top of your licences is more important than ever to avoid overpaying or missing out on value.

At Intercity, we make licensing easy. From assessing your current agreements to navigating new updates, we’re here to make sure every licence is working harder for your business. Our expertise takes the stress out of the equation, giving you the confidence that your investment is driving real results.