Microsoft is revising its prices for its Online Services offerings, consolidating to create a single consistent price point.

Effective November 1, standardized pricing will mean the elimination of four price categories, A to D, which previously provided considerable discounts for larger customers.

Instead, all users will be put into the lower A category, a move Microsoft claims will “simplify licensing and improve pricing clarity for our customers.”

The changes won’t affect existing contracts, only impacting those up for renewal or new Online Services customers. Microsoft also said the changes don’t impact pricing for on-premises software, U.S. Government costs, or worldwide education subscriptions.

What’s changing?

Revisions to Microsoft’s Online Services prices will impact a swath of offerings covering security, identity, and management, including Azure and server subscriptions, the Power Platform, as well as 365 services.

Businesses that have enjoyed B, C, or D pricing now face the possibility of price increases, with larger businesses losing out on their volume discounts.

Under the expiring terms, level B applied to customers with 2,400 to 5,999 devices, level C was 6,000 to 14,999, and level D was 15,000-plus. According to CRN reports, the changes could see increases of 6% for former level B customers, 9% for level C, and 12% for level D.

The hyperscale giant contends the elimination of the waterfall discounts is part of wider efforts to make pricing levels more consistent, while making subscriptions easier to manage. It follows recent changes to the firm’s Cloud Solution Provider (CSP) program that saw all annual subscriptions with a monthly billing plan facing a 5% price increase.

Reacting to the latest pricing updates, IT firm SCC said Microsoft’s Online Services pricing update replaces volume-based discounts with “value-driven pricing where adoption, consumption, and alignment with Microsoft’s ecosystem are the new currency."

The changes come as cloud users face increased costs for services vital to their operations.

Broadcom’s controversial takeover of VMware, for example, saw a revamp of its licensing regime, replacing perpetual licenses for VMware products with bundle-based subscription models – a decision that’s forced some customers to face the prospect of paying for services they don’t need.

Last month, the firm unveiled plans to revise its VMware Cloud Service Provider (VCSP) model, transitioning to an invite-only program that’s also effective November 1.

Microsoft’s cloud rivals have also been increasing their prices of late. Amazon Web Services (AWS) increased prices for its customer identity and access management service, Cognito, late last year, while Google Cloud raised the cost of its monthly Workspace plans back in February, while keeping its annual cost the same.

The Register reported earlier this year that the hyperscaler raised the cost of its M365 suite for users in Asia Pacific to “ensure Microsoft customers are among the first to access powerful AI features in our apps."

Microsoft said Online Services customers with upcoming contract renewals should contact their account team or partner to review the changes.