Author: rich_gibbons

Microsoft Licensing, products, Cloud, and more!
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Microsoft 365 Copilot Pay As You Go (PAYG) pricing


Microsoft are huge fans of the Pay As You Go (PAYG) licensing/billing model for various products and now it has been extended for M365 Copilot and Copilot Studio.

Agents created with Copilot Studio provide answers to users, and these answers are measured in “messages:

Classic Answers

These are static answers written when the agent is created and only change when manually updated. These cost 1 message.

Generative Answers

These are dynamically generated answers using the conversation’s context and other knowledge. These cost 2 messages.

Tenant Graph grounded

This is a new option and allows agents to access internal information in SharePoint and also other sources via Graph connectors. This information will be incorporated within “generative” answers given by agents. These cost 30 messages.

This capability is included for users licensed with M365 Copilot and is also available on a PAYG basis for other users.

Autonomous Actions

As the name suggests, these agents act on their own via “generatively orchestrated triggers, topics, data connectors, and workflows” to complete tasks, answer queries etc. These cost 25 messages.

These are NOT included with the M365 Copilot license, so using agents with autonomous actions will be additional spend on top of the $30 per user per month license…which is already an add-on to your existing M365 license!

How does the pricing work?

Each message costs $0.01 which seems very low…however…it can quickly start to add up. Here is an example from Microsoft:

12,800 x $0.01 = $128 in PAYG costs.

Not a huge amount, about $33,280 per year. However, that’s for 100 users. If you had 1,000 users in that scenario it becomes $332,800 per year which is a much more significant amount…it’s about the same as buying M365 Copilot licenses for those users in fact.

You can purchase messages in bundles of 25,000 for $200 per month ($0.008 per message) which can help reduce spend a little on PAYG.

It seems likely that the behaviour Microsoft are hoping to drive will be for organisations to start out with this model and then, as spend increases, move them across to M365 Copilot licenses to increase the stickiness and adoption of their latest focus product.

You can see more from Microsoft here.

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Microsoft Product Terms: February 2025


Photo by Markus Winkler on Pexels.com

It’s the Microsoft Product Terms for February 2025:

Added Azure Managed Applications, Azure Resource Manager, and Cloud PC to the EU Data Boundary Services…which now also includes storage of Professional Services Data.

Added Microsoft Defender for Business customers can apply Defender for Business to five devices.

Removed Microsoft 365 Information Protection and DLP – Student Use Benefit Add-on from Availability and Prerequisite Tables.

“Audio Services” renamed “PSTN Audio Services”

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Microsoft Financial Results: FY25 Q2


Microsoft have announced their Q2 results for FY25 and, not surprisingly at all, they’ve earned a LOT of money and are talking a lot about AI!

Overall results

Revenue was up 125 to $69.6 billion and Net Income was up 10% to $24.1 billion. The over-arching “Microsoft Cloud” segment increased 21% to $40.9 billion while the AI business was approx. $3.25 billion as it had an annual run rate of $13 billion, which is 175% up year on year.

Satya Nadella sad:

“We are innovating across our tech stack and helping customers unlock the full ROI of AI to capture the massive opportunity ahead,”

Productivity & Business Processes

Revenue = $24.9 billion, up 14%

This was driven by a 16% increase in M365 Commercial cloud revenue and 19% revenue growth for Dynamics 365.

Microsoft saw “better-than-expected performance in E5 and M365 Copilot, both of which drove Average Revenue Per User (ARPU).

Intelligent Cloud

Revenue = $25.5 billion, up 19%

31% growth in Azure (and other cloud services)

Earnings Call

  • There were 54 mentions of AI throughout the call.
  • Over 19.000 paying customers for Microsoft Fabric.
  • 30 million+ monthly active users (MAU) for Power BI, which is 40% up year on year.
  • 200,000 MAU for Azure AI Foundry.
  • Over 400,000 custom agents created with Copilot Studio across 160,000 orgs in the last 3 months.
  • Continued growth in the number of $100 million+ contracts for Azure and M365.

More changes to the partner channel?

CFO Amy Hood stated:

“Growth in our non-AI services was slightly lower than expected due to go-to-market execution challenges, particularly with our customers that we primarily reach through our scale motions, as we balance driving near-term non-AI consumption with AI growth.”

She described the “scale motion” as “customers we reach through partners and through more indirect methods of selling” and alluded to changes around where investments, marketing spend, and internal resources would be positioned to help drive sales through the partner channel.

Nadella also said “How do you really tweak the incentives go to market? At a time of platform shifts, you want to make sure you lean into even the new design wins, and you just don’t keep doing the stuff that you did in the previous generation.“

This could be partly behind Microsoft’s increasing drive to take more customers direct, that it gives them more control over what’s happening to drive organisations towards new platforms and products.

Check it out here https://www.microsoft.com/en-us/Investor/earnings/FY-2025-Q2/press-release-webcast

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Microsoft Product Terms: January 2025


As is always the case in January, it was a quiet Product Terms with mainly just re-arranging and updating:

Various Privacy & Security terms were consolidated and a new Software Products table to the “Exceptions to the DPA” section was added.

The Microsoft 365 Cross-tenant User Data Migration option was made available for certain pre-requisite A SKUs.

Microsoft Copilot re-branding

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Microsoft to retire Viva Goals in 2025


Microsoft have announced that Viva Goals, their OKR tool, will be retired on December 31st, 2025 and that all new feature development ceased on December 4th, 2024.

The reason for this is that “overall adoption and usage of Viva Goals across the Viva Suite customer base hasn’t grown. Microsoft has been unable to reach the scale and impact needed to continue further investment“. This also means that Microsoft aren’t replacing Goals with another OKR tool so customers need to look at 3rd-party solution. If you email GoalsDecom@microsoft.com, Microsoft will offer help in that regard. The full FAQ page is here.

Microsoft say:

  • Continued access: Viva Goals will continue to be available to our existing customers until December 31, 2025, to provide you with an opportunity to plan for its end-of-life transition to other OKR solutions if desired. We will continue to maintain Viva Goals’ availability, accessibility, and security of the product, and provide product support until its retirement.
  • No new functionality Viva Goals will no longer add any new features or functionality to the product. All current design change requests (DCRs) will be closed and no new DCRs will be accepted.
  • Data migration options: Viva Goals offers data export features via API, Excel, and PowerPoint, allowing users to move their data to a solution of their choice. we recommend that users export their data before December 31, 2025.

They are keen to point out that they are still committed to the rest of the Viva Suite and further development and investment will continue.

I was quite excited about the launch of Viva Goals as I think the OKR model makes a lot of sense for businesses and being able to integrate it into Teams etc. seemed powerful. I wonder whether the failure of Viva Goals is due to Microsoft’s technology or perhaps simply that the OKR methodology isn’t widespread enough for a dedicated tool to reach critical mass?

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Microsoft Product Terms: December 2024


Photo by Markus Winkler on Pexels.com

Not surprisingly, December was a quiet month.

On the 1st, Microsoft made some Azure updates:

  • Added language clarifying ACS is used for business purposes only. 
  • Added Workload Hub specific terms to the Microsoft Fabric terms. 
  • Updated pricing terms. 
  • Added Azure AI Speech custom text to speech avatar to Limited Access Services

and then on the 5th:

  • Updated “Azure Stack HCI” to “Azure Local”
  • Added Defender for Endpoint F1 and F2 to MCA Availability table
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Microsoft announce cloud price decrease for GBP


Microsoft announce a price DECREASE!

Yes, you read that right…

From February 1st, 2025 GBP pricing for “commercial cloud services” will drop by 5% to 6%.

Hopefully this will help reduce the impact of some of the recent pricing increases…

Unfortunately…those of you purchasing in Brazilian Real will see a 12% increase on both cloud and on-prem software.

https://news.microsoft.com/2024/12/03/local-currency-price-adjustments-for-microsofts-commercial-cloud/

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Microsoft Get Licensing Ready comes to an end


Photo by Markus Spiske on Pexels.com

Microsoft’s Get Licensing Ready (GLR) training platform is being shut down as of December 31st, 2024.

A mainstay of the Microsoft channel and pretty much every reseller salesperson’s introduction to the wonderful world of Microsoft licensing, GLR has been a trusty companion to many for decades. It has been around as long as I can remember (so at least 20 years) but it is now a casualty of Microsoft’s apparent lack of interest in licensing these days.

My post on LinkedIn has been one of the most liked, commented, and reposted for some time -showing the depth of affection for the platform…and also the concern that it’s going to get even more difficult for partners and customers to understand Microsoft licensing.

I haven’t done GLR for a few years but I plan to take them all again and get one last set of certificates for posterity’s sake.

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Microsoft price increases for 2025


More Microsoft price rises coming in 2025, following on from several over the last few years:

  • Dynamics 365 pricing increase by 9-17% in October 2024
  • Windows Server 2025 & System Center 2025 are 10% more expensive
  • “Price harmonisation” in 2023 raised prices for most products in several countries
  • Price increases on most products in Japan and South Korea on 2023
  • SQL Server 2022 was 10% more expensive
  • There were non-profit price increases in 2022
  • Various O365/M365 SKUs increased in March 2022 by up to 25%
  • The introduction of CSP NCE increase pay monthly prices by 20% in 2022

Monthly SKUs

All licenses on a pay-Monthly basis on CSP, MCA-E, and Buy Online will increase by 5% from April 1st, 2025. These include:

Microsoft 365
Office 365
Enterprise Mobility + Security
Windows 365
Dynamics 365
Power Platform (Inc. Power BI)

NOT included are Azure RIs, Savings Plans, Marketplace, Github.

Power BI

From April 1st, 2025 Power BI pricing is increasing by up to 40%:

Power BI Pro will be $14 (currently $9.99)
Power BI Premium Per User will be $24 (currently $20)

This won’t increase the price of E5.

Teams Phone

From April 1st, 2025 Teams Phone SKUs are increasing by up to 25%

Teams Phone Standard will be $10 (currently $8)
Teams Phone Frontline will be $5 (currently $4)

Calling plans are increasing too.

See the Microsoft post here – https://techcommunity.microsoft.com/blog/microsoft_365blog/flexible-billing-for-microsoft-365-copilot-pricing-updates-for-annual-subscripti/4288536

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Microsoft Enterprise Agreement changes in 2025


So the rumours were true…kind of…to some degree.

Microsoft have announced changes to the Enterprise Agreement but, not unusually, it’s still all a bit unclear.

“Beginning January 1, 2025, a small percentage of cloud Enterprise Agreements (EA) in direct markets will no longer be eligible for renewal under the existing EA framework”

What exactly is a “cloud EA”?
Is it where there is only Azure? Only Azure and M365?

Why not all cloud EAs?

How is that defined?

What will be the alternative?

“For enterprise customers, the Microsoft Customer Agreement for enterprise (MCA-E, the digital evolution of the traditional EA), will provide the optimal, streamlined solution.”

This is direct from Microsoft but is, in many ways, a “bigger” version of CSP rather than a slightly different EA.

So, “evolution” is an interesting choice. That implies a continuation whereas I’d probably us the word “replacement”…

Microsoft will begin notifying impacted customers in Jan 2025 that they cannot renew into the EA.

The post also says:

“Partners will continue to earn incentives when transacting EA renewals”

So they’re not all disappearing…at least not yet!

This marks yet another shift and yet another step towards more licensing business going direct to Microsoft.

To balance this out, they have also announced thst Copilot for M365/Sales/Service will be available on a monthly billing basis from December 1st…but will be 5% more expensive.

As well, all current monthly SKUs will have a 5% price increase from April 2025 and Power BI is increasing. I’ll do a separate post on that shortly.

It is interesting that the final section of the Microsoft post is titled “Microsoft is a partner-led company”…

If you have any questions, feel free to get in touch 😊

You can see the Microsoft post here:

https://partner.microsoft.com/en-gb/blog/article/accelerating-growth-through-partners-in-the-era-of-ai

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