Microsoft CSP Pricing Changes Effective 1 October 2026

Microsoft is introducing changes to its Cloud Solution Provider (CSP) program pricing, effective 1 October 2026. This article summarises what's changing, which products are affected, and what it means for CSPs.

1. Reduced Partner Margin on Select Products

From 1 October Microsoft is reducing partner discounts by 5% on a number of legacy and standalone products. Microsoft's recommended retail price (RRP) for these products is not changing. What's changing is the margin Microsoft offers partners - decreasing by approximately 5% on the products listed below, applying to new and renewing subscriptions from that date.

Affected products:

• Office 365 E1
• Office 365 E3
• OneDrive Extra Storage
• SharePoint
• Exchange Online
• Microsoft 365 Apps for Business
• Microsoft 365 Apps for Enterprise

What this means for you: This is a change to your cost that will be reflected on your next invoice.

Recommendation: If you have renewals coming up, it's worth reviewing your broader Microsoft 365 setup with us. There may be opportunities to modernise or consolidate your licensing that help manage overall cost.

2. Customer Price Increase: 5% Uplift on Annual-Term Subscriptions Billed Monthly

From 1 October 2026, Microsoft is applying a 5% cost-of-capital uplift to CSP software subscriptions that have an annual-term commitment but are billed monthly. Unlike the margin change in section 1, this is a direct increase to the customer's subscription price, not a change to partner margin.

Affected products:

• SQL Server
• Windows Server
• Client Access Licences
• System Center

Timing:

• For existing subscriptions in this category, the uplift applies at your next renewal on or after 1 October 2026
• Annual billing (paid upfront) and month-to-month subscriptions are not affected by this change

Recommendation: If you currently pay for an annual-term subscription monthly, it's worth reviewing your billing options with us ahead of renewal. Switching to annual billing, where suitable, avoids this uplift.

Further reading:

Microsoft Partner Announcement: CSP software pricing update effective 1 October 2026