Starting June 2025, Microsoft offers 3-year term subscriptions for Microsoft 365 E3 and Microsoft 365 E5 in the Microsoft Customer Agreement (MCA) through a partner (Cloud Solution Provider or CSP-partner). In this article we give you some specifics you need to know before making any decisions.
Only ‘E’
Under the MCA through a CSP partner customers can (now) choose between a 1-month, a 1-year and a 3-year subscription. However, the 3-year term subscription is only available for Microsoft 365 E3 and E5 and the Microsoft 365 E5 Security and Microsoft 365 E5 Compliance Suite. Not for Microsoft 365 Business Premium (choose 1-month or 1-year).
Price lock
The price is fixed during the term of the subscription. With a 1-month subscription, that is a month. With the 3-year subscriptions for Microsoft 365 E3 and E5, customers receive a fixed price (known as ‘price protection’) for three years. That’s a benefit. When adding license to the subscription, these new licenses receive the same price and invoicing is done pro-ratio.
Downside of the 3-year term is that during the term of the subscription, the number of licenses may not be reduced. The subscription also cannot be cancelled mid-term (for the CSP partner).
If you desire flexibility, you could choose (example) 80% 3-year subscription and 20% 1-month subscription. This provides price stability for the main part of the cloud spent, and still offer flexibility at a slightly higher price.
Payment
The payment term for the CSP partners is upfront for three years, or annual. In most cases the CSP partners will offer the customers the same payment options. 3-year term subscriptions for Microsoft 365 E3/E5 are not available with a monthly payment option.
Minimum purchase
The 3-year term subscriptions can only be purchased with a minimum purchase of 100 licenses for each product (SKU: Stock Keeping Unit). A mix of 60 Microsoft 365 E3 and 40 Microsoft 365 E5 does not fulfill the minimum requirements.
Teams
When renewing from a 1-month or 1-year term subscription into a 3-year term subscription, Microsoft allows customers to keep Teams included. Despite the fact that this is in contradiction with their own Terms of Use where they state that new subscription may only be purchased without Teams included.
For you?
If you feel that the three-year subscription term for Microsoft 365 E3 or Microsoft 365 E5 could benefit your organization, please do contact us. At Quexcel we provide Microsoft license consultancy, but we can also provide the subscriptions if you like.