You have probably noticed that Q1 is when renewal conversations ramp up. That’s no coincidence. Microsoft’s New Commerce Experience (NCE) model, introduced in 2022, shifted how and when customers renew Microsoft 365 contracts. For many small and medium-sized businesses (SMBs), those contracts are now synced to Q1.
This alignment creates a predictable window for renewal activity—but it’s about more than just contract updates. Microsoft uses Q1 as a strategic launchpad for pricing changes, product updates, and new features, making it the perfect time for you to deepen customer relationships and drive additional value.
Why Q1 drives renewals
The NCE model redefined the cadence of Microsoft 365 contracts, locking many SMBs into agreements aligned with its launch. Fast-forward to today, and Q1 has become the busiest renewal season for partners.
Looking ahead, the renewal surge is only growing. Microsoft predicts that in 2025, 45% of CSP seat renewals will happen between January and March. However, renewals aren’t the only consideration. Microsoft strategically uses Q1 to launch updates and initiatives that create opportunities for you to bring added value to your customers.
Key changes coming in 2025 include:
- Pricing Adjustments
- Lifecycle Milestones
- New Features
These updates align perfectly with renewal conversations, allowing you to educate your customers and showcase the benefits of adopting new tools and strategies. Follow along as we break down what’s new and what it means for you as an MSP.
Key 2025 Microsoft renewal updates for MSPs
Staying ahead of Microsoft’s renewal updates is essential for MSPs who want to ensure their customers’ success. With recent changes in pricing, licensing, product lifecycles, and more rolling out, understanding these shifts will help you drive smarter conversations and deliver greater value to your customers.
1. Pricing and licensing adjustments
Let’s start with the pricing and licensing changes that could impact how you position and package services to your customers:
- Annual Microsoft 365 plans billed monthly are increasing: Microsoft has raised prices for annual Microsoft 365 subscriptions paid monthly. Ensure you have a plan on how you’ll absorb, pass or enhance the value of your offerings, especially if renewals are coming up soon.
- Region-specific pricing updates: If you have customers in the UK or Brazil, Microsoft’s price changes for its commercial cloud services could affect them. Proactively building a plan on managing these pricing updates means you and your customers are set up for success.
- Direct purchase options for Copilot licenses: Certain CSP customers now have the option to buy Microsoft Copilot licenses directly with a credit card. This could accelerate Copilot discussions with your customers.
2. Product lifecycle updates
Keeping customers on supported platforms is crucial. Here are two lifecycle changes to watch:
- Exchange Server 2019 is entering extended end-of-support: By October, Exchange Server 2019 will move to its extended end-of-support phase. Now’s the time to discuss upgrade or migration plans with any customers still on the platform.
- OneDrive accounts will be archived after 90 days without a license: Starting in late January, specific OneDrive accounts unlicensed for more than 93 days and subject to a retention policy, retention period, or legal hold will be automatically archived with restricted access. Ensure you have a plan to manage your customers’ legacy data.
3. Exciting new features in Microsoft 365
Microsoft is always innovating, and the latest updates include:
- New agents in Microsoft 365: SharePoint agents and other AI-powered capabilities are rolling out, offering even more ways for your customers to work smarter. Highlight these updates as you prepare your customers to take advantage of AI.
Staying up to date on these updates ensures that you are ready to adapt, optimize your offerings, and strengthen your competitive edge
How MSPs can succeed
To make the most of Q1, engaging customers early and proactively is essential. Here’s how you can stay ahead:
- Engage Early: Start renewal conversations in December or early January.
- Explain Clearly: Be transparent about pricing or licensing changes.
- Showcase Value: Highlight features like Microsoft Copilot as part of a forward-looking IT strategy.
- Strengthen Trust: Address customer concerns before competitors do.
Failing to act can leave customers feeling undervalued and vulnerable to competing offers.
Let’s crush the renewal rush together
With so much shifting, this is the perfect time to focus on renewals to ensure your customers are ready for what’s next. Don’t let complacency lead to customer disengagement or open the door to competitors. With our Renewal Guide, you’ll stay ahead and highlight key priorities, such as data protection, to win customer trust and loyalty.
