The CSP Cost Cliff: Why 2025 NCE Changes Make Visibility Non-Negotiable, and How to Stay Ahead

Article Jan 12, 2026

Microsoft’s Cloud Solution Provider (CSP) programme has long been the go-to for organisations seeking flexibility and scalability.

However, recent changes under the New Commerce Experience (NCE) have reshaped the economics of CSP. Rising costs, complex renewal cycles, and limited visibility into licence usage mean that traditional “set and forget” approaches are no longer sustainable.

What Changed in 2025?

In April 2025, Microsoft introduced a 5% surcharge for annual commitments with monthly billing under NCE. This followed the December 2024 update, which added monthly billing for Copilot SKUs at a premium.

But the bigger cost exposure lies with Monthly Commit options. Designed for short-term projects, Monthly Commit pricing is around 20% higher than annual commit with upfront payment.

For example:
A 1,000-seat Microsoft 365 E3 tenant on Monthly Commit could pay almost £15,000 more per year compared to annual commit with upfront payment.

Copilot monthly billing adds further complexity and cost risk.

These changes were intended to encourage annual commitments, but they also create challenges for organisations that value flexibility.

Why visibility matters?

The surcharge is only part of the story. Many organisations lack insight into:

How licences are being used

Whether Azure workloads are optimised

Whether renewals are timed correctly

Inactive users, duplicate SKUs, and under-used Copilot licences often go unnoticed. Over-provisioned virtual machines and missed opportunities for Azure Hybrid Benefit can inflate costs. Late renewals can erode discounts and even compromise compliance.

Without proactive optimisation, CSP costs spiral and missed savings compound over time.

Five Ways to Optimise CSP Costs

To regain control, organisations should focus on five key strategies:

Commit annually where possible to lock in lower rates and avoid surcharges.

Right-size Microsoft 365 licences to reclaim unused seats and rationalise SKUs.

Apply Azure Hybrid Benefit correctly to leverage existing Windows/SQL licences for cloud workloads.

Use Reserved Instances and Savings Plans to optimise predictable Azure consumption.

Govern Copilot adoption by monitoring usage and reassigning licences dynamically.

Planning Ahead: Making Changes for 2026

Looking forward, 2026 is expected to bring further refinements to Microsoft’s CSP and NCE models:

Expanded Copilot licensing tiers will require governance and adoption strategies.

Security and compliance bundles may become more prominent, making it essential to review E5 and add-on options.

Potential adjustments to Azure pricing models could impact hybrid and reserved capacity planning.

The best approach is to act now:

Audit your current CSP commitments

Build a governance framework for licence allocation and cost tracking

Adopt FinOps principles for continuous optimisation

Staying informed on Microsoft’s roadmap will help you align budgets and strategy early, avoiding surprises and ensuring agility.

In Trustmarque's opinion: How can we help?

With Microsoft’s 2025 NCE changes driving up costs for some CSP billing options, organisations need visibility and control to avoid unnecessary spend. Trustmarque can help by:

Delivering PRISM, our advanced platform that provides real-time dashboards for Microsoft 365, Azure, and Copilot usage.

Identifying inactive licences, optimising workloads, and applying cost-saving measures like Azure Hybrid Benefit and Reserved Instances.

Offering expert Microsoft licensing consultancy to transition to annual commitments, rationalise SKUs, and implement governance frameworks that prevent renewal risks.

Providing strategic planning for 2026 and educational resources such as our PRISM for CSP webinars, ensuring customers reduce costs today and future-proof their Microsoft investment.

Enhance Security Visibility with Prism for Security: Our PRISM platform now includes dedicated security optimisation features. Prism for Security provides in-depth monitoring, alerting, and reporting on your Microsoft 365 and Azure environments, helping you identify vulnerabilities, track compliance, and proactively respond to security threats. By integrating security insights into your cost and licence management dashboards, organisations can strengthen their security posture while maintaining cost efficiency.