When will Microsoft switch to consumption-based pricing?

GitHub Copilot starts June 1, with other products transitioning gradually over the near term.

Will per-user licensing be eliminated completely?

No, Microsoft will combine per-user licenses with additional usage-based fees.

How much do customers pay for Microsoft 365 Copilot?

Most pay 20-40% off the $30 retail price due to widespread discounting.

What is Microsoft's current cloud order backlog worth?

Microsoft's cloud backlog reached $627 billion in Q3 FY26.

Microsoft Consumption-Based Pricing Coming Soon for Licenses

Microsoft executives confirmed they're accelerating plans to implement consumption-based pricing across their product portfolio. Enterprise customers can expect traditional per-user licensing to expand with additional usage-based fees and per-agent charges.

GitHub Copilot will transition to this model beginning June 1st, while business application customers are already adopting usage credits at high rates. The shift represents a fundamental change in how organizations will budget for Microsoft software, moving beyond fixed per-seat costs to variable consumption models that could significantly impact total licensing expenses.

Read the full article at Directions on Microsoft →

This post is a paraphrased overview based on an article originally published by Directions on Microsoft.