Microsoft price increase for on-premises servers July 2025
Microsoft has confirmed a significant price increase for its on-premises server licenses effective July 2025. This adjustment will impact organizations that rely on traditional licensing models for products such as Windows Server and SQL Server.
This consists of a 10% increase for on-premises servers, e.g., for SharePoint and Exchange server. In addition to this, and for those customers still using Core CAL and Enterprise CAL Suites, there will be 15% – 20% increase.
As Microsoft continues its shift toward cloud-first strategies, this update underscores the company’s intent to align on-premises pricing more closely with cloud services. Businesses should begin preparing now to avoid unexpected budgeting challenges next year.
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Details of the Microsoft Price Increase
FFrom July 1, 2025, Microsoft will:
- Increase prices for on-premises server licenses, including Windows Server, SQL Server, and Office Server products.
- Apply pricing changes globally, with percentage increases varying by licensing model.
- Apply the new pricing to new purchases and renewals after the effective date.
This means organisations budgeting for license renewals after July 2025 should expect higher costs across most traditional on-premises server SKUs due to the Microsoft price increase 2025.
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Why Is Microsoft Increasing Prices in 2025?
The Microsoft price increase is part of an ongoing strategy to encourage customers to consider cloud-based services such as Azure and Microsoft 365. By narrowing the cost gap between cloud and on-premises deployment models, Microsoft is positioning the cloud as the more cost-effective long-term choice.
While some organizations may continue to require on-premises deployments for compliance or operational reasons, the rising cost of traditional licensing is likely to influence IT roadmaps.
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Who Will Be Affected by the Microsoft Price Increase
The July 2025 price changes will directly impact:
- Enterprises running on-premises Microsoft servers (e.g., Windows Server, SQL Server, Exchange Server).
- Organizations with Software Assurance agreements renewing after July 2025.
- Businesses relying on perpetual license purchases rather than cloud subscription models.
If your business has a hybrid IT environment — part on-premises, part cloud — this increase may accelerate the justification for moving more workloads into Azure or exploring Microsoft CSP subscription models.
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Preparing for the 2025 Microsoft Price Increase
To minimize disruption, IT and procurement teams should take proactive steps:
- Review renewal dates – Check when your current Microsoft licenses expire and ensure you understand whether the new pricing will apply.
- Assess workload placement – Determine whether workloads currently run on-premises should remain there or move to the cloud.
- Revisit budgeting and forecasting – Factor the Microsoft price increase into your financial planning for 2025–2026.
- Engage your licensing partner – A trusted Microsoft partner can help find the most cost-effective approach, whether by optimizing existing agreements or planning a cloud migration.
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What This Means for Your Business
lthough the Microsoft price increase 2025 will bring challenges, it also gives organisations a chance to re-evaluate IT strategy. For those remaining on-premises, costs should be factored in proactively. For those exploring Microsoft Azure and cloud services, the price hike further strengthens the case for accelerating transformation.
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Conclusion
The July 2025 Microsoft price increase for on-premises server licenses is an important development for every business running Microsoft infrastructure. Careful planning now will help avoid unnecessary expense later — whether that means renewing early, right-sizing your existing agreements, or accelerating your move toward cloud services.
Staying proactive is the best way to manage the impact of these changes and position your organization for long-term value.
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