11:52 AM EDT, 08/20/2025 (MT Newswires) -- Microsoft ( MSFT ) is standardizing its enterprise agreement pricing, which will effectively raise costs for many customers, UBS Securities said in a report emailed Wednesday.

The technology company is implementing a new pricing and licensing model that partners describe as "very aggressive," a move that will effectively increase costs for many of the company's enterprise clients, UBS said.

The change, starting Nov. 1, standardizes pricing across most EA contract tiers and eliminates many volume-based discounts, except for Microsoft's ( MSFT ) largest global accounts. The shift applies to online services including Azure, Microsoft ( MSFT ) 365, and Dynamics 365, covering about 55% of the company's revenue. On-premise software, government and education customers are exempt, the report said.

Microsoft's ( MSFT ) partners estimate the price increases will range from 3% to 14%, depending on the customer base. Analysts at UBS said the adjustments are likely to boost Microsoft's ( MSFT ) profitability by simplifying its complex pricing structure and pushing more customers and partners toward cloud service provider contracts, UBS said.

The new model puts some pressure on partner margins and could prompt some customers to switch to different contract types. However, UBS believes the company's valuation remains reasonable, given its strong position in the artificial intelligence market, according to the report.

UBS maintained a buy rating on Microsoft ( MSFT ) with a price target of $650.

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