Microsoft EA Renewal Checklist (2025)

Microsoft EA Renewal Checklist

Renewing a Microsoft Enterprise Agreement (EA) in 2025 is a high-stakes moment for any large organization. An EA renewal locks in your software and cloud spend for the next three years, so the decisions you make now will directly impact your IT budget and flexibility until at least 2028.

Microsoft is pushing cloud-first, subscription-heavy deals – think upgrades to Microsoft 365 E5 plans, committing to Azure consumption, adopting new AI add-ons like Microsoft 365 Copilot, and even transitioning customers to the newer Microsoft Customer Agreement (MCA-E). All of these can drive costs up or limit your flexibility if you’re not prepared.

The pressure is on: Microsoft’s sales teams often come to the table with aggressive offers to bundle more services and lock in revenue. If you walk into negotiations unprepared, you could agree to unnecessary products or onerous terms and end up overspending for three years.

Poor preparation for an EA renewal often means paying for licenses you don’t use, agreeing to steep Microsoft EA discounts that still aren’t the best you could get, or getting stuck with contract terms that don’t allow adjustments if your business changes.

The good news is that with the right strategy and EA renewal checklist, you can take control of the process.

By following the steps below, procurement leaders, CIOs, CFOs, IT asset managers, and licensing managers can craft a renewal plan that reduces Microsoft costs, secures flexible terms, and aligns with your business strategy – all while protecting against compliance risks.

In 2025, a savvy approach is more important than ever, given the new AI-driven licensing trends and Microsoft’s cloud focus. Let’s dive into the step-by-step checklist to ensure you renew your EA on your terms, not Microsoft’s.

Step 1: Build Your Baseline

The first step in any EA renewal strategy is to build a clear baseline of your current usage and future needs. Essentially, you need to know exactly what you have, what you actually use, and what you’ll need going forward. This baseline will serve as your foundation for negotiating and determining what to keep or discard.

Here’s how to build it:

• Audit your current licenses and usage: Do an internal license audit across all Microsoft products in your EA. Inventory every license and subscription (Office 365 seats, Windows, Azure services, Dynamics, etc.) and check how they’re being used. Often, companies discover shelfware – licenses purchased but barely or never used. For example, you might find you have 500 Office 365 E5 licenses assigned but only 300 users actively using the E5-only features, or you might be paying for Power BI Pro for everyone when only a few analysts need it. Identifying unused or underutilized licenses is crucial to effective license optimization. If you don’t have a clear view, use tools like the Microsoft 365 admin center reports or a software asset management tool to get usage data.
• Assess your actual needs: Once you know what you have, determine what you truly need moving forward. This requires input from various stakeholders. Are there major changes on the horizon that impact license needs? For instance, consider organizational changes such as mergers, acquisitions, or divestitures that may increase or decrease your user count. Also factor in planned cloud adoption or IT strategy shifts – e.g., if you plan to move more workloads to Azure or SaaS services, or conversely, if you might retire certain applications. Don’t just renew what you had before; align licenses with the business roadmap. If some on-premises servers are being phased out in favor of cloud services, you might not need to renew expensive Software Assurance on those. If a big expansion is planned in a region, you might need more licenses of certain types.
• Identify upgrade or downgrade opportunities: Look at each product or service and decide if it’s the right fit. Some users might be candidates to downgrade to a lower-cost license edition (for example, from M365 E5 to E3, or E3 to F3 if they have lighter needs) to save money. Conversely, there may be new tools that are valuable to add, but make sure they’re justified. Microsoft will try to sell you on the value of the highest bundles (E5, advanced security add-ons, Copilot AI features, etc.). Still, you should only plan to include what provides real value to your organization. Part of building your baseline is knowing which features your users actually use and which they don’t.

By the end of Step 1, you should have a confirmed baseline: a list or spreadsheet of all current Microsoft licenses, their utilization rates, and a projection of what you need for the next 1-3 years.

This data-driven baseline prevents you from blindly renewing everything as-is. Instead, you can target areas to cut out the fat (drop unused licenses, remove redundant products) and areas to potentially invest (maybe security or compliance features that you truly need).

It also ensures you won’t forget to include something important. For example, if you have a bunch of external contractors using Office 365 via your tenant, make sure they’re accounted for so you remain compliant.

A solid baseline is your ammunition for the next steps, giving you hard facts to support your negotiation positions.

Step 2: Evaluate Alternatives

With your baseline in hand, it’s time to evaluate all the options for fulfilling those needs. Microsoft will assume you’ll simply renew your EA, but in 2025, you actually have multiple licensing routes to consider.

This step involves comparing your EA renewal with potential alternatives, such as the Cloud Solution Provider (CSP) program or the Microsoft Customer Agreement for Enterprises (MCA-E), as well as various mix-and-match scenarios.

The goal is to model various cost scenarios and explore the possibilities of alternatives in your negotiations.

Start by understanding the status quo (EA renewal) scenario. Under a traditional EA, you commit to a set of licenses for 3 years, often with upfront pricing and the ability to true-up annually if you add more licenses. EAs usually offer volume discounts – the more you commit to enterprise-wide, the bigger the discount per license.

You also get Software Assurance benefits included for on-premises licenses. However, EAs are inflexible if you need to reduce licenses mid-term (no easy “true-down” until the end of the 3 years, unless you negotiate special terms). So, ask: does a standard EA still make sense for us, or would a different model serve us better?

Compare EA vs. CSP vs. MCA-E: The CSP program allows you to buy Microsoft subscriptions (like Microsoft 365, Azure, etc.) through a reseller on a monthly or annual term, with no long multi-year commitment. CSP can offer more flexibility – for example, you can decrease license counts if your workforce shrinks, or ramp up and down Azure services and pay only for what you use.

The trade-off is that per-license costs in CSP are often higher than those of an EA (less volume discount), and CSP relies on a partner for support and billing. It can be a good option for specific needs or as a short-term safety net.

For instance, if your EA renewal negotiations don’t go well, one fallback strategy could be letting the EA lapse and shifting to CSP on a month-to-month basis for a while.

This isn’t ideal long-term because of higher costs, but it’s better than signing a bad 3-year deal. Knowing you have CSP as an option gives you leverage.

The Microsoft Customer Agreement (MCA) is Microsoft’s newer contract model, which the company is heavily encouraging (and in some cases, forcing) enterprises to adopt. An MCA-E is essentially the enterprise flavor of this agreement. It moves away from the old EA program structure.

Under an MCA, everything is subscription-based and managed via Microsoft’s commerce platform. One key difference: Software Assurance (SA) as a traditional concept is no longer applicable.

Under MCA, you don’t buy perpetual licenses + SA; instead, you buy subscriptions that include upgrade rights inherently. This can reduce flexibility for companies that prefer owning licenses.

Additionally, some customers and analysts have observed that MCA contracts often include changes in billing and reporting – for instance, more fragmented invoices and new billing terms that may complicate chargebacks internally.

Another big consideration is true-up/true-down: the EA traditionally allowed a structured annual true-up (and you could true-down at renewal time).

In an MCA world, you commit to certain subscription counts and Azure spend, and reducing those commitments mid-term might be difficult or require penalties. Essentially, Microsoft is shifting more risk to the customer under the MCA by locking in your commitment.

Given these differences, model out the costs and implications of an EA renewal vs. moving to an MCA-E vs. using CSP. For example, if you renewed your EA for 3 years at the quantities you need, what would the 3-year spend be?

Then compare if instead you shifted to CSP entirely for 3 years – perhaps the annual spend is higher, but you could scale down if needed (what happens if you need 20% fewer licenses in year 2? In EA, you’d still pay for them; in CSP, you wouldn’t).

Also consider a hybrid approach: some organizations might keep an EA for core products (such as Office 365 for all employees) for stability and discount reasons, but use CSP for certain smaller workloads or new projects, or for Azure to avoid overcommitting.

It’s not an all-or-nothing choice; you might negotiate a smaller EA and plan to handle overflow or variable needs via CSP.

Additionally, evaluate competing solutions outside Microsoft.

While it’s likely you’ll stay with Microsoft for most services, identifying areas where you have viable alternatives strengthens your hand (we’ll use this as a negotiation lever in Step 3).

For example, if Microsoft is pushing you to upgrade everyone to M365 E5 with a pricey security bundle, note that you could opt for third-party security tools or stick with E3 and another vendor’s solution for some capabilities.

Or if Azure cloud spend is on the table, get comparative pricing from AWS or Google Cloud for similar usage to see if Azure’s EA discounts truly save you money.

Finally, be aware of new products and bundles being pushed. Microsoft’s sales pitch during renewals in 2025 often includes shiny new AI-driven products. The big one is Microsoft 365 Copilot, an AI assistant for Office apps, which comes at a hefty additional cost (e.g., $30 per user/month list price).

They might offer to bundle Copilot or require a commitment to Azure OpenAI. Treat these offers with healthy skepticism. Ask yourself: do we really need Copilot for all users now, or can we run a pilot program first?

Remember that just because Microsoft is excited about a product doesn’t mean it’s a must-have for you. It might be better to take a “wait and see” approach on AI add-ons, or agree to a small trial deployment, rather than a costly enterprise-wide commitment from day one. In your cost scenarios, include and exclude these extras to see the impact.

By the end of Step 2, you should have a clear view of what sticking with an EA will cost and entail versus the realistic alternatives. You’ll use this information in negotiations – the fact that you could go elsewhere (or at least alter your purchasing route) is one of your strongest bargaining chips.

The exercise also ensures that renewing the EA is truly the best choice for your situation; if it’s not, you may decide to switch to an MCA or CSP model that better suits your organization’s needs.

Either way, the key is that you evaluate alternatives before you negotiate, so Microsoft knows you have done your homework and won’t blindly accept their first renewal quote.

Step 3: Define Your Negotiation Levers

Armed with your baseline and a sense of alternatives, the next step is to define your negotiation levers – the points of leverage you can use to get better pricing and terms. An EA renewal is a big Microsoft contract negotiation, so you want as many cards in your hand as possible. Think strategically about what Microsoft values and what you can use as pressure points.

Here are several key levers to consider:

• Enterprise-wide coverage vs. partial: Microsoft gives the best pricing when you commit to the broad adoption of its products. For instance, an EA often requires covering all “qualified” users with certain core products. If you’re willing to standardize company-wide on something (like Office 365 for everyone, or Windows 11 Enterprise for all PCs), that’s a lever – you can say you’ll do it in exchange for a deeper discount or other concessions. On the flip side, if not all parts of your business actually need a certain product, be prepared to push back. You can threaten to exclude a product or a subset of users from the agreement if the terms aren’t good. Microsoft would rather keep the footprint, even at a discount, than lose it. For example, “We might only renew 70% of our Office 365 licenses under the EA and put the rest on cheaper alternatives or none at all, unless we see a better price.”
• Volume licensing strategy: Volume is power in licensing. Analyze your numbers – are you close to a higher discount band if you add a few more licenses to the deal? Or conversely, are you willing to reduce volume if pricing isn’t favorable? Use this tactically. If you’re a large enterprise, Microsoft obviously wants to keep (and grow) your account. Make it clear that you’re willing to do a sizeable deal, but only for the right terms. Negotiating Microsoft EA discounts often comes down to how big your commitment is. For example, “We can consider increasing our Azure commitment by 20%, but we’ll need an extra 5% off the unit price to justify that.” Also, leverage your total Microsoft spend across all products – treat the negotiation as a holistic approach. Maybe you’re also buying Microsoft Surface devices or consulting services; bring those into the discussion if applicable, as part of the overall relationship.
• Competitive alternatives on the table: One of the strongest levers is the credible threat of alternatives. Even if you ultimately plan to stay with Microsoft, letting them know you have options puts pressure on them to improve their offer. Bring up the fact that you have evaluated or are in talks with competitors where relevant. For instance, if Microsoft pushes a big Azure consumption deal, mention that you have considered AWS or Google Cloud and have cost estimates in hand – Microsoft will know they might lose cloud workload share. It could respond with better Azure rates or credits. If the negotiation is about Office 365/M365, subtly remind them that Google Workspace or other productivity tools exist and you’re not entirely locked in. Or for Teams and telephony, note that Zoom or Cisco Webex are alternatives. You don’t have to outright threaten to leave Microsoft (which may not be credible for core services), but signal that you’re not afraid to pick the best value solution. Microsoft’s worst fear is losing portions of its spend to a competitor, so use that to your advantage.
• Timing and Microsoft’s fiscal cycle: Timing can be a lever. Microsoft, like many vendors, has quarterly and annual sales targets. Their fiscal year ends on June 30, and often Q4 (April-June) is a frenzy of deal-making to hit revenue goals. Suppose your EA expiration is naturally aligned with Microsoft’s end-of-quarter or end-of-year. In that case, you’re in a great position to squeeze out extra discounts – the sales team will be highly motivated to close your renewal to count towards their quota. Even if your renewal date is off-cycle, you can still use timing. Some companies negotiate a slight extension of the old agreement or otherwise time the final signing to coincide with Microsoft’s fiscal year-end to maximize leverage. Alternatively, initiate the process such that the negotiation phase hits around Microsoft’s quarter-end; the closer it is to a deadline for them, the more likely they’ll concede to your demands to book the deal. Leverage Microsoft’s calendar as much as your own. That might mean starting early (which you should be doing anyway) and pacing the negotiation strategically. Don’t let them rush you if it’s not in your favor – often Microsoft reps create artificial urgency (“we need a signed deal by this Friday to give you X discount”) when in reality, if you hold off a bit longer, they’ll come back with the same or even better offer.
• Software Assurance value and renewal: If you still use on-premises licenses with Software Assurance, consider this a valuable lever as well. Microsoft’s shift to cloud subscriptions has de-emphasized SA, but for you, it might still be important. Make sure Microsoft knows you value certain SA benefits (like new version rights, training vouchers, support incidents, license mobility) and that the renewal should preserve those benefits, or you expect compensation elsewhere if moving to a model without SA. For example, suppose you lose traditional SA under an MCA. In that case, you might negotiate for equivalent training credits or ensure that you have rights to the latest on-premises version available as of your contract end. On the flip side, if you feel SA isn’t providing value (maybe you’re fully cloud, so paying for SA on, say, Windows Server licenses is pointless), use that to negotiate cost down – “We will drop SA on these products (or even drop the products entirely) unless we see a better offer,” which pressures Microsoft because they want to keep you on SA (it’s guaranteed revenue and keeps you in their ecosystem).
• Understand Microsoft’s new product push (and use it): Microsoft is very eager to sell new services like Copilot and security/compliance add-ons. This eagerness can be a lever for you. For example, you might say, “We’ll consider adding 500 Copilot licenses as part of this renewal, but in return we want a 15% discount on them and a price lock for the term,” or “We might upgrade a segment of our users to E5 security, but only if we get a bigger discount on the core Office 365 licenses.” Essentially, if you even entertain their upsell, ask for something back. They might have promotional discounts or funds (sometimes Microsoft provides adoption funds or free training to sweeten big deals). Don’t give in to upsells without using them as bargaining chips.
• Set walk-away points and alternatives: Internally, define what your “no deal” scenario is and be willing to invoke it. Your leverage is strongest if Microsoft truly believes you will walk away or significantly change your purchasing if the terms aren’t acceptable. For instance, decide ahead: if the discount doesn’t reach X%, or if Microsoft won’t include a certain flexibility clause, are you prepared to say “no” and either extend the current agreement a bit longer, or switch some things to CSP or another vendor? One plan could be, “If we can’t reach a deal, we will let the EA lapse and use CSP month-to-month for a while (or even go without certain products).” It sounds extreme, but having a contingency like that and showing Microsoft you mean it can prevent them from stonewalling. It’s essentially your last-resort lever – and you might not need to use it, but you should know what it is. Convey politely but firmly that you have a Plan B, so signing a subpar EA is not your only option.

By defining and articulating these levers, you prepare yourself to steer the negotiation. When you meet with Microsoft’s representatives, you will be able to say, “Here’s what we need and why,” rather than simply reacting to their offer. You turn the renewal into a two-way conversation where Microsoft has to compete for your business (even if they are the incumbent).

Remember, everything is negotiable – not just the price per license, but things like payment terms, contract length, the inclusion of certain terms, support fees, etc.

In the next steps, we’ll discuss compliance and true-ups, which are additional aspects to consider when negotiating.

However, overall, clearly defining your negotiation levers ensures that you approach the Microsoft EA renewal with confidence and strategy, rather than being led by Microsoft’s agenda.

Step 4: Strengthen Your Compliance Posture

Before you finalize any deal, make sure your licensing compliance house is in order. Microsoft can and will use compliance risks as leverage during renewal discussions, and the last thing you want is to be on the back foot due to a license shortfall or audit threat.

A strong compliance posture means you’ve identified and addressed any gaps in licensing, and you’ve covered your bases about who and what is included in your environment. It also means negotiating your renewal in a way that protects you from compliance surprises in the future.

Here’s what to focus on:

• Include all users and usage scenarios in your review: Ensure that contractors, partners, and external users who access your Microsoft services are properly licensed or accounted for. For example, if external contractors have company logins to use Office 365 or read email, they generally need the same license as a regular employee would. Sometimes, organizations overlook non-employees in their license counts, which can lead to compliance issues. Similarly, if you have external guest users in Teams/SharePoint or customers accessing Power Apps portals, review how those are licensed (some external use is free, some require extra licensing). Covering these in your renewal discussions (or adjusting your usage) will prevent Microsoft from pointing them out later as non-compliance.
• Perform an internal compliance audit and fix issues: As part of your baseline (Step 1), you should have run an internal license audit. If you found any compliance gaps – for instance, more users using a product than you have licenses for, or usage of a feature beyond your entitlement – address them proactively before renewal. It’s far better for you to quietly true-up or adjust now than to have Microsoft’s audit team find it. Suppose you enter negotiations and Microsoft is aware (via their telemetry or previous reviews) that you’re under-licensed somewhere. In that case, they might push for an immediate purchase or use it to pressure you (“We noticed you have 50 extra SQL Server installations unlicensed – we need to resolve that as part of this renewal”). By fixing issues (buying needed licenses or ceasing unlicensed usage) ahead of time, you remove that ammunition. You can then confidently say you are fully compliant going into the renewal, shifting the conversation to future value rather than past mistakes. Also, document your compliance; showing Microsoft that you track licenses diligently can make them less inclined to pursue a formal audit.
• Negotiate audit terms and protections: In your EA or MCA contract, there will be clauses about Microsoft’s right to audit your usage. During renewal, see if you can negotiate these terms to be more customer-friendly. For example, you might request a longer notice period before an audit, a limitation on how frequently audits can occur, or clarification on resolving findings (e.g., you get a window to purchase any shortfall at standard pricing without penalties, rather than retroactive fines). Microsoft may not agree to much here (they typically keep audit rights fairly open). Still, it’s worth trying to at least get clarity or commitments that the preferred path is self-reporting (you doing your own true-ups) rather than surprise audits. Even if the contract language doesn’t budge, demonstrating that you care about compliance can influence how Microsoft approaches you.
• Understand downgrade rights and license portability: Compliance isn’t just about counting users; it’s also about using software correctly. “Downgrade rights” means the ability to use older versions of software than the one you’re licensed for. If you have Software Assurance or subscriptions, you usually have this right – for example, you have Windows 11 E3 licensed but still run some Windows 10 for compatibility. Make sure your agreement retains those rights if you need them, especially if you’re locked into some legacy systems. License portability (or license mobility) refers to moving licenses to the cloud or across servers. For instance, Windows Server or SQL Server licenses with SA can be moved into Azure or AWS (called Azure Hybrid Benefit or License Mobility). Ensure you maintain these flexibilities if they matter to your operations. If you’re moving to an MCA and pure subscriptions, check if any on-premises use rights need to be preserved. By clarifying these in the contract, you avoid compliance issues where you thought you were allowed to do something, but Microsoft later says you weren’t.
• Keep records and SAM practices sharp: Maintain an ongoing Software Asset Management (SAM) practice internally. This isn’t a one-time task; even after renewal, continue to track new users, deployments, and license assignments regularly. This will make your yearly true-up smoother and help catch any compliance drift. It also puts you in a position of strength if Microsoft ever comes knocking to review license compliance – you can confidently provide data or demonstrate control.

Strengthening your compliance posture is partly about risk mitigation and partly about positioning for negotiation.

A company with a sloppy licensing footprint is an easy target for Microsoft’s audit and sales teams – they know you’ll have to buy more licenses to cure compliance issues, possibly in a panic.

In contrast, if you show up well-prepared, compliant, and knowledgeable about your entitlements, Microsoft will focus the discussion on the future (where you can negotiate on your terms) rather than past compliance (where you’d have little choice but to spend more).

As a bonus, being on top of compliance internally also means you’re less likely to over-buy “just in case” licenses out of fear – you’ll buy only what you need and have confidence in that decision.

Step 5: Optimize the True-Up Process

One unique aspect of an Enterprise Agreement is the annual true-up – the process where you report any increases in usage (like additional licenses or extra Azure consumption) and pay for them retroactively each year. If not managed well, true-ups can lead to unpleasant surprise bills or rushed purchases.

The renewal negotiation is the time to optimize how true-ups will work in the next term. By negotiating favorable true-up terms, you can control costs and avoid headaches down the road.

Here’s what to consider:

• Clarify timing and grace periods: Discuss with Microsoft how and when true-ups should be reported and paid. In a standard EA, if you added any licenses during the year, you typically report them at the anniversary and pay for a full year’s worth for each added license (regardless of when they were added). That can feel like a penalty if you, say, hired a batch of employees in month 10 – you still pay 12 months for them at true-up. You might negotiate a grace period for license additions – for example, any licenses added in the last 60 days of the year can be reported but not charged until the next year, or perhaps they’re prorated. Microsoft might not readily agree to pro-rating (since the EA model is simpler), but if your usage is highly fluid, it’s worth asking. At the very least, make sure you understand the cutoff dates for counting new usage so you can plan (maybe delay a deployment by a month so it falls into the next year’s count, etc., if that’s allowed).
• Negotiate cost caps or fixed pricing for true-ups: Another potential pain point is if Microsoft raises prices during your term – you don’t want those increases to apply fully to your true-ups. Try to lock in the unit pricing for any additional licenses you add later. For instance, if today’s price per user for Office 365 E3 is $X under your EA, negotiate that any true-up during the 3-year term will also be at $X (or at least with a cap like “no more than 5% increase per year”). This protects you from list price hikes. Similarly, you could negotiate a cap on the annual increase in your total cost due to true-up. Maybe something like, “if our user count grows, we won’t be charged for more than 10% growth per year, regardless of actual.” Microsoft might not agree to a hard cap easily, but even a soft commitment or at least planning for various growth scenarios in writing is helpful. The idea is to prevent a scenario where a department suddenly onboards 1,000 new users and your budget is blown out due to true-up costs you didn’t foresee.
• Simplify and make reporting favorable: If you can, incorporate terms that simplify the true-up reporting. For example, if you have seasonal fluctuations in user count (retail, temp workers, etc.), maybe negotiate the ability to report an average number of users over the year rather than the peak. Or you could arrange to true-up twice a year in smaller increments, if that makes budgeting easier. Some organizations negotiate a mid-term baseline adjustment if needed, rather than big surprises at the end. Work with your Microsoft rep to see what’s possible. Also, ensure that the process for true-up is clearly defined: how do you report, by when, and what happens if you accidentally over-deploy? A friendly true-up clause might allow you to correct an over-deployment quickly without immediate charge if fixed within 30 days, for instance.
• Plan for true-down at renewal or mid-term: Microsoft typically doesn’t allow reducing license counts during the EA term (except at the very end), but as part of negotiating your new EA, you can push for some flexibility. Perhaps you include a clause that if your employee count drops by, say, over 10%, you can reduce a corresponding percentage of licenses at the next anniversary. Or at minimum, make sure you have the right to adjust quantities downward at the 3-year renewal without penalties on the next cycle. This isn’t exactly a true-up (it’s a true-down), but discussing it in the context of flexibility is important. It ties into not overpaying for unused capacity. In 2025, many enterprises are concerned about being stuck with too many licenses if the economy fluctuates or if they restructure, so they try to bake in options to not pay for what they no longer need.
• Avoid surprise Azure bills: If your EA includes Azure consumption (which many do via an Azure commitment or an Azure plan), treat Azure growth carefully. True-up in Azure can mean if you consume beyond your prepaid amount, you pay overage. Negotiate how overages are priced (maybe at the same discounted rate rather than full pay-as-you-go rate) or see if Microsoft will agree to alert you before you blow past a threshold. Some companies set up a quarterly review with Microsoft to discuss Azure consumption, ensuring dialogue and avoiding a one-time, gigantic bill at year-end. Essentially, bring Azure into the conversation of “no surprises” – you want insight and perhaps some leeway if you’re, say, 5% over the annual commit (maybe Microsoft could forgive small overages or roll them into an adjusted commit).

Optimizing the volume true-up process involves ensuring that the mechanics of adding licenses or usage work in your favor as much as possible. You can’t avoid paying for what you genuinely use, but you can avoid overpaying due to timing or technicalities.

By getting some guarantees in the EA renewal on pricing and process, you turn true-ups from a dreaded unknown into a planned activity.

This will save you from scrambling for budget approvals for unplanned true-up costs and help avoid internal finger-pointing about “who deployed those extra licenses without telling us.”

Instead, you’ll have a clear, fair system for growth that you and Microsoft have agreed upon, and that predictability is worth a lot.

Step 6: Set Your Non-Negotiables

Before you enter the final stretch of negotiations, it’s critical to establish your non-negotiables – the terms or conditions that you absolutely must have to sign the deal, and those you absolutely won’t accept.

Think of this as drawing your red lines. Knowing these in advance and getting internal alignment on them will prevent you from conceding something under pressure that you’ll regret later.

It also helps you communicate clearly to Microsoft what your deal-breakers are (in a professional way).

Here are some areas to consider for non-negotiables:

• Flexibility for organizational changes (M&A or divestiture): If your company anticipates any mergers, acquisitions, or divestitures in the next three years (and let’s face it, in today’s climate that’s always a possibility), bake flexibility into the contract. A non-negotiable might be a clause that allows you to transfer licenses to an affiliate or a buyer in case of a divestiture, or conversely, to bring a newly acquired entity under your EA at a pre-negotiated rate. Also consider headcount flexibility: if you divest a business unit, you don’t want to keep paying for its licenses after it’s sold – you’d want to drop those licenses or have the buyer take them over. Ensure Microsoft’s agreement allows for the assignment or reduction without a penalty. Make it clear that you won’t sign without reasonable M&A terms because it’s a governance requirement on your side.
• Cloud transition and usage flexibility: If you are in the middle of, or planning, a transition to the cloud (for example, moving on-prem server workloads to Azure or switching from Office on-prem to Office 365), set terms that support that. A possible non-negotiable: the ability to re-purpose investments or have a conversion mechanism. For instance, if you decide to move to Azure, you might want to convert some unused on-prem licenses into Azure credits. Some agreements allow conversion of Software Assurance spend into cloud spend (often called “Software Assurance carryover” or transition credits). Alternatively, you may need dual-use rights (to use on-premises and cloud concurrently during migration). If these are important, insist they are included. Likewise, suppose Microsoft is pushing an Azure commitment. In that case, you might demand a clause that lets you adjust that commitment if your cloud strategy changes drastically (maybe you won’t budge on a huge fixed Azure spend unless there’s an out clause or adjustment if, say, the cloud project is delayed or changed).
• Pricing protections: You may set a non-negotiable around pricing and cost predictability. For example, “We must have a price lock for the entire 3-year term on our key products” could be a stance. Or “We will not accept any built-in price increases year-over-year.” Another could be a cap on renewal increase: “At the next renewal in 2028, any price increase must be capped at X%.” Microsoft may resist long-term caps, but clearly stating your expectations is part of effective negotiation. If they can’t give it, maybe they can offer more discount upfront to compensate. The point is to declare what your company considers an acceptable risk on price and what it doesn’t.
• No forced product bundling: You might have a non-negotiable that you won’t be forced to include certain products or minimum quantities. For instance, “We won’t commit to Microsoft Copilot licenses for all 10,000 users; we will only sign up for what we plan to pilot.” Or “We cannot agree to an Azure consumption minimum of $5M/year; our non-negotiable max is $3M because that’s what our plan and budget allow.” By stating this clearly, you prevent Microsoft from pushing beyond your limits. Essentially, you’re saying, “these are our boundaries – work within them.”
• Legal and compliance safeguards: There might be contractual terms that are must-haves for your legal team. For example, some companies set a non-negotiable around data residency or security (if using Microsoft’s cloud, maybe you need a certain compliance addendum signed), or around liability and indemnity clauses. It could also be audit-related (as discussed earlier). Ensure that any of these must-have clauses are known to the Microsoft negotiators early so they can get the right approvals if needed.

When setting non-negotiables, prioritize them. Not everything can be a hard line, or you’ll have no deal. Pick the top few things that you truly cannot live without or cannot accept, and stick to those. Communicate it internally so that all your stakeholders (IT, procurement, finance, legal, etc.) are aware of the plan. That way, if towards the end of negotiation someone from Microsoft tries an end-run to an executive with a slightly different term, your team won’t accidentally give in. You’ll present a united front.

Also, plan how you’ll respond if a non-negotiable isn’t met. Is it walk-away time, or is there an alternative solution? For example, if Microsoft won’t budge on a clause you need, will you be prepared to extend the current agreement temporarily while seeking higher approval or a different approach? Often, simply being willing to delay or pause can bring them back to the table with a compromise.

In summary, Step 6 is about drawing the line in the sand for the most important aspects of your EA renewal. It ensures you don’t later say, “We wish we hadn’t agreed to that.”

By defining your non-negotiables, you protect your organization’s interests and signal to Microsoft that you are a disciplined negotiator.

They may not give you everything on your list, but you will at least come away confident that you didn’t sacrifice something essential.

Step 7: Execute Your Renewal Strategy

With all the preparation done and strategy in place, it’s time to execute your EA renewal plan. This step involves managing the process, timeline, and people involved to achieve the best outcome.

A brilliant strategy on paper can falter if execution is poor – so pay attention to the following best practices as you engage in the actual renewal talks:

• Start early and follow a timeline: Hopefully, you began this process 12–18 months before your EA expiration. That lead time is ideal because it gives you room to maneuver. If you haven’t and you find yourself with only a few months left, all the more reason to hustle and apply these steps quickly. Starting early means you can afford to play hardball in negotiations without the pressure of a ticking clock. You can also use the time to loop in additional stakeholders or do multiple rounds of offers and counter-offers with Microsoft. In execution, treat the renewal like a project – with a timeline, milestones (e.g., “complete internal usage analysis by Q1, have first pricing proposal from Microsoft by Q2, finalize legal terms by Q3,” etc.), and regular check-ins. Proactively manage the timeline so that you’re never forced to accept a deal out of last-minute desperation.
• Align internal stakeholders and maintain governance by Coordinating closely with all internal parties throughout the execution. This includes C-level sponsors (e.g., CIO, CFO), IT managers, procurement, legal, and possibly department heads if they have specific needs. Before and during negotiations, ensure everyone is on the same page about goals and fallback positions. Nothing kills a negotiation faster than mixed messages – for example, Microsoft hearing from an executive that “we really need product X” while procurement is trying to use not buying product X as leverage. Present a unified front. Internally, hold governance meetings or steering committee updates on the renewal progress. If any major decision points arise (like whether to accept a certain discount in exchange for a longer term), get consensus internally rather than having a lone negotiator make the call in isolation. This unity prevents Microsoft’s team from exploiting any divide-and-conquer tactics. It also speeds up decision-making when a good offer comes – since you’ve discussed scenarios ahead of time, you’ll know when to say yes.
• Engage Microsoft at multiple levels: During execution, involve not just your day-to-day Microsoft account manager but higher-ups if needed. Often for big enterprise deals, Microsoft will bring in a specialist or a regional manager. Don’t be afraid to request a meeting with a Microsoft licensing executive or even have your CIO talk to a Microsoft executive sponsor for your account. Executive-to-executive conversations can sometimes break stalemates (for example, getting approval for a special discount or term). Use formal negotiation meetings to cover the hard details, but also use informal chats to feel out Microsoft’s stance. Sometimes, a well-timed call or an in-person meeting can clarify positions faster than emails back and forth.
• Use competitive pressure and timing leverage when finalizing: As you approach the final stages, actively utilize the levers from Step 3. If it’s the end of Microsoft’s quarter and you know they want to close, you might hint that you’re willing to wait another quarter if needed – watch how quickly they try to accommodate you. If you have a quote from a competitor or an alternative plan (like moving a chunk of licenses to CSP), mention that you’re evaluating the final details of that alternative. Basically, remind them in this execution phase that you have options and time. Conversely, if you truly need to wrap up by a certain date (maybe you don’t want to risk a lapse in support), try not to show that urgency. You want them to feel more pressure than you do.
• Review every detail before signing: When Microsoft finally sends the paperwork (the EA documents or MCA documents, order forms, product terms, etc.), comb through them carefully. Ensure that all negotiated items are correctly captured, including pricing, discounts, and special terms (such as the flexibility clause or fixed pricing promise). It’s common for mistakes or omissions to happen in the contracting phase, especially if a non-standard term has to be added – you might find a clause is vaguely worded or placed in an appendix. Work with your legal team to verify it all. If something isn’t right, don’t hesitate to push back for a correction. It’s much harder to fix after signing, so execution includes this critical last-mile verification.
• Communicate the outcome internally: Once you’ve executed the renewal, brief your stakeholders on what was agreed. Summarize the new agreement’s key points: costs, products, key terms, and any actions you need to follow up on (for example, maybe you promised to pilot Copilot for 6 months – make sure the IT team is aware to actually do it and measure results). A proper handoff ensures that, over the next three years, your organization actually benefits from the negotiated terms. Also, update your software asset management records with the new agreement details so that you can easily track compliance and usage against what you negotiated.

Executing your renewal strategy is where all the prep work pays off. If you’ve followed the earlier steps, this phase should be a controlled process rather than chaos. By starting early, staying aligned internally, and keeping pressure on Microsoft, you drastically improve your chances of a successful outcome.

A successful execution means you walk away with an EA renewal that meets your goals: optimized costs, appropriate flexibility, and minimized risks.

As the ink dries, congratulate your team on a job well done – but also set a reminder to start the next renewal planning early enough, because the cycle will continue!

EA Renewal Checklist Table

To ensure nothing falls through the cracks, here’s a quick checklist of key items to confirm during your Microsoft EA renewal process.

Use this as a final walkthrough before signing on the dotted line:

(You can tick off each box as you complete it. A fully checked list means you’ve covered the critical bases for a successful EA renewal!)

Five Best Practices for EA Renewal Success

Even with a checklist and detailed steps, it’s helpful to remember some overarching best practices. These guiding principles will keep your renewal process on track and the outcome favorable:

1. Start early and be proactive: Begin your renewal planning 12–18 months. Early preparation gives you time to uncover savings, rally your team, and negotiate without last-minute pressure. The earlier you start, the more leverage you have – you can afford to push back on Microsoft’s offers and wait for better ones.
2. Align IT strategy with licensing: Your licensing renewal should reflect your business and technology strategy, not the other way around. If your strategy is cloud-first, structure the EA to support cloud growth (but don’t overcommit unnecessarily). If cost-cutting is a priority, focus on eliminating or reducing unnecessary services. Ensure all internal stakeholders (IT, finance, procurement, security) share the same vision of what success looks like. When your EA aligns with your strategic goals, every license dollar spent is purposeful and justified.
3. Challenge Microsoft’s first offer: Do not accept the initial quote or proposal as the final word. Microsoft’s first offer is usually far from its best. Scrutinize it, ask for better pricing, and counteroffer. Use data from your baseline and market benchmarks to justify why you deserve a bigger discount or better terms. It often takes multiple rounds to reach an optimal deal. Remember, Microsoft Enterprise Agreement negotiation is a normal part of the process – Microsoft expects it. Those who simply sign the first offer likely leave money on the table.
4. Leverage alternatives and competition: Keep reminding Microsoft that you have choices. Whether it’s the option of moving some licenses to a CSP, delaying a decision on a new product, or even considering a competitor’s product, make sure Microsoft knows that your business isn’t an automatic renewal. You don’t need to make threats; instead, ask lots of questions like “What if we moved these workloads to another cloud?” or “Is there a monthly option? We heard others are doing that.” This stance creates subtle pressure for Microsoft to sharpen its pencil and make the EA more attractive to you than any alternative.
5. Protect against compliance surprises: Maintain diligence with your license management and insist on clarity in your agreement to avoid any compliance issues. This includes tracking license usage internally and negotiating clear audit terms. The best time to handle compliance is before there’s a problem – by ensuring your contract is fair and you’re continuously managing your assets. This way, an audit (if it ever happens) becomes a formality rather than a threat. A clean compliance record also strengthens your credibility in negotiations and frees you to focus on value and cost, not firefighting license issues.

By following these best practices, you set the tone for a renewal process that is disciplined, strategic, and effective.

An EA renewal doesn’t have to be a dreaded triennial ordeal; it can be an opportunity to optimize and reset your Microsoft relationship on better terms.

Keeping these principles in mind will help you achieve an outcome your executives will applaud – cost savings, future-ready terms, and a licensing setup that truly supports your business.

Related articles

• Preparing for Microsoft EA Renewal
• Cost-Saving Opportunities in Microsoft EA Renewal
• Microsoft EA Renewal Timeline and Planning

FAQs

How early should I start EA renewal planning? – Ideally, begin 12–18 months before your agreement expires. Early planning provides ample time to assess needs, explore options, and negotiate without rushing.

What’s the biggest mistake enterprises make with EA renewals? – The biggest mistake is waiting too long and accepting Microsoft’s first offer. Rushing late often means you can’t thoroughly analyze usage or push back on pricing, leading to overspending. Always give yourself time to negotiate and don’t take the initial deal at face value.

Can I reduce licenses mid-term if my workforce shrinks? – Only if it’s negotiated into your EA. Standard EAs don’t allow mid-term reductions (you’re locked in for the 3-year term). However, if you anticipate possible downsizing, you can try to negotiate a clause for some flexibility. Otherwise, you have to wait until the end of the EA term to true-down the license count.

Do I need to accept Azure or Copilot commitments in my renewal? – No, they are negotiable and optional. You are not obligated to accept Azure consumption commitments or expensive add-ons like Copilot just because Microsoft suggests them. If such commitments don’t align with your plans or budget, push back. You can negotiate them down, defer them, or exclude them entirely from the renewal. It’s your right to only commit to what you actually need.

How do I avoid audit risk during renewal? – Keep accurate records and cover all users. Before renewal, do an internal audit to ensure you’re fully licensed (including contractors and external users). Resolve any shortfalls by purchasing required licenses proactively. During negotiations, you can also seek to clarify audit terms in the contract for transparency. By entering the renewal compliant and with documented license tracking, you greatly reduce the risk of an audit surprise. Additionally, demonstrating good license hygiene can deter Microsoft from employing aggressive audit tactics in the first place.

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Fredrik Filipsson

Fredrik Filipsson brings two decades of Oracle license management experience, including a nine-year tenure at Oracle and 11 years in Oracle license consulting. His expertise extends across leading IT corporations like IBM, enriching his profile with a broad spectrum of software and cloud projects. Filipsson's proficiency encompasses IBM, SAP, Microsoft, and Salesforce platforms, alongside significant involvement in Microsoft Copilot and AI initiatives, improving organizational efficiency.

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