Microsoft EA vs. MPSA
Introduction – EA vs MPSA: Choosing the Right Microsoft Agreement
Mid-to-large organizations often struggle when choosing between a Microsoft Enterprise Agreement (EA) and a Microsoft Products & Services Agreement (MPSA). The decision comes down to a strategic trade-off: long-term commitment vs. pay-as-you-go flexibility.
An EA locks you into a multi-year, enterprise-wide deal with Microsoft, while an MPSA lets you purchase licenses as needed without a fixed term.
Picking the wrong path can lead to overspending or being stuck with the wrong licenses, so it’s important to understand the differences and choose an agreement that fits your organization’s needs and strategy.
Read our comprehensive guide, Microsoft Licensing Agreements Comparison: EA vs CSP vs MCA.
What Is the Microsoft Products & Services Agreement (MPSA)?
The Microsoft Products & Services Agreement (MPSA) is a volume licensing contract designed for flexibility.
Introduced as the replacement for the old Microsoft Select Plus program, the MPSA is an evergreen, transactional agreement with no expiration date. This means once you sign an MPSA, you can keep buying licenses under it indefinitely — there’s no three-year renewal cycle.
Importantly, an MPSA does not require an organization-wide commitment.
You purchase only what you need, when you need it, making it essentially a pay-as-you-go model for Microsoft licensing.
Under an MPSA, you can buy on-premises software licenses (perpetual licenses) and even some cloud services subscriptions on a one-off basis.
Microsoft uses a point system for volume discounts in MPSA: each purchase earns points, and as your cumulative points reach higher thresholds, you qualify for better pricing tiers (Level A, B, C, D).
However, because you’re not making a massive upfront commitment, the discounts are generally smaller than those in an EA. You gradually earn better pricing over time with consistent purchases, rather than getting big discounts on day one.
One of the key benefits of MPSA is its flexibility. There is no minimum seat requirement (even smaller organizations can use it, though it’s most popular with mid-sized companies).
You aren’t obligated to license every PC or user in your organization — if one department needs 50 Visio licenses, you can buy just those 50 under MPSA without having to cover everyone.
Similarly, if your needs decrease or a project ends, you simply stop purchasing new licenses; there’s no penalty or true-down process because you were never locked into a preset number to begin with.
MPSA is best suited for organizations with irregular or unpredictable licensing needs.
For example, companies that still maintain significant on-premises environments or have fluctuating projects requiring software on a rolling basis often find MPSA advantageous. It allows them to avoid over-commitment and “shelfware” (unused licenses sitting on the shelf).
The agreement is managed through Microsoft’s Business Center portal, which streamlines tracking purchases and allows multiple authorized purchasers (e.g., different departments or affiliates) to buy under the same master agreement.
This decentralized purchasing capability gives organizations more control internally, although it requires effective internal governance to prevent duplicate purchases.
It’s worth noting that Microsoft has de-emphasized MPSA in recent years. While it remains available (especially for existing customers), Microsoft often steers new customers toward other channels like the Cloud Solution Provider program or the Microsoft Customer Agreement for cloud services.
In fact, MPSA is now primarily used for on-premises software licensing.
Key cloud offerings such as Azure and Microsoft 365 (Office 365) are no longer sold to new customers via MPSA, limiting the agreement’s relevance for cloud-centric organizations.
In short, MPSA today fills a niche for flexible, transactional licensing of traditional software, but it’s not the go-to path for a cloud-first strategy.
Enterprise Agreement (EA) Recap in the MPSA Context
The Microsoft Enterprise Agreement (EA) is Microsoft’s flagship volume licensing contract, traditionally favored by large enterprises.
In the context of comparing with MPSA, an EA represents the opposite end of the spectrum: it’s all about commitment in exchange for benefits.
An EA is a three-year contract (with an option to renew for additional terms) that typically requires you to have 500 or more users or devices to qualify.
When you sign an EA, you commit to licensing specified Microsoft products enterprise-wide — meaning you cover all “qualified” users or devices in your organization with those products for the duration of the agreement.
What do you get for making this big commitment? Primarily, significant volume discounts and price protection. EA pricing is tiered by volume (often referred to by Level A, B, C, D pricing levels); the larger the initial order, the better the per-license price you negotiate.
Once set, your prices for those products are generally locked for the 3-year term, shielding you from Microsoft’s year-over-year price increases. This long-term price lock provides budgeting certainty.
Microsoft also typically bundles Software Assurance (SA) with all licenses in an EA (more on SA below), and may throw in other perks for large deals, like deployment planning services or even some free Azure credits, to sweeten the agreement.
In Microsoft’s eyes, an EA customer is making a strategic partnership-level commitment, and they often reward that with the best deals and support engagement.
However, the EA comes with rigidity that contrasts sharply with MPSA’s flexibility.
When you agree to an EA, you’re effectively “all-in” for three years. You have an initial baseline of licenses for Year 1 that you cannot reduce during the term.
If your organization’s headcount or usage drops, you generally must continue paying for the originally committed quantity until the EA expires. (The only partial exception is if you have an Enterprise Subscription Agreement or certain cloud subscriptions, which might allow some annual adjustments, but standard EAs for perpetual licenses have no mid-term reductions.)
On the flip side, if your usage increases, the EA has a true-up process: once a year, you report any additional licenses/users you’ve added above your initial count and pay for those retroactively for that year.
This allows you to deploy new software to, say, 100 new employees during the year without buying licenses upfront; you’ll settle up for them at the anniversary.
While true-ups handle growth, there’s no equivalent true-down within the term for reductions. In summary, an EA is ideal for organizations that can confidently predict growth or at least maintain stable usage over three years — you’re trading flexibility for negotiated savings and predictability.
In an EA vs. MPSA context, think of the EA as “commitment for reward”. Large enterprises that standardize on Microsoft’s stack (e.g., Windows, Office/Microsoft 365, Server products) often go with an EA because it simplifies compliance (everyone is covered under one umbrella agreement) and yields the lowest cost per license. It’s a strategic fit if you’re rolling out Microsoft technology broadly and want to lock in pricing.
Just be aware that Microsoft’s sales teams will push EAs for those who qualify, as it guarantees them revenue and customer lock-in.
From a buyer’s perspective, you should still evaluate if that commitment truly aligns with your organization’s plans – especially if you anticipate any change that could leave you over-licensed.
For more comparisons, Microsoft EA vs. CSP: Should You Stay with an EA or Use Cloud Solution Providers?.
Purchasing Model Differences
One of the biggest practical differences between an EA and an MPSA is how you purchase and pay for licenses. With an Enterprise Agreement, you make an upfront commitment to a certain quantity of licenses for the whole organization. Pricing is usually based on that initial volume.
Typically, you don’t pay the entire three-year cost upfront; instead, payments are spread annually over the term (making it easier on budgets than one huge lump sum).
However, those annual payments are based on your committed quantity. If during the year you grew and added licenses, you’ll true-up and pay the additional amount at the anniversary.
In essence, an EA’s purchasing model is “commit now, adjust once a year if needed.” It provides a structured, somewhat predictable cadence: negotiate once, then conduct a yearly true-up, and then renegotiate at renewal after three years.
Under an MPSA, purchasing is on-demand and transactional. There is no annual true-up ritual because you’re not deferring any costs – if you need a license or subscription, you simply buy it at that time. You might place orders monthly, quarterly, or whenever new needs arise.
The payment is due at purchase (or whatever payment terms you have with your reseller). This means budgeting under MPSA can be a bit more ad-hoc: costs will occur in spikes aligned with procurement events, rather than a steady annual bill.
Some organizations appreciate that licenses are bought at the moment of need, directly tying spend to usage. Others might find it harder to predict cash flow since there’s no fixed schedule – especially if big projects pop up unexpectedly.
From a procurement standpoint, EA’s model centralizes purchasing decisions at the start of the agreement (and at true-ups), which can simplify internal approval processes (you get the big purchase approved once).
MPSA’s model distributes purchasing decisions across time; it offers agility but requires diligence to ensure each purchase is approved and optimized.
Companies using MPSA should keep an eye on their cumulative spend – it’s easy to treat each transaction in isolation. Still, you’ll want to periodically review how it adds up compared to an EA scenario.
In summary, EA = commit upfront and adjust annually, whereas MPSA = buy what you need when you need it.
If your organization prefers steady, planned expenditures and hates surprise bills, the EA’s model provides that structure (except true-up surprises if you don’t track growth!). If, instead, you value aligning spend tightly with actual demand, MPSA’s pay-as-you-go approach can be more aligned with your philosophy.
Discounts & Pricing Leverage
When it comes to discounts and pricing, Enterprise Agreements often have the upper hand due to the leverage of a large, committed deal.
With an EA, you negotiate pricing with Microsoft (usually via a Large Account Reseller or licensing partner). Volume tiers determine the starting point – for instance, Level A for the minimum 500 seats, up through Level D for 2,400+ seats, each level providing better discounts.
A big EA deal might even go beyond standard tiers with special pricing if you’re a very large customer. Crucially, those negotiated prices are then fixed for the entire 3-year term.
This price protection is a big selling point: even if Microsoft’s list prices increase (and they often do annually or semi-annually), your EA prices for the covered products won’t change during the term. In an inflationary environment or if you anticipate Microsoft raising prices on key products, an EA shields you from those hikes for three years.
On the other hand, MPSA pricing is more incremental and dynamic. The MPSA uses the points-based volume discount system inherited from the old Select program. You accumulate points with each purchase, and hitting certain point totals moves your organization into the next discount tier.
For example, once you’ve bought enough licenses to reach Level B, future purchases come at the Level B discounted rate. However, there’s no upfront bulk discount for a big order unless you’ve already reached a high tier.
In practice, this means that if you only sporadically purchase licenses, you might remain at a lower discount level for a while. Large organizations can certainly achieve high discount levels on MPSA due to their cumulative spend, but this often requires time and continuous purchasing.
Also, unlike EA, each new purchase under MPSA is priced at the prevailing rate at that time (minus whatever volume discount level you’ve achieved).
If Microsoft’s prices go up next year, an EA customer is insulated until renewal, but an MPSA customer will pay the higher price on their next order. There’s no long-term price lock in MPSA beyond the fact that higher volume will give you better per-unit prices.
Another aspect of pricing leverage is the ability to negotiate or get special deals.
In an EA, because it’s a big one-time negotiation, customers can sometimes negotiate extras: maybe a further percentage off a certain product, or some added Software Assurance benefits, or special concessions like being able to true-down certain cloud services at an anniversary.
Microsoft has more incentive to bend on terms when a large, multi-year deal is on the table. With MPSA, there’s less room for bespoke negotiation – pricing is largely by the book (the point system) and each transaction is more standardized.
You primarily work with a reseller on MPSA purchases, and while you might negotiate the reseller’s margin a bit, you’re not going to get Microsoft to, say, create a custom SKU discount just for you on an MPSA.
As a result, medium-to-large enterprises often find the EA yields lower costs per license in the long run when they fully load it, because of these deeper discounts and special incentives that MPSA can’t match.
One very important factor today is the scope of products available.
As mentioned earlier, Microsoft has made a strategic shift toward cloud subscriptions sold via other channels. Azure and Office 365 (now Microsoft 365) subscriptions are no longer sold through MPSA for new customers.
Microsoft wants cloud subscriptions on either an EA (for large commitments) or through CSP (Cloud Solution Provider) or the newer Microsoft Customer Agreement.
This means if your organization needs primarily cloud services, an MPSA isn’t going to help you procure Azure credits or Microsoft 365 subscriptions with any advantage — you’d likely need an EA or to buy through a cloud reseller program.
In contrast, an EA can bundle your cloud and on-premises needs under one agreement, often with added discounts for committing to cloud usage. This limitation significantly reduces MPSA’s relevance in a cloud-first era.
Essentially, MPSA shines for purchasing traditional software licenses, but for cloud services, its value is eclipsed by other programs.
So, when weighing cost, consider not just the raw discounts but also what you can buy: an EA can be a one-stop shop for most Microsoft offerings with volume pricing, whereas MPSA might leave you seeking another channel for your cloud spend (potentially at higher cost).
For help on what agreement to choose, Which Microsoft Licensing Agreement to Choose? A Decision Guide.
To summarize some key differences in a concise format, here’s a comparison of EA vs. MPSA on major points:
| Factor | Enterprise Agreement (EA) | Products & Services Agreement (MPSA) |
|---|---|---|
| Contract Term | 3-year fixed term (standard, with renewal) | No fixed term (evergreen agreement) |
| Minimum Size | ~500 user/device minimum to qualify | No formal minimum (250+ users recommended for value) |
| Upfront Commitment | Yes – Must cover all qualified users/devices enterprise-wide | No – Purchase only what you need (no org-wide requirement) |
| Payment Schedule | Annual payments (spread over 3-year term) | Pay per purchase (as needed, transactional) |
| Volume Discounts | Deep initial discounts based on committed volume; can negotiate special pricing | Cumulative point-based discounts; improve as you buy more over time (generally smaller discounts vs EA) |
| Price Protection | Pricing locked for 3 years on covered products | No long-term price lock; each purchase at current prices (based on achieved discount level) |
| True-Up/Down | Annual true-ups for any usage increase; no mid-term reductions (true-down) | No true-up needed (buy licenses when adding usage); stop buying if needs drop (no penalty, though no refunds on unused licenses) |
| Software Assurance | Included on all licenses by default (SA benefits bundled in) | Optional per license (add SA if needed, or omit to save cost) |
| Cloud Services | Can be included in EA (Azure, Microsoft 365, etc.) often with bundled discounts or credits | Generally not available for new purchases via MPSA (cloud subscriptions must be bought through other programs) |
| Flexibility | Rigid during term – cannot reduce commitments until renewal (3-year lock-in) | Highly flexible – add or remove purchases at any time; no ongoing commitment |
| Best Suited For | Large, stable enterprises standardizing on Microsoft and seeking lowest per-unit costs with predictable spend | Mid-sized or decentralized orgs with fluctuating needs, especially for on-premises software, valuing agility over maximum discounts |
Flexibility vs. Price Locks
When deciding between EA and MPSA, a fundamental consideration is flexibility versus price certainty.
This is essentially the heart of the trade-off:
- Enterprise Agreement: Price Locks, Less Flexibility. By entering a multi-year EA, you gain price locks and stability. You know exactly what you’ll pay for each product for the next three years, which is great for budget planning. This can protect you from surprises like sudden price hikes or currency fluctuations. However, you sacrifice flexibility. You’re locked into a minimum purchase (your initial quantities) and into the Microsoft ecosystem for that term. If your organization needs to downsize or if you consider switching to an alternative solution, an EA makes it cumbersome — you’ll be paying for the Microsoft licenses regardless of reduced usage until the term is up. In short, an EA offers certainty (both in pricing and in enterprise-wide coverage) at the expense of agility. It works best when you’re fairly confident in your Microsoft usage projections and don’t foresee needing to pivot dramatically in the short term.
- MPSA: High Flexibility, Variable Pricing. With MPSA, you have no long-term binds. You could buy 100 licenses this month and zero the next, or even not purchase anything for a while, and that’s perfectly fine under the agreement. This agility is invaluable if your license needs fluctuate — say, project-based needs or uncertain growth. You won’t over-commit and end up with paid-for but unused licenses (no “shelfware” because you didn’t pre-buy). The flipside is that there’s no guaranteed future pricing. If you need to buy more licenses two years from now, you’ll pay whatever the market rate is at that time (minus whatever small discount level you’ve achieved). Microsoft could raise prices or retire certain SKUs, which introduces some risk. In essence, MPSA gives you freedom to adapt but no promise of stable pricing beyond the short term. It’s a pay-as-you-go deal, not just in payment timing but in cost predictability.
To illustrate this trade-off: Choosing an EA is like signing up for a bulk purchase agreement – you’re betting that you’ll need all that volume, and you get a bulk discount and locked rate in return.
Choosing MPSA is like deciding to buy retail as needed – you pay a bit more per item and prices might change, but you won’t end up with extra inventory you don’t use.
There’s no right or wrong answer universally; it truly depends on whether price assurance or flexibility is more important to your organization’s strategy.
Some companies even pursue a mix: lock in an EA for core, predictable licenses (ensuring those are at a fixed low price) but use transactional purchases for anything uncertain, thereby balancing the two approaches.
Product Coverage & Limitations
Another angle to compare EA and MPSA is the breadth of products and services covered under each, as well as any limitations thereof. A Microsoft EA is broad and can serve as a one-stop licensing vehicle. Under a single Enterprise Agreement, an organization can cover both on-premises software and cloud services.
For instance, you can include Windows 10/11 Enterprise upgrades, Office or Microsoft 365 subscriptions, server licenses, SQL Server, Azure consumption (often via Azure Monetary Commitment), Dynamics 365, etc., all under the same EA.
Microsoft often encourages bundling as much as possible into an EA – it simplifies the contract and, from Microsoft’s perspective, increases your commitment to them.
The benefit for you is convenience (one renewal date, one primary agreement to manage) and potentially integrated discounts (e.g., committing to a certain Azure spend in an EA might earn you a better rate or credits). Essentially, the EA can cover your entire Microsoft stack if you want it to.
In contrast, the MPSA has some limitations in product coverage, especially in the modern cloud era. Originally, MPSA was designed to let you buy “all Microsoft products and services” on a transactional basis as well.
And indeed, an MPSA still allows purchases of many product types — primarily perpetual software licenses and certain subscriptions. But as Microsoft’s cloud licensing evolved, they decided not to fully support their newest cloud offerings through MPSA.
For example, if you wanted to purchase a large number of Office 365 (now Microsoft 365) subscriptions or Azure cloud services today, Microsoft would direct you to either an EA (if you’re large enough) or the CSP/New Commerce route, not to MPSA.
MPSA is primarily used for on-premises licenses (Windows, Office perpetual, server licenses, CALs, etc.) and may also apply to some legacy online services for those who acquired them earlier. It’s not the vehicle for comprehensive cloud licensing anymore.
This means that if your organization is planning a hybrid or cloud-first strategy, relying solely on MPSA could be problematic.
You might find that you have to juggle multiple licensing programs — for example, using MPSA for your on-premises Windows/SQL Server needs, but separately using CSP or a Microsoft Customer Agreement for your Azure or Microsoft 365 subscriptions.
That can add complexity and even cost (since you won’t get an aggregated volume discount across everything). An EA, by comparison, could wrap those up together: you could commit to, say, 1000 Microsoft 365 E3 licenses and some amount of Azure, alongside your Windows and server licenses, all in one EA package.
Another limitation to consider is that MPSA has fewer “bundled” benefits for products. Under an EA, certain products might be available as bundles or suites (like enterprise-wide Microsoft 365 F3/E3/E5 for all users, which can include Windows, Office, EMS, etc., at a discounted bundle rate).
MPSA is more a la carte — you buy specific licenses. If Microsoft is running a promotion or incentive, those often apply to EA deals (for instance, a discounted add-on if you commit to cloud usage). MPSA purchases won’t typically enjoy those special promotions.
In summary, EA covers the full spectrum of Microsoft offerings under one roof, which is advantageous if you’re deeply invested in Microsoft’s cloud and on-prem products together.
MPSA is largely focused on traditional software licensing now, which is fine if you just need, say, Windows Server licenses or Office perpetual licenses occasionally.
But suppose you foresee a big move to the cloud. In that case, MPSA alone may not accommodate that vision, and you’ll have to plan accordingly (possibly by eventually transitioning to an EA or other licensing agreements).
Software Assurance Options
Software Assurance (SA) is Microsoft’s maintenance program that provides extra benefits like free version upgrades, training vouchers, 24/7 support, and mobility rights.
It’s a critical part of Microsoft licensing, and the way SA is handled is quite different between EA and MPSA.
In an **Enterprise Agreement, Software Assurance is essentially mandatory and bundled into every license. When you license a product through EA, you are almost always licensing it as “License & Software Assurance” for the term of the agreement.
This means you pay for SA as part of the deal (which increases the upfront cost of each license, typically by 25-30% of the license price per year, multiplied by three years).
The upside is that every license under your EA is covered for upgrades – if a new version of a server product, Windows, or Office comes out, you already own rights to it. It also means you have access to all those training days, support incidents, and other perks across the organization.
Essentially, with EA, you’re paying for peace of mind and extras, ensuring your whole enterprise has the latest software and support. There’s no picking and choosing; it’s an all-in commitment to Software Assurance benefits.
With an **MPSA, Software Assurance is optional and selective.
Each time you buy a license through MPSA, you decide: do I purchase just the license, or the license + SA? If you choose to include SA, you’ll pay the additional cost (prorated to whatever date your organization’s MPSA uses for anniversary – often SA can be co-terminus to an annual date if desired for easier management).
If you skip SA, you’re only entitled to use that specific version of the product, and if a new version comes out, you’d have to buy an upgrade license or a new license if you want it. The ability to mix and match SA gives you a cost optimization lever.
You might decide that for core infrastructure products (like SQL Server, which you plan to upgrade regularly), you’ll add SA, but for something like a one-off purchase of Visio for a few users who don’t need the next version, you’ll save money and buy it without SA.
Similarly, if you have certain test or training systems where the latest version isn’t critical, you can omit SA. This granular approach can trim costs by avoiding overspending on SA licenses that won’t utilize the benefits.
However, managing SA selectively does add a bit of complexity.
You must keep track of which licenses have active SA and which don’t, and plan for renewals of SA if you want to maintain upgrade rights. In contrast, under an EA, you know everything is covered as long as the EA is active.
From a negotiation and strategic standpoint, buyers should be thoughtful about Software Assurance under either program.
In an EA, since you’re paying for SA on everything, make sure you leverage the benefits – use your training vouchers, use the planning services days, know what support is available, etc. That’s value-added service you’re entitled to.
Under MPSA, only attach SA where it truly makes sense. For example, if you’re buying Windows Server licenses via MPSA and you know you might move those workloads to Azure in a year (and won’t upgrade on-prem), maybe skip SA on those.
On the other hand, if you’re buying Office licenses via MPSA and Office 2025 might release soon, you might invest in SA to get that upgrade “free”.
The flexibility is in your hands to optimize SA spending – a freedom the EA doesn’t give, because EA assumes blanket coverage.
To put it simply: EA is a buffet where SA is automatically on every plate, whereas MPSA is à la carte, you choose SA per dish.
The buffet ensures everyone gets the full meal (all upgrades and extras), but you pay for it regardless of appetite. The à la carte lets you pay only for what you’ll actually consume, but you have to decide wisely.
Administration & Management Tools
Managing licenses and agreements is another practical consideration.
Both EA and MPSA come with their own administrative portals and processes, and each has advantages depending on how your organization operates.
If you have an Enterprise Agreement, you’ll primarily manage your licenses through the Microsoft Volume Licensing Service Center (VLSC).
This is the central portal where your organization’s license entitlements are recorded. EAs often involve multiple “enrollments” under one agreement if you have different affiliates or regions, but they all tie back to your master agreement and are visible in VLSC.
Additionally, suppose you’re consuming cloud services under the EA (like Microsoft 365 or Azure).
In that case, these will also appear in their respective admin portals (e.g., Microsoft 365 admin center, Azure portal) for the operational side; however, the billing/entitlement side is managed under the EA and VLSC.
The EA tends to centralize control: typically, a small licensing team or administrator handles the annual true-ups, renewals, and keeps track of compliance. This centralized management is straightforward, as one contract governs the bulk of usage.
However, it also means any purchasing outside that EA needs tight control – for example, you wouldn’t want a department bypassing IT to buy a few licenses elsewhere, as that might conflict with EA terms or result in paying twice for something.
With an **MPSA, management is done via the Microsoft Business Center portal.
The Business Center was specifically created for MPSA customers as a modern way to track purchases, downloads, and overall points accumulated.
One notable feature of MPSA/Business Center is that it supports a more decentralized procurement model if desired. You can set up multiple Purchasing Accounts under the MPSA for different departments or subsidiaries, each with its own authorized buyers.
They can log in, buy what they need (within whatever internal approval structure you have), and those purchases all roll up to the organization’s master MPSA.
This can be efficient for companies that don’t funnel all IT purchases through a single team — you get flexibility for units to self-serve their licensing needs in a controlled environment. The Business Center shows all purchases and their point contributions, making it easier to track where you stand in discount levels.
That said, decentralized buying under MPSA also requires careful governance and internal communication.
You need clear policies so that, for example, one department doesn’t accidentally buy a product via MPSA that the rest of the company is already licensed for under a different scheme (avoiding duplication). It’s wise to have a licensing specialist or software asset management function oversee the MPSA activity periodically.
In terms of ease of use, the VLSC has a reputation for being a bit dated and sometimes clunky, whereas the Business Center is somewhat more modern (since MPSA was introduced later).
But both are web portals that your team will have to learn to navigate. Neither is particularly difficult for standard tasks, such as pulling license keys or viewing entitlements.
One more administrative difference: reporting and compliance. With an EA, your true-up process effectively forces an annual internal audit of usage – you tally any growth. With MPSA, there’s no formal true-up, so staying compliant means you need to ensure each deployment has a corresponding license purchased.
Some organizations find the EA’s structure helpful in maintaining compliance records (you know you’re covered enterprise-wide for certain products). Others like MPSA because it avoids the potentially contentious true-up negotiations and true-up surprises; instead, each purchase is a straightforward transaction.
In summary, EA management is centralized and cyclical (annual reviews), whereas MPSA management is continuous and can be distributed. The best approach depends on how your company’s procurement and IT departments are structured.
If you prefer tight central control and predictable cycles, EA fits well. If you want to empower divisions or have more frequent but smaller purchasing decisions, MPSA’s tools accommodate that better.
Use Case Scenarios – When to Choose EA or MPSA
Now that we’ve broken down features, let’s talk about which situations favor EA vs. MPSA. The nature of your organization, your IT strategy, and spending patterns should guide the choice.
Here are some scenarios to illustrate:
- Enterprise Agreement is generally the choice for large, standardized environments. If you’re a large organization (say, 5000 employees) that has standardized on Microsoft products across the board, an EA likely serves you best. For example, imagine a corporation that plans to deploy Microsoft 365 to all employees, keep everyone on Windows 11 Enterprise, and use SQL Server and Office on most devices. The sheer scale means you’ll benefit from volume discounts. The EA’s three-year term aligns with multi-year IT planning cycles, and you’re confident that usage will only grow. The pricing lock and ability to budget a known amount each year are valuable. Also, if you know you need to embark on cloud projects, Microsoft might bundle incentives (like Azure credits or discounted Power Platform licenses) into your EA. Choose EA when you have predictable, broad Microsoft needs and meet the size threshold – you’ll get the best unit pricing and a simplified licensing regime.
- MPSA is often the choice for mid-sized or decentralized organizations with varying needs. For instance, consider a mid-sized company (~800 seats) that hasn’t fully moved to cloud services and still buys servers and productivity software for specific teams as needed. Some departments might use different Microsoft products at different times (one team might spin up a project with SQL Server this year, but no one else needs it). This company might worry that committing to enterprise-wide licenses in an EA would force them to buy a lot of licenses they don’t actually use. Choose MPSA when you want maximum flexibility – you only want to pay for what’s actually required, and you don’t have a consistent enough usage pattern to lock in a three-year deal. MPSA is also appropriate if you don’t qualify for an EA due to size (e.g., a 300-person organization can’t typically start a new EA), or if you simply prefer not to be tied to a long contract.
- Organizations with unpredictable growth or project-based usage lean towards MPSA. If your headcount might shrink or you frequently start and stop projects that need licenses temporarily, an EA could lead to paying for a higher watermark of usage than you actually need. MPSA lets you scale out and back in freely (aside from the fact that you won’t get money back on licenses purchased – but at least you’re not obligated to keep buying more). A classic example is a professional services firm that staffs up for certain contracts and then downsizes when projects finish; their software needs expand and contract accordingly. They might avoid EA so as not to get stuck with excess capacity.
- Hybrid approach – not an official “agreement” but a strategy: Some larger enterprises actually use a combination. For example, they might sign an EA to cover all user-facing products (Windows, Office/M365 for each user, etc., because they want everyone on the same version and get the best pricing, but then use an MPSA for niche or ad-hoc needs. A scenario could be: you have an EA for 1,000 users of Microsoft 365 and Windows Enterprise, but you use an MPSA to buy a handful of Windows Server licenses for a test lab or a few SQL Server licenses for a niche project that not everyone needs. The reason for doing this might be that adding those niche licenses to the EA would require making them part of a company-wide commitment, or it would simply complicate the EA for little benefit, whereas buying them via MPSA is straightforward and one-time. This kind of hybrid licensing strategy can optimize costs — ensure bulk buys for common needs (EA) and one-offs for special cases (MPSA) — but it requires strong asset management to ensure you’re not double-buying or overlooking something.
- Cloud-centric organizations will often find an EA (or perhaps CSP programs) unavoidable. If your company is cloud-first (lots of Azure, Dynamics 365, online services), Microsoft will generally encourage an EA or the newer Microsoft Customer Agreement route. MPSA may not cover all the cloud services you need, as discussed. So a use case for MPSA diminishes if almost all your spend is cloud subscriptions; in that case, you either go EA for an integrated approach or buy via CSP if you want month-to-month flexibility. MPSA would only linger for any remaining perpetual licenses you might need. Conversely, if you are staying on-premises mostly, MPSA can handle it, and you avoid the commitment of an EA, especially if you’re uncertain about eventually moving to the cloud.
In summary, choose EA if you are large enough and want the best pricing for a broad Microsoft deployment, and you can live with the commitment. Choose MPSA if you value flexibility, have more limited or sporadic needs, or don’t meet EA’s scale.
Always consider the roadmap: if you might shift strategies in a year or two (like suddenly adopting cloud services or acquiring another company), think about which agreement gives you the adaptability or stability you’ll need.
Five Expert Recommendations
To wrap up, here are five expert tips for organizations evaluating EA vs MPSA:
- Benchmark a 3-Year Cost Scenario for Each: Before deciding, run the numbers. Estimate your licensing needs for the next three years and calculate the total cost under an EA versus buying via MPSA (include likely discount levels, SA costs, etc.). This will give you a clear picture of which might be more cost-effective. Sometimes an EA’s up-front savings look great, but if half those licenses sit unused, an MPSA pay-as-you-go approach might have been cheaper – and vice versa. Don’t forget to factor in true-up costs in the EA scenario for growth, and the possibility of price changes in the MPSA scenario.
- Consider Your Cloud Requirements (Azure/M365 are Key): If your organization needs significant cloud services like Azure or Microsoft 365, that could sway your decision. As noted, new cloud subscriptions aren’t really sold via MPSA now, so if you require those, an EA might be unavoidable (or you’ll be using a different licensing channel alongside MPSA). If you are planning a big cloud migration or expansion, lean towards an EA or other cloud-specific agreement where you can negotiate those as part of the deal. Conversely, if you’re staying mostly on-premises, you have more freedom to choose either, but it’s good to know where your tech roadmap is headed before locking in.
- Use MPSA Selectively to Prevent Shelfware: Even if you go with an EA, you can use an MPSA (or similar transactional purchasing) selectively for uncertain needs. For example, if you’re not sure you’ll need a product across the whole company, don’t blindly stuff it into the EA “just in case” – that could result in shelfware (licenses you paid for but didn’t end up using broadly). Instead, use MPSA to buy a smaller quantity on the fly for the teams that actually need it. This way, you avoid over-committing in the EA. If demand later explodes, you can always fold it into the EA at renewal. If you’re only using MPSA, this point still applies: purchase in step with real needs to avoid over-buying just to chase a discount level. The flexibility of MPSA should be used to minimize wasted spend.
- Be Strategic with Software Assurance and Benefits: Under an EA, since SA is included, make sure you maximize those benefits (plan your upgrades to use the new version rights, utilize support incidents, training days, etc. that you’re entitled to). Also, during EA negotiations, you can sometimes negotiate additional benefits – e.g., extra support or advisory hours, or custom terms around license transition – don’t be shy about asking, because you’re committing a lot. Under MPSA, only attach Software Assurance when it makes sense and consider the lifecycle of each purchase. Also, remember that without an EA, you might miss some extras (like free training vouchers), so budget accordingly if those are important. In short, manage SA as a lever: in EA, it’s about getting your money’s worth; in MPSA, it’s about not paying for what you don’t need.
- Consider a Hybrid Licensing Strategy: You don’t necessarily have to choose EA or MPSA exclusively. Many organizations adopt a hybrid approach to optimize value. For instance, you might maintain an EA for your core user-based licenses (to get the best price on Windows/Office or Microsoft 365 for all employees, plus the convenience of one agreement) while using MPSA for specific one-off needs (like extra server licenses, development/test environments, or a business unit that has very sporadic software needs). This can give you the best of both worlds: the EA covers predictable, high-volume stuff cheaply, and MPSA covers the unpredictable without forcing a big commit. If you pursue this, just ensure you have a clear internal policy on what goes to EA vs MPSA to avoid confusion. And keep an eye on Microsoft’s evolving programs. For example, if Microsoft fully phases out MPSA in the future, you might need to shift those one-off purchases to a newer scheme (like CSP or the Microsoft Customer Agreement). Always have a plan B in licensing, because Microsoft’s rules and programs do change over time.
By following these recommendations and carefully evaluating your situation, you can approach the EA vs MPSA decision with a negotiation-ready, buyer-first mindset.
Remember, Microsoft will often push the option that benefits them (long-term commitment), but the right choice is the one that gives your organization the optimal combination of cost savings, flexibility, and strategic alignment.
Make sure whichever route you choose, it’s driven by your needs and numbers rather than the default sales pitch. Good luck with your Microsoft licensing strategy!
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