An effective license position is the single document that determines whether your next audit lands at three percent of contract value or thirty. We build the ELP from primary deployment data, reconcile it against your entitlement record, and harden it before Microsoft or its third party auditor has a chance to write a different version. The ELP is the contract memory. It is the work that anchors every renewal and every audit that follows.
Most enterprises do not have a current effective license position. They have a procurement file, a partner produced spreadsheet that is twelve months stale, a set of entitlement records that do not reconcile with the deployment data, and a quiet hope that the gap is small. When Microsoft opens a formal review, the absence of a defended ELP becomes a settlement multiplier. The work we do is to build the ELP before that moment, on the buyer side of the analysis, and to harden it against the methodology Microsoft and its third party auditors actually use.
The ELP states, for every Microsoft product the enterprise has rights to or has deployed, the entitled quantity, the deployed quantity, and the variance. It states the assumptions used to map deployment to entitlement, the dual use rights that apply, the qualifying conditions that were tested, and the boundary cases that were resolved one way or the other.
It is not a license report. It is the argument the enterprise will make when Microsoft challenges the deployment number. Every line carries the basis on which it was calculated. Every variance carries the resolution that the procurement team will defend in writing if the auditor pushes back.
When an audit opens and the enterprise has no defended ELP, Microsoft and its appointed auditor build the ELP. They build it from the deployment scan they conduct, against the assumptions that favor the auditor, and they present it as a finding. Negotiating that finding down is materially harder than negotiating against an ELP the enterprise already produced and defended.
Across the practice, customers who arrived at audit notice with a defended ELP settled at a median 8 to 14 percent of the auditor preliminary finding. Customers without one settled at 41 to 68 percent. The ELP is the leverage. It is the first thing we build for every audit defense engagement, and it is the right thing to build before that engagement is needed at all.
The ELP build runs through four sequenced phases. Each phase produces an artifact that the next phase consumes. Each phase is documented to the point that any third party reviewer can rebuild the conclusion from the inputs.
Procurement file, EA history, true up history, transfer records, MSDN and Visual Studio entitlements, donated and inherited licenses. The exhaustive right to deploy record.
Active directory, Azure AD, SCCM, Intune, Microsoft 365 admin telemetry, Azure consumption, Dynamics tenant data. The complete deployment picture.
Edition rules, downgrade and step up rights, persona segmentation, qualifying conditions, dual use, virtualization rights. The argued variance per product line.
The written document, the supporting evidence pack, the methodology note, the open questions, and the executive briefing on remediation versus negotiation.
The ELP covers every Microsoft product on which the enterprise holds entitlement or has deployment. Scope is set on day one of the engagement against the customer contract record, not against the auditor scope letter or the partner suggested product list.
E3, E5, F3, Business Premium, add on stacking, Defender bundles, Purview, Teams Phone, Copilot. Active user reconciliation, leaver process audit, license pool review, and the unassigned license investigation.
EA commit consumption, MACC structuring, reserved instance allocation, hybrid benefit application, OpenAI usage, savings plan posture, and the consumption tagging that the auditor will read.
Windows Server datacenter and standard, SQL Server core licensing, RDS, Cloud PC, Azure Virtual Desktop. The virtualization rights, the core counting, and the SQL passive failover boundary.
Sales, Customer Service, Finance, Supply Chain, Business Central. Team member versus full user mapping, attach licensing, and the multiplexing posture for shared application access.
Power BI Premium per user and capacity, Power Apps per app and per user, Power Automate, Copilot Studio. Capacity allocation against active consumption and the workload boundary review.
Visual Studio subscriptions, GitHub Enterprise, Copilot Business, Azure DevOps, Windows Server CALs, RDS CALs, and the historical CAL posture that often carries the largest variance on legacy estates.
The ELP is the input to two materially different negotiations. The audit negotiation, in which the enterprise defends the deployment number against the auditor finding. The renewal negotiation, in which the enterprise resets the entitlement floor on the new contract. The same document does both jobs when it is built to the right standard.
When the enterprise produces a defended ELP at audit kickoff, the auditor scope of work compresses. The auditor will validate the ELP rather than rebuild it. The variance bands narrow. The settlement conversation moves from a deployment quantity dispute to a remediation timeline negotiation, which is a materially smaller dollar number.
Across the practice, audit exposures opened at an average of 16.4 percent of contract value when the customer had no defended ELP. Audit exposures opened at 4.2 percent when the customer had one. The audit defense engagement still adds value at either starting point. The starting point matters.
At renewal, the ELP becomes the foundation of the right size argument. The seller will propose growth assumptions, an inflated entitlement floor, and bundle attachments calibrated to the current contract. The customer who arrives with a defended ELP rebuilds the proposal against actual deployment rather than against the seller forecast.
Customers who entered renewal with a current ELP captured concession bands 4 to 9 percentage points wider than peer customers without one, controlling for vertical and product mix. The ELP is not a cost reduction in itself. It is the document that makes the cost reduction defensible.
An ELP is not a compliance artifact. It is the position from which every conversation with Microsoft is held. Customers who treat it that way negotiate from a different chair than customers who treat it as an annual reporting exercise.Managing analyst · ELP and audit defense practice
The engagement produces the ELP itself and five artifacts that surround it. Each artifact has an explicit consumer inside the enterprise and an explicit external reader if the document is ever produced to Microsoft.
The same four questions surface at the discovery stage of every engagement in this service line. The short answers are below. The full conversation happens against the customer specifics on the first analyst call.
A reseller earns margin on what you buy from Microsoft. Our economics are inverted. We are paid by the customer to reduce or restructure what the customer commits to Microsoft. No SKU we recommend produces revenue for the firm. No customer outcome we deliver compromises a reseller relationship the firm does not hold. The advice is buyer side without qualification, and the engagement structure is built around that posture.
This is the reason most reseller produced analyses recommend keeping the SKUs the reseller earns the most on. Our analyses do not have that incentive. The recommendations follow the customer interest, full stop.
The engagement is buyer side and confidential. Analyst access to customer data runs against a signed NDA with the engagement entity, not against any Microsoft visible data sharing arrangement. The artifacts produced for the customer are not shared with Microsoft unless the customer chooses to share them in negotiation. The methodology footnotes are designed to be defensible if surfaced and silent if not.
The engagement does not surface to the customer Microsoft account team. The seller will see the customer producing better counter analysis than the seller proposed pricing accounts for. The seller will not see the source of the counter analysis unless the customer chooses to disclose it.
Most engagements run as a fixed scope, fixed fee, fixed timeline structure. The fee is set on day one against the scope agreed in the engagement letter. Success based or contingent fee structures are available for specific engagement types where the outcome is cleanly attributable, but they are the exception rather than the default. Buyer side advisory works best when the analyst incentive is to do the right thing rather than to maximize a contingent number.
The first two analyst calls are scoped at no fee and produce the engagement letter only if the fit is right. We do not propose engagements we cannot deliver the outcome on.
The customer provides access to the contract record, the procurement file, the relevant administrative telemetry, and a single point of contact who can authorize the data access and the stakeholder interviews. The engagement does not require dedicated customer resourcing beyond the point of contact. The analyst team runs the work and surfaces findings into the customer cadence.
The data access is scoped tightly. Read only telemetry is sufficient for most workstreams. Where elevated access is required, the engagement scopes the access against a specific runbook with the customer security team in the loop.
Two analyst calls. No pitch. We tell you what we would do, what the leverage actually is, and whether we are the right firm for this engagement.