Microsoft Renewal Negotiation: How to Beat Price Uplifts and Secure Discounts
Introduction – The High Stakes of Renewal
Microsoft Enterprise Agreement (EA) renewals are not just administrative formalities – they’re high-stakes negotiations that can lock in millions of dollars of IT spend.
Microsoft’s sales playbook often treats renewals as an opportunity to push price uplifts and bundle in new products.
But for you, the customer, renewal time is actually your moment of maximum leverage. After all, Microsoft wants to keep your business, and at renewal, you have options (and the ability to say “no”) that don’t exist mid-term.
Approach the renewal as a full Microsoft contract negotiation, not a rubber stamp.
With the right preparation and strategy, CIOs, CFOs, and IT procurement leaders can turn the tables – capping or avoiding renewal price uplifts and even securing fresh discounts.
The key is to start early, come armed with data, and be ready to challenge Microsoft’s assumptions.
This guide walks you through a practical, step-by-step Microsoft EA renewal strategy to avoid the usual price hikes and secure a better deal.
Why Renewals Matter:
Remember that once you sign, you’re locked in for the next term (often 3 years).
Any oversights or needless spending will be multiplied over that period. Meanwhile, Microsoft’s reps are incentivized to grow your account (it’s common for them to aim for 10–15%+ increases on renewals).
That’s why renewals are high stakes; it’s your prime chance to reset the agreement, trim the fat, and protect your budget before those uplifts kick in.
Why Microsoft Renewal Costs Spike
If you simply “roll over” an EA renewal, you may be in for a nasty budget surprise.
Several factors cause Microsoft renewal costs to spike if unchallenged:
- “Standard” 10–15% Renewal Uplift: Microsoft often bakes in a default price increase of around 10–15% on your existing licenses at renewal. If you don’t push back, you’re essentially agreeing to pay that much more for the same products. Microsoft might justify it as a “standard uplift” or cost-of-living adjustment, but never accept this as a given – it’s a starting offer, not a mandate.
- Global Price Adjustments and Inflation: In recent years, Microsoft has raised its price lists to account for currency changes and inflation. For example, certain cloud services saw double-digit percentage price hikes. If your EA renewal falls after such adjustments, your baseline costs could jump. Also, Microsoft is phasing out automatic volume discounts for large enterprises (everyone pays the same Level A list price now), which means big customers could lose pre-negotiated savings. Without proactive negotiation, a renewal can suddenly be much pricier than your last term.
- Pressure to Adopt New Products: Microsoft loves to use renewals to upsell new offerings – think Microsoft 365 Copilot, advanced security & compliance add-ons, Viva, or updated cloud services. These tools promise value (AI! automation! better security!) but come with hefty price tags. Sales reps may bundle these into your quote or push “hero” SKUs like Microsoft 365 E5 (which includes all the bells and whistles) over cheaper E3 licenses. If you’re not careful, agreeing to these additions can balloon your costs significantly for features you might not fully use immediately.
- Bundling and Commitments (Upsell Tactics): Another tactic is bundling incentives: “If you move to E5 or commit to $X in Azure over the term, we’ll give you a discount.” Microsoft may dangle an attractive overall discount if you upsize your agreement, but be wary – it often requires purchasing more or higher-tier services than you planned. The E5 vs E3 upsell is classic: E5 costs roughly 50% more per user than E3. Without a clear need, upgrading everyone to E5 just because of a bundle deal could waste money. Similarly, committing to large Azure consumption targets might backfire if you can’t actually use that much. Microsoft’s goal is to maximize your spend, so expect these bundle offers and analyze them skeptically against your real needs.
In short, costs spike at renewal due to Microsoft’s built-in increases and sales tactics.
The good news: with preparation, you can counter these moves. The next steps outline how to do just that, turning renewal from a cost increase into a cost optimization exercise.
Step 1: Start Early and Audit Your Usage
Begin your renewal prep 12–18 months before the contract end. Yes, a year or more in advance! Early planning is crucial because it gives you time to gather data, evaluate your needs, and engage Microsoft on your terms, not in a last-minute rush.
Starting well ahead of the renewal date also signals to Microsoft that you’re taking this seriously and are willing to explore options (which can make them more flexible in negotiations).
The first major task is an internal audit of your current Microsoft usage.
Before you even talk numbers or discounts, you need a clear picture of what you have and what you actually use. This audit will uncover “shelfware” (licenses you’re paying for but not using) and areas to optimize.
Key activities in this phase include:
- Inventory All Licenses and Subscriptions: Pull a detailed list of every Microsoft license, subscription, and service in your EA. Break it down by product (e.g., Microsoft 365 E3/E5, Dynamics, Azure services, Windows Server CALs, etc.) and quantity. Then determine how many of those are actively in use. Often, over a 3-year term, organizations end up with excess licenses (maybe you over-provisioned for growth that didn’t happen, or never retired licenses after departures). Identifying unused licenses now highlights areas where you can reduce costs at renewal by adjusting quantities.
- Analyze Usage vs. Entitlements: For each major product, compare what you’re entitled to versus actual consumption. For instance, if you have 5,000 Microsoft 365 E5 licenses but only 4,000 users really need E5-level features, that’s 1,000 potential downgrades to E3. Similarly, check Azure usage against any pre-purchased Azure commitments – are you using what you paid for? This exercise shows where you’re over-licensed or over-provisioned.
- Identify Downgrade Opportunities: Look closely at premium SKUs like E5, A5 (for Education), or add-on packs. Are you using the advanced features that justify the cost? It’s common to find that only a subset of users actively use, say, the advanced security, analytics, or voice features in E5. If so, consider downgrading a chunk of users to E3 at renewal. Real-world example: Microsoft 365 E5 in the US can cost around $57/user/month versus about $36 for E3 – roughly 60% more. Downgrading 1,000 users from E5 to E3 would save around $252,000 per year. That’s huge, and it doesn’t mean losing service – it means right-sizing users to the level they need. Similarly, if you have expensive add-ons (Power BI Pro, Audio Conferencing, extra storage) that only a few people use, see if you can trim those quantities or remove them.
- Check for Redundancies: Sometimes, you might be paying Microsoft for a product even though you have a third-party solution doing the same job. For example, you might have Microsoft’s Enterprise Mobility + Security suite enabled. Still, another mobile device management tool, or you’re licensed for Microsoft Teams Phone System but use a separate telephony provider. Identify these overlaps – they are prime candidates to eliminate or scale back if the non-Microsoft solution is preferred (or vice versa). Don’t pay twice for similar capabilities.
- On-Prem vs Cloud Usage: If your EA covers on-premises licenses with Software Assurance (like Windows Server, SQL Server, Office Pro Plus, etc.), audit those too. Are you still using all those servers or CALs, or have you migrated some workloads to the cloud? Suppose certain on-prem software has been retired or will be phased out soon. In that case, you can reduce or drop those licenses at renewal instead of renewing unnecessary coverage (especially since Microsoft has been raising on-prem license prices ~10%+ recently).
To organize your audit, here’s a checklist of Renewal Audit Priorities:
- Unused licenses (Shelfware): Identify any licenses and subscriptions that are paid for but unassigned or not actively used. These are immediate targets to cut or “true-down” at renewal to avoid wasting money on idle licenses.
- Oversized license tiers: Find users on higher-cost plans that they don’t fully utilize. Commonly, review all E5 (or similar premium) users and see who can be safely moved to E3 or a lower tier without impacting productivity. Also, review add-on licenses (e.g., extra security or compliance modules) to see if they’re actually in use.
- Feature utilization gaps: For bundled products (like Microsoft 365 or Office 365 suites), check which features are actually being used. If advanced features (e.g., Power BI Pro, Phone System, and advanced analytics) have low adoption, that’s evidence that you might not need the top-tier bundle for all users.
- Duplicate or overlapping solutions: List out if you have Microsoft products overlapping with other vendor solutions. For instance, do you have Microsoft Defender ATP and another antivirus across the company? Identify where you can eliminate redundancy by cutting one solution or negotiating a smaller scope for Microsoft’s product.
- Support contract usage: (More on support later, but as part of the audit, review any Microsoft support agreements (Premier/Unified) to see if you’re using what you pay for. If you’re paying for 24/7 support or a certain number of tickets, have you utilized that value? This can indicate if you should downgrade support level or negotiate a better rate.
Performing this thorough audit achieves two things. First, it cleans up your renewal baseline – you’ll only renew (and pay for) what you actually need going forward. Second, it arms you with data to justify cuts or changes to Microsoft.
You can walk into negotiations saying, “We have 15% over-licensing in these areas, so we’re dropping those at renewal,” backed by real usage numbers.
This prevents Microsoft from simply quoting “same as last time, plus uplift,” and it shows them you mean business about not overspending.
Crucially, starting early gives you time to actually implement some optimizations before renewal.
For example, suppose you discover hundreds of E5 licenses not being used.
In that case, you can begin downgrading those users in the months prior, or run a pilot of lower-tier licenses to ensure they’re happy – so that by renewal time, the change is a no-brainer.
Early action on these findings will make your negotiation position (and internal approvals) much stronger.
Step 2: Set Renewal Objectives
Before Microsoft’s sales team tries to set the agenda for your renewal, define your own objectives clearly. Think of this as drawing up your wish-list and red lines for the deal.
Having concrete goals ensures you approach the renewal proactively rather than reacting to Microsoft’s pitches.
Start by asking: What does a successful renewal look like for us? Get specific. For instance, your objectives might be:
- Cost outcome: e.g., “No more than a 5% increase in total cost year-over-year” or even “flat spend versus last term.” If budgets are tight, you might target an overall 0% increase (or reduction) despite Microsoft’s initial uplift – meaning any new things you add must be offset by cuts elsewhere.
- Licensing mix changes: e.g., “Drop 1,000 E5 licenses down to E3, and only add new products we truly need.” Or “Adopt 500 Microsoft Copilot licenses for our R&D team, but offset that cost by eliminating other unused products.” Basically, decide which products you plan to drop, keep, or add. If there’s something new you do want (say, a security upgrade or starting with a few Copilot AI licenses), set a target for that, and also list what can be removed or scaled down to help pay for it.
- Discounts and pricing: e.g., “Maintain our existing 20% discount on Microsoft 365 E3, and secure at least 10% discount on any net-new services like Azure we add.” If you had special pricing in your last deal, one objective should be to carry forward or improve those discounts, not lose them. Also, you might aim to negotiate price caps (more on that soon) so that even if you add products, the unit prices won’t break the bank now or later.
- Flexibility and terms: e.g., “Include a clause to allow a 10% license count reduction mid-term if business conditions change,” or “Make it a 2-year agreement instead of 3, because our needs are evolving fast.” Think about your business’s trajectory: Are you growing or shrinking? Any mergers or divestitures coming? New leadership with a different strategy? You might need flexibility, such as the ability to true-down at renewal (you always have that right at the 3-year mark, but maybe you negotiate an earlier re-evaluation point), or an out-clause for certain services, or at least a shorter renewal if you’re uncertain about future needs.
Document these objectives and get buy-in internally before engaging Microsoft. If you’re a CIO or ITAM lead, coordinate with the CFO, procurement, and other key stakeholders to ensure everyone agrees on the priorities.
For example, if the CFO’s top concern is budget, “no more than 5% increase” should be a hard goal. If the CISO really wants a certain security feature, make that an objective, but pair it with an offset (such as dropping something else or obtaining a discount, making it budget-neutral).
Having clear objectives does two big things: (1) It guides your negotiation strategy (you’ll know what you’re pushing for and where you can trade off), and (2) It lets you measure success after the deal (did we achieve what we set out to?).
It also helps prevent being swayed by Microsoft’s agenda. For example, suppose your objective is to maintain a flat budget, and Microsoft presents a new, fancy bundle that increases the cost by 15%. In that case, you’ll immediately see that it doesn’t align with your goals – and you can push back or counter with an alternative that fits your plan.
Example Objective Plan: Let’s say after your internal analysis, you set these targets: “Cap any cost increase to 5% overall. Add 500 licenses of Microsoft 365 Copilot for a pilot project in year 2. Downgrade 1,000 users from E5 to E3 to save costs. Maintain a 15% discount on all renewed licenses, and negotiate a price hold (0% uplift) on our existing Office 365 services.”
This kind of concrete plan gives you a playbook to negotiate from. Microsoft’s team will have their playbook — now you have yours.
Negotiation Tactics at Renewal
With your prep done and objectives in hand, it’s time to actually negotiate.
This is where you turn “asks” into concrete contract terms. A successful Microsoft renewal negotiation is part art (relationship and timing) and part science (data and alternatives).
Here are core tactics to use at the table:
- Leverage Alternate Channels (CSP/MCA): One of your strongest bargaining chips is the ability to purchase Microsoft products outside of an EA. Microsoft’s Enterprise Agreement isn’t the only game in town – you can buy through the Cloud Solution Provider (CSP) program via a reseller, or even through the newer Microsoft Customer Agreement (MCA) for certain products. During negotiations, make it clear you have evaluated these alternatives. For instance, get a quote from a CSP partner for equivalent licenses or calculate what costs would be under a direct MCA. If Microsoft’s EA renewal quote is too high, hint that you’re prepared to move some workloads to CSP month-to-month, or split off a division on a different licensing scheme. This creates healthy pressure: Microsoft knows if they don’t make the EA attractive enough, you have a Plan B (even if you prefer to stick with EA for convenience). Tip: Be prepared with specifics – e.g., “We’ve priced this out with a CSP at 20% less for similar services. We’d prefer to stay on EA for enterprise-wide consistency, but not at a significant premium.” This often compels Microsoft to sharpen its pencil and match or beat the alternative pricing to retain your business.
- Request Renewal Discounts (Match or Beat Previous Deals): Negotiation 101: if you had a discount or special pricing in your last EA, demand that it continues or improves. Don’t let Microsoft quietly remove a 15% discount you enjoyed, which effectively raises your cost even if list prices stayed flat. Bring up your history: “We’ve had a 15% discount on these licenses – we expect at least the same this time.” If you’re expanding your spend in some area (say, adding Azure or more licenses), use that to argue for better discounts: “We’re willing to invest more with Microsoft, but we need you to reciprocate with a bigger discount on the whole package.” Additionally, use market intel if you have it – if you know a peer company got 20% off, ask for 20% off. The key is not to assume any price is fixed. Microsoft often has room to give, especially for commitments of large volume or if they sense you might walk away. Aim to negotiate line by line if needed – for each major product SKU, target a discount or at least a freeze on price. Often, software vendors reserve their best prices for those who ask and push.
- Price Holds (0% Uplift on Existing Products): A powerful ask is to lock in your current pricing for the products you’re renewing. Essentially, you tell Microsoft: “We’re not going to pay more per unit than we did last term for these same licenses.” This is a reasonable request, especially if your user count is staying the same or you’re a valued customer. In practice, this means negotiating a 0% increase on renewal for core products. Many companies have successfully done this – it might require escalations and justification, but why should you pay more for the same service? Microsoft may initially propose, say, a 10% hike, but come prepared with your data (stable or lower usage, budget limits, and competitive offers) and insist on a price hold. If zero increase is a hard sell, aim for as low as possible (e.g., 2% or 3% max). The idea is to treat any price increase as a concession you make only if you get something in return (like additional value). Do not concede to “oh, everyone gets an X% uplift” – there is no rule that you must.
- Cap Annual Increases: If you’re signing a multi-year deal and adding new services, make sure to cap any year-over-year price increases on those services. Microsoft might introduce new products with an attractive first-year price but plans to ramp them up in years 2 and 3. Negotiate a clause that any annual increase is tied to a reasonable metric – for example, capped at 3% or tied to the Consumer Price Index (CPI). Better yet, if possible, lock the price for all years (many EA components are priced per year at the start anyway). The goal here is to avoid nasty surprises mid-term. Also, if Microsoft is pushing a multi-year Azure commitment, insist on price protections: Azure prices can fluctuate, so try to secure rate cards or limits on price hikes for the term. Uplift caps give you predictability and protect you from both inflation and Microsoft’s tendency to raise rates on specific products later.
- Multi-Year Commit with Conditions: An EA is typically a 3-year commitment, but that doesn’t mean you can’t negotiate the terms of that commitment. Depending on your situation, you have a few angles:
- If you want flexibility, consider a shorter renewal term (1 or 2 years). Microsoft might resist, but if you’re uncertain about the future or expect big changes, a shorter deal can prevent lock-in to potentially obsolete terms. Alternatively, include an opt-out or adjust clause: for example, the ability to reduce seats by a certain percentage at an anniversary if business shrinks, or the ability to swap one product for another if strategies change.
- Conversely, if you are confident about usage and want the absolute lowest price, you could offer to extend commitment (like a 5-year Azure commitment), but only if the price is significantly better and with escape hatches. Microsoft likes longer commits, but make it a two-way street: you get a much bigger discount or investment from Microsoft, and in return, you lock in, with terms that if they don’t hold up their end (support, SLA, etc.), you can adjust.
- Another tactic is negotiating a “most favored customer” clause or a same-discount guarantee: essentially, if you agree to a multi-year contract, ensure that if Microsoft introduces better pricing or programs for which you’d qualify, you can opt in. It’s about not being stuck with yesterday’s deal when the market evolves.
- Escalate and Leverage Executive Relationships: Don’t keep the negotiation confined to your day-to-day account manager if things get sticky. Microsoft’s reps have limits to what they can approve. If you’re hitting a wall on a key point (pricing, terms), involve your executive sponsors. For example, a CFO-to-Microsoft VP conversation can quickly get exceptions approved that a field seller couldn’t. Use your organization’s clout: if you’re a big customer, don’t be shy about reaching up to Microsoft’s senior sales leadership with your concerns. Internally, have your CIO or another C-level ready to step in and say to Microsoft, “We need your best offer, or we have to consider alternatives.” These escalations, especially timed near quarter-end or year-end, can unlock additional discounts or concessions. Microsoft values long-term relationships and large accounts; showing that your top brass is engaged underscores that you expect a serious, fair proposal.
Throughout these tactics, maintain a firm but collaborative tone. You want Microsoft to view the renewal as a partnership discussion, but one where you’re an informed buyer with choices.
Always document what is agreed upon and ensure any special terms or promises are reflected in the contract paperwork (verbal assurances mean nothing once you’re locked in). Next, we’ll talk specifically about tackling the dreaded price uplifts head-on.
Addressing Renewal Price Uplifts (Uplift Caps)
One of the most important concepts to negotiate is the “uplift cap” – essentially limiting how much prices can rise at renewal or over the term. Microsoft often tries to impose significant uplifts, but you can and should set boundaries.
What is a Uplift Cap?
It’s an agreed maximum percentage that Microsoft’s unit prices can increase, either at the renewal event or annually. For example, you might negotiate that at this renewal, no license’s unit price will go up more than 5% compared to your last term’s pricing. Or if you’re adding a new product, you might insert a clause that its price won’t increase by more than 3% per year during the 3-year term. Essentially, it’s price protection.
Why Buyers Need It:
Without an uplift cap, you’re exposed to Microsoft’s “standard” hikes, which, as we discussed, are often 10% or higher if you just accept them. That can blow a hole in your IT budget, especially if you have thousands of users. A cap ensures predictability and fairness. It forces Microsoft to justify any increase above the cap (which they usually won’t, they’ll just stay at the cap). It’s a way of saying: “We’ll renew, but only if we know the costs won’t spiral.” Particularly in deals where you might commit to increasing usage (like adding 500 new licenses in year 2), you might also cap the price for those future additions now.
What’s Realistic:
Aim for as low as possible. Many savvy customers negotiate 0% increase on renewal for key products – basically a price freeze. If Microsoft balks at that, push for single-digit caps. For instance, you could agree to at most a 3–5% uplift but only with other concessions attached. Never accept an open-ended “prices at renewal will be as per then-current list price” without a cap or control, or you could face an unwelcome surprise if Microsoft changes pricing broadly.
If Microsoft insists that they can’t fix future prices, consider alternatives: one is to renew slightly earlier (before a known price increase hits) to lock in current pricing, or to commit to more licenses now under current pricing rather than later. But in most cases, for the renewal you’re negotiating now, you can cap the increase – it’s a matter of bargaining.
Be sure any agreed cap is written into the contract or renewal terms. For example, include a clause in the EA amendment that “the unit price for Product X for the renewal term shall not exceed Y% of the prior unit price” or “shall remain $Z per user for the term.”
Also, if you’re getting a special discount, you might add a “price hold” phrase that Microsoft will not increase the list price or, if they do, they’ll increase your discount to keep the net price the same (so you’re insulated).
Your procurement/legal team can handle the exact wording, but the point is to have a legally binding protection. It’s much easier to negotiate this before signing than to fight a price hike later.
In summary, uplift caps are your safety net. They transform a potentially scary renewal price jump into a controlled, limited change or none at all.
Microsoft might grumble, but if pushed, they often concede at least to low single-digit caps for valued customers – because they’d rather lock you in than lose you by being inflexible.
Exploit Renewal Timing
Timing is one of your best friends in negotiation. Microsoft has fiscal deadlines, and you can use them to your advantage.
First, be aware of Microsoft’s fiscal calendar: their fiscal year ends on June 30, and their quarters end on Sep 30, Dec 31, Mar 31, and June 30. Why does this matter? Because as those dates approach, sales teams are under pressure to close deals and hit quotas.
A renewal that coincides with Microsoft’s year-end (or even the end of Q3 in March) can often yield better discounts as reps scramble to fill their targets.
Align with fiscal year-end or quarter-end: If your EA naturally expires around those times, great – you’re in a strong position to negotiate when Microsoft is most eager. If not, consider a short-term extension to push your renewal into a favorable quarter. For instance, suppose your EA expires in October.
That’s early in Microsoft’s fiscal year (not a hot urgency time for them). You could negotiate a 6-month extension to April of the next year, bringing the real renewal negotiation into Q4 (Apr-June) when Microsoft is much hungrier to deal.
Yes, extensions are possible – Microsoft would often prefer a committed extension than losing you. Even a 3-month extension to align with a quarter’s end can help. Of course, only do this if you need the timing leverage or extra prep time; if you’re already at a quarter-end and ready, then strike when the iron is hot.
Use the clock during negotiation:
As you near Microsoft’s quarter/year-end, you might notice the sales team becomes more flexible and responsive. Strategically, you can slow-play some discussions if you’re far out, then apply pressure as the deadline nears.
Alternatively, if you’re already up against your own deadline, don’t be afraid to temporarily renew for a very short term (even month-to-month or a 1-quarter bridge) to reach a quarter-end.
This prevents the scenario of “time’s up, just accept their terms.” Never let the expiration date force you into a bad deal – Microsoft would rather extend you a bit than lose you entirely, especially if you signal that you just need more time to evaluate their offer against alternatives.
Another timing angle: Microsoft’s year-end programs and promos. Often, around Q4, Microsoft may offer special incentive funds or discounts to close large renewals (e.g., an extra 5% off if you sign by June 30).
Aligning your negotiation to tap into those can save money. Ask your Microsoft rep if there are any “year-end promotions” applicable – they might not volunteer this unless asked.
Lastly, ensure that if you do things to the end of Microsoft’s quarter/year, you’re truly ready to sign if the deal is right. Having your exec approvals lined up and legal vetted by then is key, because a delay past the quarter might lose some leverage. Basically, use timing to create a sense of urgency on Microsoft’s side, not on yours.
Don’t Forget Support & Services
Licensing is the star of the EA renewal, but don’t neglect Microsoft support and related services that often renew alongside (or in the shadow of) your EA. One significant item is Microsoft Unified Support (formerly known as Premier Support).
Many organizations have a support contract that comes due around the same time each year. Microsoft may try to increase your support costs, especially if your product spend goes up (Unified Support is often priced as a percentage of your total Microsoft spend or some tier thereof).
Audit and Align Support Usage:
Just like you audited licenses, audit your support usage. Are you using the number of support hours or problem resolutions you’re paying for? If you’re paying for a 24/7 elevated support tier but only logging a few critical cases a year, you might be overbuying. Verify that your support level (Core, Advanced, or Performance tiers in Unified) aligns with your actual needs. If you have unused support benefits (training days, service credits), note those too – they might be leveraged or you might negotiate to carry them over.
Negotiate Support Costs: Treat support renewal as part of the whole deal. Don’t accept a big uplift on support just because you’re focused on licenses. Microsoft often applies an annual uplift on support (commonly 5-10% per year) – push back on that.
You can attempt to cap support renewal increases just like with licenses. For example, negotiate that your Unified Support cost won’t increase more than, say, 3% or will remain flat if your Microsoft product spend remains similar. If you’re reducing your license footprint significantly, argue for a corresponding reduction in support cost, since presumably your Microsoft “footprint” is smaller.
It can be effective to negotiate support in conjunction with the EA: “We’ll renew the EA with these terms, but only if we also get a commitment that our support contract is renewed at no more than X% increase (or even at a discount).” Sometimes, Microsoft account teams have flexibility on support pricing if it helps close a bigger licensing deal.
Services and Training:
Similarly, if you’re also subscribing to Microsoft consulting services, training bundles, or Azure credits/support, fold those in. Perhaps Microsoft owes you some free training days or deployment assistance – you could ask for that to be included as a sweetener.
Or if you plan to engage Microsoft Consulting for a project, mention it during the negotiation to see if it can improve your overall package (like they fund some workshops or give a services discount).
The main point: look at your Microsoft relationship holistically. Every piece costs money. Aligning your support renewal with the EA negotiation means you won’t renew support on autopilot and then later realize you overpaid.
And if you’ve had major issues with Microsoft support quality, bring that up – maybe you negotiate for a higher support tier at lower cost or some guaranteed service level. Microsoft wants to keep you happy as a customer; use that leverage to ensure the support side is a fair deal, too.
Renewal Negotiation Checklist
Before you finalize any Microsoft renewal, run through this checklist to make sure you’ve covered all bases:
- ✅ Audit and eliminate unused licenses: Remove shelfware and drop any products you no longer need before finalizing the renewal. Only pay for what brings value.
- ✅ Re-tier and optimize user licenses: Downgrade users from higher-cost plans (E5 to E3, etc.) if they don’t need the extra features. Align each user with the most cost-effective license for their role.
- ✅ Benchmark alternative pricing (CSP/MCA): Get quotes or estimates outside the EA – via CSP partners or Microsoft’s direct web pricing. Know the “street price” so you can challenge any EA quote that is above market. This gives you credible leverage.
- ✅ Negotiate uplift caps and price holds: Don’t sign without protections against price increases. Ensure the agreement caps any renewal price uplift (aim low, e.g. 0–5%) and holds prices steady where possible. Lock in discounts in writing.
- ✅ Push for additional discounts or value-adds: If Microsoft wants a longer term or a big commitment, ask, “What do we get?” Ensure you’re getting something tangible – extra discount, free software trials, deployment funds, etc. – in return for any concession.
- ✅ Escalate when needed: If negotiations stall on important issues, involve your executives and request that Microsoft bring in higher-level decision makers. A deal of significant size should have Microsoft’s senior attention – use that to get stubborn issues resolved.
- ✅ Align support contract terms: Don’t sign the EA and forget support. Have you renewed or negotiated your Unified Support with similar scrutiny? Make sure support costs aren’t quietly rising unchecked. Co-term it with the EA if useful, and document any promises (such as support credits or rate locks).
- ✅ Document special terms in the contract: Any custom agreements – whether it’s an uplift cap, a flexible true-down clause, a unique discount – must be in the written contract or amendment. Double-check that all negotiated points are captured before signing. If it’s not written, it doesn’t exist.
- ✅ Executive sign-off and plan: Finally, brief your leadership on the final deal specifics. Ensure you have internal buy-in that the renewal aligns with the company’s objectives. Also, keep a record of the negotiation process and outcomes – this will be gold when you prepare for the next renewal, as lessons learned and a baseline for future negotiations.
By ticking off these items, you ensure there are no loose ends. The goal is a well-structured renewal that you won’t regret halfway through the term.
Now, let’s address some frequently asked questions that often come up around Microsoft renewals.
Related articles
- Microsoft EA Renewal Timeline: Planning 18 Months Out for Success
- How to Negotiate a Cap on Microsoft Renewal Price Uplifts
- Microsoft Renewal Discounts: How to Get a Better Deal the Second Time
- Renewal vs. Recompete: Should You Renew Your Microsoft EA or Switch Licensing Programs?
- Microsoft Renewal Pitfalls: 5 Gotchas to Watch Before You Sign
FAQs
Q: What is a standard Microsoft renewal uplift?
A: Microsoft often tries to impose a “standard” uplift of around 10–15% on Enterprise Agreement renewals. In other words, if you changed nothing, they’d quote you roughly 10%+ higher than you were paying, just because the term is new. This isn’t a hard rule, but it’s commonly reported. The uplift might be higher if you were on special pricing that they now want to claw back. Always remember, this “standard” increase is not mandatory – you can and should negotiate it down (many customers have pushed it to near 0% with effort).
Q: Can we negotiate a 0% increase?
A: Yes, it is possible to negotiate a 0% increase (price freeze) on your renewal – especially for existing products that you’re simply continuing. Many organizations have achieved flat renewals or even cost reductions by pairing strong usage data (showing Microsoft that you could reduce or cut things) with competitive pressure. Microsoft won’t volunteer a 0% hike, but if you make it a condition (“we will renew only if we don’t pay more than today for these services”), they often prefer to concede that point rather than lose the account. It may require escalations and holding firm, but aim for a 0% rate. At worst, you’ll end up with a very minimal increase. Also consider the bigger picture: you might accept a small increase on one portion if they give a discount on another – it’s the total that matters to your budget, so allocate your negotiation capital wisely.
Q: How do CSP/MCA alternatives impact EA renewals?
A: CSP (Cloud Solution Provider) and MCA (Microsoft Customer Agreement) are alternative ways to buy Microsoft licenses and cloud services, often with more flexibility or different pricing. Their existence gives you leverage. If Microsoft knows you’re willing to switch some or all purchases to a CSP reseller or the pay-as-you-go style MCA, they realize you have options outside the EA. We’ve seen companies use CSP quotes to negotiate down EA pricing, essentially saying, “Match this, or we’ll move these workloads to CSP.” Additionally, if your organization is on the smaller side (with a few hundred seats), Microsoft might even suggest CSP/MCA, as they steer smaller customers away from EAs. In any case, having a plan B (even if you prefer EA for its perks) strengthens your hand. It can also be a practical solution to remove certain items from the EA – for instance, you might keep core Office 365 in the EA for 3 years, but buy some experimental Azure services via MCA month-to-month to avoid long commitments. Utilize alternative channels both as negotiation leverage and as a strategic sourcing option where appropriate.
Q: Is it possible to true-down at renewal?
A: Absolutely. In fact, renewal time is the primary chance to true-down your license counts. During an EA term, you generally can’t reduce your committed quantities (you can add via true-ups, but not subtract). However, at the renewal, all bets are off – you can adjust your quantities to match your actual needs in the future. This is why conducting a usage audit is critical: it tells you where to focus your efforts. If you had 5,000 Office 365 licenses but only used 4,500, you can renew for 4,500 – avoiding paying for 500 extras. The key is to do this analysis and declare your intended reductions when negotiating the renewal quote. Microsoft’s quote might initially assume you’ll renew the same numbers (or more); it’s on you to say “No, we are only renewing what we need: X of this, Y of that.” They will recalculate pricing accordingly. True-downs can sometimes lead Microsoft to try to raise unit prices (to maintain revenue), which is why negotiating price holds and caps are important in tandem. However, use the renewal as an opportunity to right-size and eliminate any unnecessary slack.
Q: Should we align support negotiations with EA renewals?
A: Ideally, yes – coordinate your Microsoft support contract renewal with the EA negotiation. There are a few reasons: First, both licensing and support costs ultimately hit your budget for Microsoft spend. If you negotiate them together, you can balance the give-and-take across them (for example, agreeing to a small increase in licenses if support stays flat, or vice versa). Second, Microsoft’s account team typically looks at the “total relationship value.” If they see you considering cuts to support or that support is up for renewal, they might be more flexible on either front to keep the overall account healthy. Third, logistically, it’s just easier – you can co-term the support agreement with your EA so they renew at the same time in the future, which gives you one big negotiation rather than two separate ones at different times. If your support (Unified/Premier) is out of sync, you can ask Microsoft for a short extension or reduction to align it. Additionally, when Microsoft knows you’re looking at everything holistically, they may throw in incentives (like a slight discount on support if you increase your cloud spend, or maintaining support pricing if you renew a bigger EA). Just be sure not to let support fall through the cracks – those costs have also been climbing, and negotiating them can save significant money.
Five Expert Recommendations
To wrap up, here are five expert tips to remember as you approach your Microsoft renewal:
- Start renewal preparation at least 12 months in advance: Time is leverage. Early planning (even 18 months out) gives you the runway to audit, strategize, and engage Microsoft without deadline pressure. Late rush = less leverage.
- Never accept Microsoft’s “standard uplift”: The so-called normal increase (10% or whatever they claim) should always be challenged. Treat it as a first offer. With data and pushback, you can often erase it.
- Use CSP/MCA as credible leverage: Conduct thorough research on alternative purchasing channels. Even if you won’t fully switch, letting Microsoft know you have a Plan B (or will split the business) keeps them competitive on pricing and terms.
- Lock protections in writing (uplift caps & discounts): Any concessions you win – be it a price cap, a discount percentage, or a flexible term – get it in the contract. Don’t rely on handshake promises. This ensures you’re protected throughout the term and at the next renewal.
- Treat support renewals as part of the deal: Microsoft’s ecosystem isn’t just licenses. Include Unified Support or other service contracts in your negotiation scope. Align their timing and negotiate hard on support costs just as you do on license costs, for a true total cost optimization.
By following these recommendations and the steps outlined above, you’ll be well-equipped to beat the typical renewal price uplifts.
Remember, you as the customer have more power than you might think during a renewal – Microsoft wants to keep your business.
With preparation and a bit of savvy negotiation, you can secure an agreement that meets your organization’s needs without breaking the budget. Good luck with your Microsoft renewal negotiation, and go in there with confidence!
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