Renewal and True-Up in Microsoft Enterprise Agreement:
- Renewal Process: Renew every 3 years to continue access and benefits.
- True-Up Adjustment: Annually adjust for additional licenses added during the year.
- Budget Predictability: True-ups provide flexibility for increased usage without immediate extra cost.
- Compliance Check: Ensure correct license counts during renewal to maintain compliance.
- Cost Management: Helps manage scaling costs as your organization grows.
Renewal and True-Up in Microsoft Enterprise Agreement (EA)
Microsoft’s Enterprise Agreement (EA) is a popular licensing option for medium to large businesses looking to simplify software management. Organizations can license Microsoft products at volume discounts under a multi-year contract.
Within an EA, renewal and True-Up are two crucial components that ensure licensing is flexible and scalable, keeping up with the needs of growing businesses.
This article aims to provide an in-depth understanding of these processes and how they benefit organizations.
The renewal process ensures your organization can access the latest technologies and support. In contrast, the True-Up process allows you to adjust licenses annually based on the organization’s growth or change. Let’s explore each of these aspects in more detail.
What is Renewal in Microsoft EA?
The renewal of a Microsoft EA extends your existing enterprise agreement once it nears its expiration, usually after three years. Renewals are vital for organizations to maintain continuity of services and stay up-to-date with Microsoft’s latest technologies.
Why Renewing an EA is Important:
- Continuity of Services: Renewing ensures that your organization’s use of Microsoft tools doesn’t experience disruptions.
- Access to Latest Features: Renewals guarantee access to all the latest Microsoft products, including newly released software and services.
- Pricing Benefits: Renewals lock in certain pricing benefits and discounts, making it easier for companies to budget their licensing costs.
Example: A company nearing the end of its three-year Microsoft EA renewal agreement renews its agreement to maintain access to tools like Microsoft 365 and Azure. Without renewing, the company could face higher costs if it were to purchase these services separately at retail pricing.
Key Steps for Renewal
Renewal doesn’t have to be a daunting process. By following a few key steps, your organization can streamline the renewal and make it more effective.
Steps for Renewal:
- Assess Current Usage: Take stock of all current licenses and evaluate how effectively they are being used.
- Evaluate Needs: Identify gaps and whether additional tools or services are required.
- Engage Microsoft or Reseller: Work directly with Microsoft or your preferred Microsoft licensing partner to negotiate terms, explore new services, and secure pricing benefits.
- Review Software Assurance: Consider extending or upgrading Software Assurance to retain access to updates, support, and additional services.
Example: During the renewal process, a company evaluates its use of Microsoft Teams and Azure Virtual Desktop and realizes it needs more licenses for remote work. It negotiates with Microsoft to include these additional licenses in the new EA term.
The True-Up Process
The True-Up process in a Microsoft EA allows an organization to adjust its license count annually based on actual usage. This is particularly important for growing businesses whose needs change year over year. True-Up ensures that licensing remains compliant and that your organization has an accurate reflection of the software it is using.
How True-Up Works:
- Annual Adjustment: True-Up allows companies to add licenses to their EA annually instead of paying for new licenses immediately upon addition.
- Flexible Growth: You can expand your user base or add more software over the year and then pay for those additions at the True-Up.
- Cost Effective: By aligning software usage with license allocation, True-Up allows companies to manage costs more predictably and avoid overpaying for licenses.
Example: A company grows from 500 to 600 employees over the year. During the annual True-Up process, the company adjusts its EA to account for an additional 100 Microsoft 365 licenses, thus ensuring compliance and aligning costs with their actual usage.
Benefits of the True-Up Process
The True-Up process offers multiple benefits, particularly when managing costs and aligning with business growth. Instead of purchasing new licenses every time a new employee is hired, True-Up allows a more strategic approach to licensing.
True-Up Benefits:
- Avoid License Shortfalls: True-Up helps maintain compliance by ensuring the organization has enough licenses to cover all users and devices.
- Easy Adjustments: True-Up lets companies adjust to organizational changes without requiring immediate payments for every change.
- Predictable Cost Management: Annual True-Ups help ensure there are no surprise costs, making budgeting easier.
Example: A marketing agency onboarding new teams during a major project can add required software licenses during the True-Up process rather than when new staff are hired, simplifying budgeting and procurement.
Managing Compliance Through True-Up
Compliance is a significant concern for organizations, especially those with growing and changing workforces. True-Up ensures your software usage aligns with Microsoft’s licensing requirements, avoiding penalties or disruptions.
How True-Up Ensures Compliance:
- Regular Inventory Check: True-Up conducts a license inventory each year to ensure that no licenses are under or over-allocated.
- Avoid Penalties: Misuse of software or under-licensing can result in penalties. The True-Up process helps identify discrepancies and ensures proper licensing.
- Streamlined Audit Process: True-Up aligns your software usage with your licenses, simplifying the audit process if Microsoft performs a compliance check.
Example: An organization undergoing rapid expansion may use the True-Up process to ensure all Microsoft Visio employees have the appropriate licenses. If Microsoft conducted an audit to verify compliance, this would prevent issues.
Renewal vs. True-Up: Key Differences
Though renewal and True-Up are crucial components of managing a Microsoft EA, they serve different purposes. Understanding their differences will help businesses handle their EAS more effectively.
Renewal:
- Timing: This happens at the end of the EA term (typically every three years).
- Purpose: Extends the current licensing contract for continued use.
- Outcome: Ensures the organization stays up-to-date with the latest technology and retains support benefits.
True-Up:
- Timing: Occurs annually within the EA term.
- Purpose: Adjust the number of licenses to reflect changes in usage.
- Outcome: Ensures compliance with licensing requirements and adjusts costs accordingly.
Example: A company may renew its EA to maintain services like Microsoft 365 for the next three years, while the annual True-Up accounts for new employees added during each year of that term.
Software Assurance and Its Role in EA Renewals
Software Assurance is an optional but highly valuable component that organizations often extend during EA renewals. It provides a wide range of benefits, from upgrade rights to support services, and it plays a major role in ensuring that an organization can make the most out of its Microsoft investments.
Key Benefits of Software Assurance:
- Upgrade Rights: Access to the latest Microsoft software versions.
- Training Vouchers: Employees can use training vouchers to improve their proficiency in Microsoft tools.
- Support Access: Direct access to Microsoft support services helps resolve issues quickly and efficiently.
Example: During renewal, a company that includes Software Assurance can upgrade to the newest version of Microsoft Windows at no additional cost, which helps maintain consistency and security across all devices.
Tips for Successful Renewal and True-Up
Managing renewal and True-Up effectively ensures you get the most value from your Microsoft EA while maintaining compliance and avoiding unnecessary costs.
Tips for EA Renewal and True-Up:
- Plan Ahead: Start preparing for renewal at least six months before the end of the EA term.
- Engage Stakeholders: Include IT, finance, and business unit input to understand needs and forecast growth.
- Use Tools: Use tools like Microsoft License Advisor or consult with Microsoft partners to determine the most cost-effective options.
- Review Utilization: Regularly review software usage to determine if licenses are underused or if more are needed, simplifying the True-Up process.
Example: A manufacturing firm preparing for EA renewal gathers feedback from different departments to understand their software needs and make informed decisions.
FAQ on Renewal and True-Up in Microsoft EA
What is a true-up in Microsoft EA?
A true-up is an annual process in which organizations report the additional licenses they’ve used, ensuring compliance with their Microsoft Enterprise Agreement (EA).
Why is the true-up process necessary in Microsoft EA?
True-up ensures that the EA properly reports and covers any additional licenses deployed during the year.
When does a true-up occur in Microsoft EA?
True-up occurs annually, allowing businesses to add new licenses without immediate cost and report them at the end of the year.
What happens during a true-up?
Businesses calculate any additional licenses used during the year and pay for them in a single annual transaction.
What is the renewal process in Microsoft EA?
Renewal happens at the end of the EA term, allowing businesses to continue using Microsoft products and adjust their license quantities if needed.
How does renewal affect the true-up process?
Renewal offers an opportunity to adjust license counts based on current and future needs, streamlining the true-up process for the next agreement period.
Can license quantities be reduced during renewal?
Yes, businesses can adjust their license quantities during renewal to better align with their current usage.
What support is available during renewal in Microsoft EA?
Microsoft provides resources to help businesses understand their current usage, plan for true-ups, and adjust license quantities during renewal.
Can additional licenses be added outside of the true-up process?
Yes, businesses can add licenses at any time, but they must report these additions during the annual true-up.
What happens if businesses don’t complete the true-up?
Failure to complete the true-up can result in non-compliance with the EA, leading to penalties or additional fees.
What flexibility does renewal provide in Microsoft EA?
Renewal allows businesses to adjust their agreement to better meet evolving needs, including scaling licenses up or down.
How does the true-up affect overall costs in Microsoft EA?
The true-up process ensures businesses pay for additional licenses deployed, helping manage overall costs more effectively.
Is there a penalty for exceeding license counts without a true-up?
Yes, businesses may face penalties if they exceed their license count without reporting through the true-up process.
What is the timeline for true-up reporting?
True-up reports are typically due annually, allowing businesses to add licenses yearly and settle them once a year.
Who benefits most from the true-up process in Microsoft EA?
Businesses experiencing growth or fluctuations in usage benefit most from the true-up process’s flexibility, which allows them to scale their licenses as needed.
