Negotiating a Microsoft Enterprise Agreement (EA) or Server and Cloud Enrollment (SCE) requires careful planning, savvy strategy, and an understanding of Microsoft’s tactics. This guide presents 20 essential negotiation strategies for CIOs and licensing professionals at large enterprises.
Each strategy focuses on reducing costs, increasing flexibility, minimizing lock-in, and maximizing value in your EA/SCE deal. Use these in a professional, advisory capacity to steer your negotiation to success.
1. Perform Price Benchmarking and Leverage Volume Discounts
Microsoft’s EA pricing is not one-size-fits-all – discounts can vary widely between customers. Start by benchmarking pricing against similar organizations. Research what discounts companies of your size and industry typically receive, and use that data to challenge any quote that seems inflated.
Microsoft offers tiered volume discounts in EAs: the more users or devices you commit, the lower the per-license cost. Due to volume and package deals in an EA, large enterprises can see built-in savings of up to ~45% off list prices. Ensure you qualify for the highest discount tier your enrollment size allows, and insist on pricing at least as good as market benchmarks.
Real-world negotiators have saved millions by showing Microsoft evidence of better pricing offered to peers and demanding the same. In practice, don’t be shy about asking Microsoft to match competitive pricing – come armed with data and make them justify any discrepancies. This will maximize the discount percentage in your agreement.
2. Time Your Negotiation with Microsoft’s Fiscal Year-End
When you negotiate, it can be as important as what you negotiate. Microsoft faces internal pressures to close deals by quarter-end, especially by fiscal year-end (June 30). Use this to your advantage. Plan to finalize your EA/SCE renewal or new deal near Microsoft’s Q4 (April–June), when sales teams are eager to hit targets and may be more flexible on price and terms.
For example, many enterprises report that pushing negotiations into late May or June resulted in extra discounts or concessions that weren’t on the table earlier in the year. That said, don’t let timing force you into a rushed or bad deal – start the process well in advance so you can comfortably reach late-stage talks by Q4. Another tip: Align your internal approval timeline so you can sign in to Microsoft’s year-end crunch if needed.
Microsoft sometimes offers incentives for early or off-peak signing (to smooth their pipeline)—be aware of these dynamics. In short, use Microsoft’s calendar to maximize your leverage, but always balance timing with thorough preparation.
3. Start Early and Prepare Rigorously
A successful EA negotiation begins long before you sit at the table. If possible, kick off your renewal prep 12–18 months in advance to give ample time for analysis and internal alignment. Begin by auditing your current deployments and usage: What Microsoft products and cloud services are you using, and how many licenses of each?
Gather detailed data on license entitlements, current costs, and usage patterns. For example, document that you have 800 Office 365 E3 users and 200 E5 users, 50 Windows Servers, etc., and note how fully each is utilized. Next, work with business and IT leaders to forecast needs for the next 3 years (the typical EA term).
Are you planning a major hiring spree, a divestiture, or a move to Azure or Microsoft 365? Identifying these plans helps determine what to expand or cut in the new agreement. It’s also wise to set clear objectives for the negotiation upfront (e.g., “reduce total cost by 10%” or “add Power BI licenses within the same budget”). Internally, assemble a cross-functional team – IT, procurement, finance, and legal – to contribute to the strategy.
A well-prepared team that knows its current usage, future demand, and goals will negotiate from a position of strength. Consider using a checklist:
- Current Usage Baseline: Document all MS products in use and license counts (e.g., 2,000 Office 365 E3 users, 500 Windows 10 Enterprise devices, etc.) and verify actual active use.
- Entitlements & Costs: Gather your current EA contract, pricing sheets, and special terms. Know what you’re paying per license now as a benchmark.
- Future Requirements: Forecast user growth or reduction, planned projects (e.g., cloud migrations, new offices), and technology roadmap changes that will impact licensing.
- Pain Points & Targets: Identify any shelfware (unused licenses), features users need but don’t have, and budget targets or cost-saving needs.
- Negotiation Timeline: Plan key dates backward from expiration – including time for Microsoft to provide quotes, internal reviews, and final approvals. Starting early means you won’t be backed into a corner as the deadline nears.
This level of preparation ensures you know exactly what you need (and don’t need) in the agreement, and it signals to Microsoft that you are a savvy customer who won’t settle for a boilerplate deal.
4. Keep Competitive Alternatives on the Table
One of your strongest sources of leverage is the possibility (or appearance) that you could shift spending away from Microsoft. Even if Microsoft is your primary IT partner, explore alternative solutions for at least parts of your stack.
For example, evaluate AWS or Google Cloud for certain workloads or Google Workspace for certain user segments, and let Microsoft know you are considering them. You don’t necessarily have to switch, but having credible options gives you bargaining power. Microsoft’s team is aware that large enterprises have choices and will work harder to win your business (or keep it) if they sense a real risk of losing some of it.
In practical terms, you might solicit a proposal from AWS for a portion of your cloud infrastructure or pilot Google Workspace with a small group of users. When Microsoft’s sales reps know you’re looking at others, they often respond with better discounts or contract terms to dissuade a move. Be careful not to bluff unrealistically – focus on plausible alternatives for your business.
The goal is to avoid looking “captive” to Microsoft. One enterprise, for instance, leveraged an AWS proof-of-concept to negotiate a larger Azure consumption discount. Another used the option of moving some users to third-party Office 365 support to push Microsoft into including additional support at no extra cost.
Always maintain a professional tone—you’re not threatening, just evaluating all options. Keeping a multi-vendor mindset minimizes lock-in and forces Microsoft to compete for your spending.
5. Exploit Microsoft’s Sales Incentives (Bundle and Trade Concessions)
Understand what Microsoft wants from the deal, and use it to extract your desired concessions. Microsoft reps are often incentivized to sell certain products or services (like Azure consumption, Microsoft 365 E5 upgrades, or support renewals). Be open to bundle negotiations that leverage these incentives.
For example, if you’re also due to renew Microsoft Premier/Unified Support or purchase consulting services, negotiate them as a package with your EA. “We’ll sign the EA renewal now and extend our Unified Support for 3 years, but we need an extra 5% discount on the EA licenses” is a reasonable ask that considers Microsoft’s total revenue.
By bundling multiple business commitments together, you give Microsoft a bigger win – and you should get a bigger discount in return. Similarly, if Microsoft strongly pushes for product adoption (e.g., moving from Office 365 E3 to E5 or adopting a new Azure service), don’t dismiss it outright.
Evaluate its value to you first. If it could be beneficial, express conditional interest to get leverage: “We might upgrade all users to E5, but only if the cost increase is negligible.” Often, Microsoft will come back with a steeply discounted E5 offer to make that happen.
6. Right-Size Your Commitments (Avoid Paying for Shelfware)
Microsoft’s agreements often encourage enterprise-wide, all-in commitments – but you must carefully consider how much you truly need to commit. Overcommitting license quantities or scope is a common pitfall that leads to “shelfware” (licenses you paid for but don’t use).
Remember that under a traditional EA, once you commit to a certain number of licenses, you generally cannot reduce that number until the end of the term. So, be conservative and precise in your initial order. If you have 10,000 employees but only 8,000 use a particular product, don’t agree to license all 10,000 “just in case.” It’s easier to add licenses later (via true-up) than to shed them.
Consider Microsoft’s “platform commitment” carefully: licensing every user/device with a product (like Windows Enterprise or Office Pro) brings a discount, but it locks you into covering everyoneif your organization might shrink or has divisions that don’t require a certain product, see if you can carve them out or use a smaller enrollment for those groups.
Microsoft’s guidance acknowledges the risk: if your user count drops, a perpetual EA offers “absolutely no way to reduce” those licenses mid-term, potentially leaving you with significant shelfware. As a real example, a company that downsized by 15% in year 2 of an EA had to keep paying for those 15% excess licenses until renewal – a costly lesson in overcommitment.
To avoid this, some enterprises opt for an Enterprise Agreement Subscription (EAS) instead of a standard EA since subscriptions can be reduced at the anniversary. Others negotiate flexibility for specific scenarios (like reducing licenses if a business unit is divested—see strategies 7 and 8).
The bottom line: Commit to the minimum needed to meet your objectives and qualify for discounts, but resist any pressure to overcount. It’s better to renew or add later than to be stuck with three years of unused licenses.
7. Negotiate True-Up and True-Down Flexibility
A hallmark of the EA is the annual true-up process – you can add licenses as your usage grows and pay for them at year’s end. However, standard EAs do not allow true-down (reducing license counts mid-term) except at renewal. Ensure you use the true-up to your advantage (deploy new software when needed and only pay at the next anniversary), but also seek flexibility for downward adjustments where possible.
If your organization expects fluctuations – for example, a potential divestiture or downsizing in year 2 – raise this during negotiations. Microsoft’s standard stance is that perpetual EAs can’t drop licenses mid-term, but exceptions can be made for large deals. For instance, consider an Enterprise Agreement Subscription (EAS) instead of the regular EA if reduction is important – EAS does allow decreasing licenses at each anniversary.
In fact, under an EAS (subscription model EA), you have some ability to reduce license counts annually, whereas a perpetual EA locks you in until renewal. You can also try to negotiate a custom clause, such as converting certain perpetual licenses to subscriptions mid-term or terminating a portion of licenses if a specific event occurs (like the loss of a business unit).
These terms aren’t standard, and Microsoft may resist, but it might be open to a compromise for a strategic customer. One negotiation example: a company anticipating layoffs negotiated the right to drop up to 10% of its Office 365 licenses in year 2 without penalty—not a typical term, but they made it a condition of signing a large EA.
Even if Microsoft won’t broadly grant true-down rights, they might agree to a shorter term (e.g., a 2-year EA) or a narrower enrollment to address your need. At minimum, plan your true-down at renewal (see next strategy) to avoid carrying over unused licenses.
In summary, push for as much flexibility as you can on license counts—the ability to scale down can save you a fortune if your circumstances change.
8. Use Renewal as a Leverage Point to Optimize
The end of your EA term is your golden opportunity to reset and remove unnecessary costs. Microsoft will typically come to the table eager to renew you – when you have maximum leverage to negotiate better terms or walk away. Plan a “true-down” at renewal by identifying any licenses or services that are not fully utilized and dropping them from the renewal.
Many enterprises achieve double-digit percentage savings by doing this housekeeping. For example, one company discovered that only 600 of its 1,000 Visio licenses were actively used; at renewal, they renewed just 600 and saved the cost of 400 licenses in the future. Similarly, audit your usage of higher-cost editions (E5, etc.) – if certain users aren’t using the advanced features, consider renewing them on a lower tier (E3) to cut costs.
Signal to Microsoft that renewal is not a given: let them know you are evaluating your needs from the ground up and considering all options (including not renewing certain components or exploring CSP/MCA alternatives for some services). This puts pressure on them to make the renewal attractive for you. Use the renewal to negotiate any new needs – e.g., if you plan to adopt a new Microsoft product, bundle it into the renewal negotiation rather than add it later at list price.
Another lever at renewal: Microsoft’s sales reps are evaluated on on-time renewals, and delays can hurt their commission. You gain leverage if you’re willing to let the clock run close to expiration (carefully) or even lapse, but usually, you won’t need to go that far if you’ve prepared alternatives.
The key is holding more cards at renewal time – you can walk away or re-scope your agreement. Microsoft knows this and often provides better discounts or extra perks to secure a renewal.
Leverage this moment fully: don’t simply rubber-stamp the same deal for another term. Instead, treat renewal as a chance to renegotiate from scratch, eliminating waste and baking in better terms for the next period.
9. Secure Price Protections and Caps
Negotiating price holds and caps can protect your organization from future price increases. Microsoft EAs typically lock in pricing for the 3-year term on the initial products licensed, meaning there will be no price hikes on those licenses during the term. Make sure this standard price lock is explicitly confirmed in your contract.
More importantly, plan for what happens after the term or for additional purchases: without negotiated protections, your costs could jump at renewal or new licenses. Push for clauses that cap the rate of price increase on renewals or future true-ups. For instance, ask for an agreement that renewal pricing will not exceed a certain percentage above your current pricing or that you can renew optional years 4–5 at the same rates.
While Microsoft may not always agree, even a soft commitment or an agreed framework for future pricing can help. Remember that as soon as your EA term ends, the default is that prices will reset to the then-current list (which may be higher). A savvy negotiator anticipates this and addresses it up front. One strategy is to negotiate price bands for expected growth: e.g., if you expect to add 500 users in year 2, negotiate their license unit price now, rather than at true-up time.
Another tactic is multi-year price protection on cloud services – Microsoft has been known to include a cap (say 5% annual increase limit) on certain subscription renewals for key clients. Also, watch out for escalation clauses – sometimes, Microsoft might offer an extra discount in year 1 that tapers up in years 2 and 3 (effectively a built-in increase).
Scrutinize the pricing across all years and ensure any such escalators are removed or minimized. The goal is to ensure cost predictability and shield your budget from unpleasant surprises.
As Gartner advised, try to lock in the maximum price you’d pay upon renewal or expansion – get it in writing. By negotiating strong price protections, you’ll minimize the risk of vendor lock-in through sudden cost hikes after you’re committed.
10. Balance Cloud vs. On-Prem Licensing to Avoid Double Costs
As you transition to Microsoft’s cloud services, be careful not to double-pay for overlapping capabilities. Many enterprises have a mix of on-premises licenses (with Software Assurance) and cloud subscriptions. Microsoft’s default programs sometimes lead to paying for both during transitions unless you actively manage it. Negotiate a plan for your on-prem to cloud shift that maximizes value.
For example, if you’re moving from Exchange Server CALs to Exchange Online (part of Office 365), ensure you’re not simultaneously paying full price for both. To offset this, Microsoft offers “bridge” licenses and transition SKUs (like CAL Bridge for Office 365), but you may need to ask for them and structure your agreement accordingly. One strategy is to phase cloud adoption: keep some users on-premises and some in the cloud, and only pay for what each group uses.
During negotiations, highlight any overlap period needed and seek discounted pricing or credits. For instance, if it will take 6 months to migrate all users to Microsoft 365, negotiate so that for those 6 months, you’re not charged fully for both the legacy and new licenses – perhaps by starting cloud subscriptions later or using trial/flex periods.
Additionally, consider license reallocation: as you add cloud subscriptions, you might be able to drop equivalent on-prem licenses at renewal (or vice versa) rather than carrying both. Microsoft’s sales motions heavily push cloud, sometimes threatening higher costs or reduced support for sticking with on-prem. Be ready with a cost comparison: If Microsoft’s cloud proposal doesn’t financially beat your optimized on-prem scenario, show them the analysis and ask them to do better (either cut cloud prices or maintain better pricing for on-prem).
The key is to stay in control of the mix—use the cloud where it makes sense and get credit for your existing investments. Don’t let Microsoft upsell you to the cloud in a way that costs your on-prem assets. A balanced approach will yield the best overall value and prevent vendor tactics that try to penalize you for not moving entirely to the cloud.
11. Plan a Gradual Transition to Microsoft 365 and Cloud Services
If moving to cloud services like Microsoft 365 (M365) or Azure is part of your roadmap, structure your agreement to support a smooth transition. Microsoft will gladly sell you cloud subscriptions, but you should negotiate the terms of that transition to avoid lock-in and extra costs.
One useful tactic is leveraging Microsoft’s transition licensing programs. For instance, when shifting from traditional Office licenses to Microsoft 365, use the offered “From SA” (Software Assurance) SKUs or bridging licenses that recognize your existing investment. These transitional licenses often come at a discounted rate because you’ve already paid for on-prem software up to a point.
Ensure your EA includes provisions for a hybrid period where you might have some users on legacy licenses and some on M365. You want the flexibility to switch users from one to the other without financial penalty. Negotiate for swap rights or credit, e.g., reducing on-prem licenses in proportion to added cloud subscriptions within the term.
Also, clarify the support for hybrid use – Software Assurance normally allows running dual use (on-prem and cloud) for a time; ensure this is understood so you can pilot and migrate gradually. From a timing perspective, you might negotiate to start certain cloud subscriptions partway through the EA term (coterminous with your migration schedule) rather than paying from day one if you won’t use them immediately.
Some organizations have negotiated deferred start dates or ramp-up pricing. Another important aspect is training and adoption support: moving to services like Teams, OneDrive, or Power Platform might require user training or technical setup.
It’s reasonable to ask Microsoft to include some assistance, whether in Deployment Planning Services, fast-track benefits, or funding for a partner to help with migration. Real-world example: A global manufacturer negotiated as part of their M365 EA that Microsoft would provide an onsite engineer for three months to assist with their email and SharePoint Online migration—this was written into a side agreement at no extra cost, as it helped ensure successful adoption.
Planning and negotiating the transition details turn the potentially tricky migration period into a well-supported, cost-efficient process. Don’t let the move to the cloud just “happen”—manage it proactively in your contract.
12. Maximize Azure Savings with Hybrid Benefit and Reserved Instances
For any Azure cloud consumption under your EA/SCE, take full advantage of programs that dramatically reduce costs – and ensure your contract doesn’t unintentionally limit them. The Azure Hybrid Benefit (AHB) allows you to use your existing Windows Server or SQL Server licenses (with active Software Assurance) to cover the cost of those licenses in Azure VMs, so you pay only the base compute rate.
This can yield huge savings – Microsoft advertises up to 82% savings when combining the Azure Hybrid Benefit with a 3-year reserved instance on Windows VMs. Ensure you understand and plan to utilize AHB for all eligible workloads: it’s essentially “free money” if you already own Windows/SQL licenses.
Reserved Instances (RI) are another powerful tool: committing to a one-year or three-year reservation for Azure resources (like virtual machines or databases) can save as much as 70-72% versus pay-as-you-go pricing.
In negotiation, emphasize that your pricing expectations assume the use of RIs and AHB—Microsoft won’t object, but it sets the tone that you are a cost-conscious customer. Also, negotiate flexibility around RIs if possible (e.g., the ability to exchange or cancel reservations with minimal penalty, which Microsoft allows under certain conditions).
When you forecast Azure spend for an EA, right-size the commitment and insist on discounts aligned to that commitment level. Under an SCE or Azure MACC (Microsoft Azure Consumption Commitment), higher annual spending should confer higher discounts—for instance, committing $20M/year in Azure might yield around a 15% discount on consumption, whereas $5M/year might yield 5%.
Negotiate those percentages just like you would a discount on licenses. If Microsoft knows you will optimize with AHB and RIs, they may be more inclined to offer a larger Azure consumption discount or credit to secure your cloud spend. Also, ask about Azure credits or free services: Microsoft often has incentive funds for new Azure projects (e.g., $X in Azure credits or service hours to help you onboard).
Don’t leave those on the table. By combining AHB and RIs and negotiating Azure discounts, one enterprise managed to run a significant cloud footprint at less than half the cost compared to on-demand rates. As part of the EA, you aim to optimize every possible cloud cost efficiency.
Microsoft’s cloud margin is large enough to grant concessions if pushed. Make it clear that your Azure adoption (and growth) depends on achieving these efficiencies.
13. Weigh Multi-Year Commitments vs. Annual Flexibility
Microsoft EAs are traditionally three-year commitments. This multi-year term brings benefits – price protection and the ability to spread payments annually – but also reduces flexibility. Consider what term length makes sense for your organization.
If your environment is relatively stable and you want predictable pricing, a three-year EA (or even a longer commitment, if Microsoft offers, though the standard is 3) can be ideal. It locks in your discounts and insulates you from price hikes for that period.
On the other hand, if you anticipate significant change in the next couple of years (organizational changes, technology shifts, etc.), you might negotiate a shorter term or opt for an EA Subscription, which can be as short as 1 year or 2 years in special cases.
Microsoft has been known to agree to two-year EAs or allow a one-year extension if it aligns with both parties’ needs (for instance, to sync with a fiscal year or await a product launch). Don’t assume you are strictly bound to a three-year cycle—it’s standard but not unchangeable. Also, negotiate the payment structure that works for you: EAs typically allow annual payments rather than upfront, which helps with the budget.
Ensure that remains the case, and if cash flow allows, see if Microsoft would give a slight discount for upfront payment (they sometimes will, though it’s not common—but asking doesn’t hurt). Conversely, if you need to align payments to a fiscal schedule (say, a shift from December to June), negotiate that as part of the deal.
Another angle is opt-out or early termination options, which are very tough to get (Microsoft strongly resists). Still, some customers manage clauses for termination in case of, e.g., a merger or government budget non-appropriation. If a multi-year commitment is risky, raise that concern and explore remedies.
For example, one public-sector client got an opt-out clause for years 2 and 3 if their funding was cut – a rare but important protection for them. In general, match the term to your confidence in the future: longer commitments can yield slightly better pricing, but shorter commitments give you flexibility to renegotiate sooner. If you go multi-year, just be sure you’re comfortable with the obligations – and have those price protections locked in.
14. Tailor the Scope: Enterprise-Wide vs. Departmental Enrollments
Microsoft licensing programs allow you to scope an agreement to the whole enterprise or to specific affiliates or departments. Use this flexibility to your advantage. Decide whether a single enterprise-wide enrollment or multiple smaller enrollments best suits your organization.
An Enterprise-wide EA (covering all users/devices in the company for certain products) often yields the highest discounts and simplest management. However, it assumes a one-size-fits-all approach. If your company has distinct divisions or subsidiaries with different needs, you might consider separate enrollments (or selectively excluding a unit from a product commitment).
For example, suppose one business unit uses very little Microsoft software. In that case, you might not include them in the EA’s enterprise products count; instead, you may license them via alternative means (like a separate agreement or CSP) to avoid inflating your counts.
On the other hand, aggregating all parts of your organization into one EA can boost your volume tier (moving you to Level B, C, or D pricing based on a higher combined seat count), thus increasing discounts.
Microsoft will generally accommodate reasonable requests here, especially for large customers (they can include custom amendments for unique scenarios). The goal is to avoid a situation where part of your company is over-licensed because it was lumped in with a larger group.
15. Negotiate Enhanced Support and Escalation Terms
Support quality and responsiveness can be just as critical as license cost for large enterprises. Use your EA negotiation to improve support provisions. While Microsoft’s Premier/Unified Support is usually a separate offering, your leverage during an EA deal can influence support arrangements.
As noted in strategy 5, consider bundling support renewal with the EA to get a better price on one or both. Beyond price, negotiate escalation paths and dedicated support resources. For instance, request that Microsoft provide a named account service manager or cloud solution architect to your account as part of the partnership. Large EA customers often can get access to Microsoft’s higher-tier support contacts, but you might have to ask for it formally.
If you encounter mission-critical issues (say a severe outage in Azure or a security incident in O365), having a pre-defined escalation process to Microsoft engineering can be invaluable. During negotiations, emphasize your expectations for support: e.g., “Given our enterprise commitment, we expect priority support response for critical incidents.” You can also negotiate support credits or training: Microsoft might include several support hours or training vouchers as an incentive.
Ensure that any Software Assurance benefits (which come with EA, like support incidents, planning services, training days) are listed and maximized for you. If those default benefits have changed (Microsoft has evolved SA benefits recently), negotiate equivalent value – for example, if training vouchers are no longer standard, ask for some free Microsoft Learn or Enterprise Skills Initiative packages for your IT staff.
Moreover, address the cost of support: Microsoft Unified Support can be very expensive (often tied to a percentage of your license spend). Customers have successfully pushed back by negotiating that percentage down or getting Microsoft to throw in some extra support at no cost to offset increases.
One strategy: if your EA spend is growing (e.g., due to cloud), ask Microsoft for support fee caps or discounts to keep the relationship affordable. Microsoft may offer an ”investment” in your success by reducing support costs or providing migration assistance (a support-like benefit).
A real example involved an enterprise expanding Azure usage; they negotiated an arrangement where Microsoft provided $100K of consulting services from a partner to assist with cloud architecture – effectively support funding – as part of the EA deal. Document any support promises in the contract or a side letter so they are honored. By ensuring robust support terms, you get licenses at a good price and the backing to use those licenses effectively over the EA term.
16. Gain Influence on Microsoft’s Roadmap and Future Products
As a large customer, you have the power to influence Microsoft’s product roadmap and secure access to new technologies – and your EA negotiation is a moment to reinforce that. While not a contractual line item like pricing, you can negotiate for strategic partnership perks.
For example, if you know Microsoft will release a new product or feature next year that is important to you (say a new AI service or a major Dynamics 365 module), bring it up. You could get an agreement (even in an email or meeting minutes) that you can adopt that new product at a similar discount level as your EA pricing.
In one case, a company interested in a then-unreleased Power Platform feature negotiated an understanding that once available, they could add it to their EA mid-term with a 20% discount consistent with their current pricing. Microsoft might not put this explicitly in the EA contract, but reps can write an email or quote addendum assuring the pricing.
Additionally, ask for participation in Microsoft’s customer advisory boards or preview programs. This can be as simple as “We’d like a quarterly roadmap review with Microsoft’s product team for Azure” or “We want to join the private preview for the new Teams integration.”
Microsoft often obliges key customers with these requests because it’s mutually beneficial: you get early insight or input, and they get feedback and a committed adopter. You can also negotiate investment funds for new technology adoption – Microsoft sometimes allocates funds or partner services vouchers if you agree to be an early adopter reference for a new product.
Another angle is ensuring that contract terms won’t hinder innovation: negotiate broad rights to deploy Microsoft technologies within the scope of the agreement so you’re not constantly asking for permission. For instance, if you plan on doing a lot of Dev/Test in Azure, ensure your EA includes the Dev/Test pricing benefits. Or, if you want to run Microsoft software in AWS or another cloud (via License Mobility), ensure you have Software Assurance on those licenses to allow it or negotiate that flexibility.
Ultimately, making Microsoft feel that you are a strategic partner (not just a customer) can yield intangible but valuable benefits: executive sponsorship, faster support escalation (as mentioned), and maybe even influence on feature requests. Microsoft deeply values big accounts and often has executives engage on large EA deals – take that opportunity to voice your company’s needs for the future.
As a negotiation outcome, you might not get a contract clause titled “roadmap influence.” Still, you can come away with commitments like being added to an Office 365 Advisory Council or receiving architecture design sessions for upcoming products. These give you a say in Microsoft’s direction and ensure your enterprise’s needs are heard. If nothing else, you set the tone that you expect to be treated as a priority account with input into the partnership.
17. Plan for Compliance and Licensing Audits
Large enterprises are frequently subject to software compliance audits, and Microsoft is no exception. Many customers find that if they choose not to renew an EA, an audit might follow soon after, or audits may occur during long agreement periods. Go into your EA negotiation with an audit strategy: ensure you comply to the best of your knowledge (do an internal true-up of usage before talks), and consider negotiating audit-related terms.
For instance, you can ask for advance notice clauses (e.g., Microsoft must give 60-90 days’ notice before an audit) or the ability to use a third party or your internal audit results instead of Microsoft conducting one. Very large customers have successfully gotten Microsoft to agree to gentler audit provisions, such as only auditing if serious compliance issues are suspected or using the annual true-up data as the basis of trust to avoid separate audits.
While Microsoft may not remove its audit rights entirely (they’re typically reserved in the MBSA), bringing it up shows you are savvy and want a cooperative approach to compliance. Also, clarify how compliance verification will work: Microsoft’s MBSA has a section on verifying compliance, but you can discuss how that would play out in negotiations.
For example, if you have just completed a voluntary license assessment with a SAM partner, you might negotiate that Microsoft won’t audit for a year as that assessment should suffice. Another aspect is license assignment flexibility – ensure you can reassign licenses as needed (within the rules) to remain compliant as you reorganize or move workloads. If you foresee any compliance gray areas (like a complex virtualization setup), discuss them and possibly document Microsoft’s acknowledgement of your approach.
Being proactive about compliance can save you money. One enterprise identified 500 unused Visio installations before renewal and reclaimed those licenses, avoiding an audit finding and allowing them to true down at renewal. Ensure you also budget for true-ups properly so you’re not caught short and out of compliance.
Finally, consider investing in license management tools and/or a third-party audit defense service if your environment is very complex – Microsoft’s records can have errors, so you want to be able to demonstrate your license position clearly if questioned.
In summary, treat compliance as part of the negotiation conversation: you want to set a cooperative tone (“We intend to remain compliant and will do X, Y, Z to ensure that”) and gain assurances (“In return, Microsoft will handle any audit in a customer-friendly way”).
This reduces the risk of surprises down the road.
18. Insist on Clear Contract Terms (Get Everything in Writing)
You might hear many promises and assurances from Microsoft representatives throughout the negotiation process. All important terms must be in the written contract (or its amendments). Do not rely on verbal promises.
Microsoft’s licensing agreements are complex; if they are not written, they do not exist effectively. For example, if a sales rep says, “We’ll give you 100 free Azure developer licenses,” make sure that is reflected in the final paperwork or an email from Microsoft that you countersign.
We still see situations where an account executive promises a future discount or a flexible term, but when the contract is generated, it’s standard—and the promise is forgotten or the rep has moved roles. As one licensing expert said, “If it’s not in the agreement, it doesn’t count.”
During negotiations, maintain a running list of agreed points and cross-check against contract drafts. Microsoft’s documents (like the EA terms, Product Terms, etc.) can be labyrinthine, so work with your legal team or a licensing specialist to ensure any custom terms you negotiated are properly added. Common areas to double-check include discount percentages, special price protections, any flexibilities (like an agreed true-down or a service swap), software assurance benefits, cloud service terms (like data residency or retention periods), and any services or credits included.
If you negotiated an “understanding” that isn’t a formal contract term (e.g., Microsoft will treat you as a priority for a certain preview program), at least get an email or formal letter outlining it. Use the amendment process for everything else: Microsoft has standard EA terms, but they will attach amendments for non-standard concessions you’ve won. Review these carefully – sometimes wording can be subtle and limit the scope of a concession.
Don’t be afraid to iterate on the language; Microsoft expects large customers to redline the agreement. Also, ensure there are no unpleasant surprises in the fine print: check for any auto-renewal clauses, retroactive charges, or linkages (for example, one client found language that if they reduced Office 365 licenses, it would invalidate a discount on Windows licenses—they had that removed).
Engage your legal counsel early with the drafts; they can help spot issues and ensure clarity. Finally, archive all final signed documents and communication in a known repository internally – you’ll need to refer to them throughout the EA term. By dotting the i’s and crossing the t’s, you protect the deal you worked so hard to negotiate and prevent misunderstandings later on.
19. Engage Third-Party Expertise and Benchmarking Services
Negotiating a Microsoft EA can be daunting—Microsoft’s licensing rules and sales tactics are specialized. Don’t hesitate to bring in outside experts to level the playing field, especially for very large or complex agreements. Licensing consultants or advisory firms can provide market intelligence on discount ranges and contract best practices and even directly help in negotiations.
These firms have experience from many EA deals and can tell you, for example, “Company X of similar size got 25% off on Azure and a conditional true-down clause – here’s how we can aim for that.” They also know Microsoft’s fiscal calendar and approval processes, which can help strategize requests that are likely to be accepted.
Some organizations worry that involving a third party might irritate Microsoft. Still, in reality, Microsoft is used to it – many of their customers use advisors, and Microsoft’s negotiators will remain professional. The key is to pick a reputable advisor who can work cooperatively with your team and not alienate the vendor (most will strike that balance). If budget is a concern, note that consultants often pay for themselves via the savings they help obtain.
For a multi-million-dollar EA, even a 5% improvement can save hundreds of thousands. Some consultants work on a success fee (a cut of savings), which can align incentives for a better deal. In addition to consultants, you can use benchmarking reports or tools – some IT asset management firms provide data on average pricing, or you might use peer networking (informally asking other CIOs what they negotiated).
There are also legal firms specializing in software contracts that can ensure you don’t miss legal avenues to improve terms. If you handle the negotiation internally, consider a one-time consultation or training session. Many firms offer an EA negotiation workshop or a licensing optimization assessment for a fixed fee, which can provide you with a roadmap and specific recommendations to execute.
Another external resource is Microsoft’s Licensing Solution Providers (LSPs)—the resellers/partners transacting the EA. While they ultimately represent Microsoft sales, a good LSP can advise you on how to structure the deal (just remember that their advice may be colored by their relationship with Microsoft).
Lastly, involve your legal counsel early – even if they aren’t Microsoft experts, they will ensure any unusual terms are properly vetted. In summary, going alone is not your only option. Using experienced negotiators and data can significantly strengthen your position and give you confidence that the outcome you achieve is truly the best available.
20. Build a Cooperative Relationship (But Be Willing to Walk Away)
Negotiation isn’t just about the contract on paper; it’s also about the relationship between you and Microsoft. Strive to build a trust-based, cooperative relationship with Microsoft’s account team – it can significantly influence the tone and outcome of negotiations. Treat the negotiation as a partnership discussion, not a hostile battle.
Establishing rapport (for example, acknowledging shared goals like successful software implementation at your company) can lead to a more productive dialogue. Microsoft is more likely to grant concessions if they view you as a reasonable, long-term partner rather than an adversary. You must also stand firm on your key interests and be prepared with a Plan B (Best Alternative to a Negotiated Agreement).
Know your BATNA – What will you do if the deal isn’t acceptable? It might be extending your current agreements monthly via CSP, switching part of the scope to another vendor, or even walking away from an EA entirely and using perpetual licenses or cloud subscriptions differently. Having a credible alternative gives you confidence in negotiations, and Microsoft will sense that confidence.
This is the classic “be willing to walk away” advice – often, the party who can walk away has the upper hand. In practice, very few large enterprises will drop Microsoft altogether. Still, you could, for instance, decide not to sign an EA and instead use a smaller Cloud Solution Provider agreement for a year while re-evaluating.
Microsoft wants to avoid that scenario for large customers, so it uses that (quietly) as leverage. Throughout the process, maintain professional courtesy; if talks hit a stalemate with your account manager, consider escalating to Microsoft executives (regional director or higher-up) – sometimes a higher authority can unlock a concession or creative solution.
Also, ensure both sides practice good communication: recap understandings in writing and encourage an atmosphere of “win-win”. If you reach an impasse on a term, try to understand why Microsoft is resisting – maybe there’s an alternative way to satisfy the underlying need.
By building a strong relationship, you might find Microsoft volunteers who can offer extra help or flexibility you didn’t even explicitly negotiate (for example, giving you a temporary license boost for a project or inviting you to a technology preview event). Finally, after the deal is signed, continue to cultivate the relationship – the best negotiation outcomes often come from customers who are seen as aligned with Microsoft but also savvy and assertive about their needs.
In summary, be cordial and collaborative but confident and unafraid to explore other options. This balance of relationship and resolve will help you get the best EA/SCE deal possible.
