How Redress Compliance helped a leading Argentine telecommunications company with 10,000 employees eliminate a 20% Azure overcommitment, downgrade 800 unnecessary E5 licences, reclaim 500 ghost accounts, negotiate currency protection against hyperinflation, and reduce total Microsoft EA spend by 15%.
The client is a leading telecommunications company headquartered in Buenos Aires, Argentina, with operations spanning mobile, broadband, and fixed-line services across South America. With approximately 10,000 employees serving millions of subscribers and annual revenue of approximately USD $1.5 billion (ARS 150 billion), the company is one of the largest telcos in the region and a significant Microsoft enterprise customer.
The telecom industry operates on razor-thin consumer margins with enormous infrastructure costs, making cost optimisation on every vendor contract a strategic priority rather than a mere procurement exercise. The company’s Microsoft estate was substantial and multi-dimensional. Microsoft 365 licences covered all corporate and regional office staff, predominantly E3, with approximately 1,000 users on E5 for IT, cybersecurity, and teams that had adopted Microsoft Teams Phone System for call centre operations. Azure formed the backbone of the company’s digital transformation: hosting internal applications, customer-facing services including AI-powered customer support bots, data analytics platforms, and development and test environments.
The existing EA was mid-term, but two converging pressures created urgency for proactive renegotiation. First, the company had launched a corporate-wide cost-cutting programme that required every business unit to identify savings. Second, the Azure commitment was approaching its renewal window, and the company’s cloud consumption team had identified that actual Azure usage was running significantly below the committed spend level. The CFO directed the IT leadership to engage Redress Compliance to quantify the waste, restructure the agreement, and negotiate terms that reflected actual business needs. For context on what drives Microsoft EA negotiations at this scale, see our Microsoft EA Optimisation Service.
The company was consuming only approximately 80% of its annual Azure commitment, a 20% gap representing millions of pesos in paid-but-unused cloud resources. The overcommitment stemmed from projections during the original negotiation that assumed a faster cloud migration pace than actually materialised, including a major analytics platform that was delayed by 14 months. In the absence of a downward adjustment mechanism, the company was locked into paying for capacity it did not use.
An audit of the Microsoft 365 estate revealed that approximately 800 users assigned E5 licences were not using the differentiating E5 features — primarily Microsoft Defender for Endpoint, Microsoft Purview advanced compliance tools, and Power BI Pro — that justified the E5 premium over E3. These users had been assigned E5 during a security modernisation project when the technical team had defaulted to the highest tier rather than performing role-based licensing analysis. The cost differential between E3 and E5 at enterprise volume represented a significant annual overspend.
A licence reconciliation exercise identified approximately 500 Microsoft 365 accounts that remained active and licensed despite the associated employees having departed the company. The accounts had not been deprovisioned through the standard offboarding process due to gaps in the IT service management workflow and inadequate integration between the HR system and Microsoft’s Active Directory. The 500 ghost accounts represented pure waste — licences being paid for with no associated productivity benefit.
Argentina’s economic environment introduced a dimension that does not typically appear in Microsoft EA negotiations. The company’s EA was denominated in USD, but its revenues and most of its operating costs were in Argentine pesos. The dramatic peso devaluation over the prior 24 months had caused the real cost of the Microsoft EA — measured as a percentage of revenue — to increase substantially, even though the USD-denominated contract value had not changed. The company needed to negotiate currency protection mechanisms or payment structures that reduced its exposure to further peso depreciation.
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Redress performed an independent analysis of the company’s Azure consumption data against the committed spend level. The analysis confirmed the 20% shortfall and identified the specific workloads and services where consumption was trailing projections. It also identified 15% of Azure spend that could be optimised through Reserved Instance purchasing for stable workloads that were running on pay-as-you-go pricing, and additional savings available through Azure Hybrid Benefit for on-premises SQL Server workloads being migrated to Azure SQL.
Redress conducted a role-based licence analysis across all 10,000 users. The analysis categorised each user by actual Microsoft 365 feature consumption, identifying which E5 licences were genuinely required for the security, compliance, and analytics features that justify the premium, and which could be safely downgraded to E3. The analysis also identified the 500 ghost accounts for immediate deprovisioning. The methodology aligned with the Microsoft Licensing Advisor practices documented in our Microsoft Knowledge Hub.
Redress negotiated with Microsoft to restructure the Azure commitment mid-term rather than at renewal. The negotiation achieved a reduction in the annual Azure commitment from the over-committed level to a figure aligned with actual consumption plus a 10% growth buffer, with provisions for upward adjustment at the renewal anniversary if consumption growth accelerated. Microsoft agreed to the mid-term adjustment in exchange for a 12-month extension to the overall EA term — an outcome that required Redress to model the financial trade-off carefully to ensure the extension economics were favourable.
Redress negotiated a payment restructuring arrangement that provided partial ARS indexation for a portion of the company’s Microsoft 365 seat costs, reducing exposure to further peso depreciation. The arrangement was structured within Microsoft’s existing commercial flexibility for emerging market customers, a mechanism that is not publicly advertised but is available for negotiations at sufficient scale and with appropriate commercial justification.
This engagement illustrates several principles that apply broadly to Microsoft EA negotiations for large enterprises. The combination of Azure overcommitment, licence overstocking, and ghost accounts is common in organisations that have grown their Microsoft estate rapidly during digital transformation programmes without the governance processes to keep actual usage aligned with contracted commitments.
The currency protection outcome demonstrates that Microsoft has more commercial flexibility than standard EA terms suggest, particularly for large customers in emerging markets facing genuine currency risk. Access to this flexibility requires both the knowledge that it exists and the negotiation approach to unlock it — which is why independent advisory provides value that internal procurement teams, who lack cross-client visibility into what Microsoft has agreed to elsewhere, cannot replicate alone.
For organisations facing similar Microsoft EA challenges, the starting point is always a forensic audit of actual consumption versus committed spend across Azure, Microsoft 365, and any other EA components. Our Microsoft EA Optimisation Service provides this analysis as the first step of any engagement. For a detailed guide on the mechanics of Microsoft EA negotiations, see our Microsoft Knowledge Hub.
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