How Redress Compliance helped a 3,000-employee Australian telecommunications company save 15% on Microsoft spend by cleaning up 150 idle M365 licences, negotiating reseller margins down 5%, right-sizing Azure VMs, implementing licence governance processes, and proving CSP superiority over an Enterprise Agreement — all while maintaining month-to-month flexibility.
The client is an Australian telecommunications company with 3,000 employees nationwide. The company had historically purchased Microsoft licences and cloud services through the Cloud Solution Provider (CSP) program via a local IT reseller. This CSP model allowed them to pay monthly for licences — primarily Microsoft 365 and some Dynamics 365 seats — which suited their need to scale licences up or down as staff count changed with seasonal project-based work.
However, after several years, the spend through CSP had grown substantially and the company lacked insight into whether it was over-provisioned. Monthly bills were creeping up, and Microsoft had approached them about possibly moving to an Enterprise Agreement (EA) given their size. The company was hesitant to lose the flexibility of CSP. Redress Compliance was brought in to analyse the situation, reduce costs by at least 10–15%, and ensure the company was not paying for unused licences — all while retaining CSP's month-to-month agility.
The telco faced a combination of cost visibility gaps, licence sprawl, vendor pressure to switch models, and governance shortfalls that had allowed CSP spend to drift well beyond what was justified by actual usage.
Monthly CSP invoices were complex, listing numerous line items for various licences and subscriptions. The IT finance team struggled to understand exactly what they were paying for and why costs fluctuated. Unlike an EA where costs are negotiated and locked, CSP costs varied as licences were added and Microsoft price increases flowed through automatically — catching the company off guard when M365 prices rose mid-year.
Since CSP makes it easy to add licences, department managers had spun up extra Power BI Pro licences and Azure services via the CSP portal without central oversight. There was concern the company was paying for resources nobody was using — VMs running in Azure that had not been shut down, M365 licences still assigned to employees who had left, and project-specific licences never removed after projects concluded.
The company's CSP reseller was charging a margin on top of Microsoft's prices (standard in CSP), but the company wondered whether that margin was too high given their volume. The reseller was also providing minimal value-added services — essentially acting as a billing pass-through rather than an active optimisation partner. The telco was paying for a reseller relationship that was not delivering commensurate value.
Microsoft was pushing the company toward an Enterprise Agreement, suggesting volume discounts that could reduce costs. But the telco's seasonal project-based workforce meant licence counts fluctuated significantly quarter to quarter. An EA would lock them into a 3-year minimum commitment at a fixed baseline — potentially forcing them to pay for licences they did not need during off-peak periods. The company needed clarity on which model truly delivered the best economics.
Redress Compliance executed a four-phase strategy combining deep spend auditing, reseller renegotiation, governance process implementation, and strategic EA-vs-CSP modelling to transform the telco's Microsoft economics.
Redress examined three months of CSP invoices and cross-referenced them with actual active users and Azure resource usage. The audit uncovered significant inefficiencies: approximately 150 Microsoft 365 licences were paid for but either unassigned or assigned to departed employees (a result of rapid growth phases without scale-back during attrition). They also found the company was paying premium CSP rates for Azure services that could be prepaid at lower cost, and identified 10 Azure VMs running at low utilisation that should be shut down or right-sized. Redress recommended immediately removing the 150 idle licences and converting a portion of Azure usage to reserved instances for steady-state workloads.
Rather than abandoning CSP, Redress saw an opportunity to optimise it. They approached the reseller with the audit findings and a clear signal: the company now understood its usage and would consider moving to another reseller or licensing programme if costs were not improved. Redress negotiated a reduced reseller margin on M365 licences, delivering approximately a 5% reduction on those prices. They also secured a 12-month fixed price for core M365 SKUs, protecting the company from Microsoft's impending price hikes. Redress additionally explored a hybrid approach where some Azure and Dynamics 365 modules could be billed via Microsoft's MCA at a discount, while other products remained on CSP.
To truly leverage CSP's flexibility, Redress helped establish internal controls. They created guidelines requiring that all project-specific licences have an "owner" and an expiration date — when IT adds 50 licences for a project team or contractors, those licences are tagged to the project and a review is scheduled when the project ends. Redress configured alerts in the CSP portal to notify IT if the total licence count exceeds thresholds or Azure spend in a category exceeds monthly limits. They also provided training to department heads on requesting licence removals when people roll off projects — making flexibility a shared responsibility, not just IT's job.
Redress ran a comprehensive scenario analysis comparing a 3-year EA at current usage (with typical discounts) versus the newly optimised CSP. The analysis showed that CSP was still more cost-effective given the company's need to fluctuate licensing seasonally — an EA would force payment for a higher baseline even in slow periods. With the CSP optimisations, the company was already realising the 10–20% savings that other companies achieve by switching from EA to CSP. The company's leadership decided to stay on the optimised CSP model, confident it could be cost-efficient with proper oversight.
Redress Compliance provides independent microsoft advisory services — fixed-fee, no vendor affiliations. Our specialists help enterprises optimize EA renewals, reduce Azure spend, and negotiate better terms across M365, Copilot, and more.
Explore Microsoft Advisory Services →| Metric | Before (Unmanaged CSP) | After (Optimised CSP) |
|---|---|---|
| Monthly Microsoft Spend | Creeping up with no visibility | 15% reduction — significant annual savings |
| Idle Licences | ~150 M365 seats paid but unused | Zero — all licences mapped to active users |
| Azure Resources | 10+ VMs running at low utilisation | Right-sized + reserved instances for steady-state |
| Reseller Terms | High margins, passive billing pass-through | 5% margin reduction + 12-month price lock + active optimisation partnership |
| Governance | No oversight, no alerts, no expiry tracking | Project tagging, automated alerts, quarterly reviews |
| Licensing Model | EA pressure from Microsoft (3-year lock-in) | Optimised CSP retained — full month-to-month flexibility |
Within two months of implementing Redress's recommendations, monthly Microsoft costs dropped by approximately 15%. This combined the licence cleanup (150 removed), reduced reseller margins, and smarter Azure resource management. The savings did not come at the expense of any capability — no one lost software they truly needed. The freed-up budget was partially reinvested in a new customer analytics initiative.
The company retained and enhanced its ability to flexibly adjust Microsoft usage. When a major project concluded and 80 contractors departed, IT promptly removed 80 licences — an action that previously would not have occurred for months. When gearing up for a new service launch, they added licences and Azure capacity confidently, knowing they could remove them later without contractual hindrance. The finance team now finds costs much more predictable with alerts and quarterly reviews in place.
The company decided against an Enterprise Agreement, which they felt would reintroduce rigidity and potential waste. Instead, they doubled down on an optimised CSP model — paying for Microsoft services on a usage basis and managing that usage closely. If circumstances change (e.g., an acquisition doubles their size), they have all the data to evaluate an EA in the future with negotiation leverage from their optimised baseline. For now, their Microsoft costs scale with their business in near real-time.
"We always liked the idea of monthly pay-as-you-go, but we weren't using its potential until Redress Compliance showed us how. They combed through our cloud and licence usage with a fine-tooth comb and found savings we had no idea were there. In a matter of weeks, our Microsoft bills dropped by around 15%, and it's purely because we stopped paying for things we weren't using. We're more nimble now than ever — we can ramp up when we need to and ramp down just as fast, and now it reflects correctly in our costs. It's like going from driving without a dashboard to having full gauges and controls."
— CFO, Australian Telecommunications Company
The Cloud Solution Provider (CSP) program is a Microsoft licensing channel where organisations purchase licences and cloud services through a third-party reseller on a monthly subscription basis. Unlike an Enterprise Agreement (EA) — which requires a 3-year commitment with a fixed baseline licence count and annual true-up — CSP allows month-to-month adjustments. You can add or remove licences each billing cycle without penalty. CSP is typically purchased through a reseller who adds a margin, while EAs are negotiated directly with Microsoft at volume-discounted rates. CSP suits organisations with fluctuating licence needs; EAs suit those with stable, predictable usage and the scale to command deep discounts.
Very common. Because CSP makes it easy to add licences (often through self-service portals), organisations accumulate seats for new hires, contractors, and project teams — but rarely have processes to remove them when people leave or projects end. Industry data suggests 10–20% of CSP licences in mid-sized organisations are ghost seats: paid for but unused. In this case, 150 of approximately 3,000 M365 licences (5%) were identified as completely idle — a relatively modest ratio that still represented significant annual waste. The problem is compounded by the fact that CSP invoices list hundreds of line items, making it difficult to spot individual unused subscriptions without a systematic audit.
Yes. CSP reseller margins are not fixed by Microsoft — they are set by the reseller and are fully negotiable. Margins typically range from 5–15% above Microsoft's wholesale price, depending on the reseller's cost structure, the volume of licences purchased, and the value-added services provided. Organisations with 1,000+ seats have significant leverage because CSP resellers earn recurring revenue on every licence, making large accounts valuable to retain. In this engagement, the threat of moving to a competitor reseller or switching to Microsoft's MCA direct billing was sufficient to reduce margins by approximately 5% — with the reseller also agreeing to a 12-month price lock on core SKUs.
An EA typically makes more sense when an organisation has stable, predictable licence needs (minimal seasonal fluctuation), 500+ users on the same Microsoft products, and the ability to commit for 3 years. EAs offer deeper discounts (often 15–30% off list depending on volume) and direct access to Microsoft's enterprise negotiation teams. However, EAs require paying for a fixed baseline even if usage drops, true-ups only happen annually, and mid-term reductions are difficult. For organisations with project-based workforces, seasonal fluctuations, or rapid growth/contraction, CSP's month-to-month flexibility typically delivers better total economics — provided it is actively managed. The EA-vs-CSP decision should be modelled using actual usage patterns, not abstract pricing comparisons.
The Microsoft Customer Agreement (MCA) is Microsoft's modern purchasing framework that is replacing legacy EAs for many customers. Under MCA, organisations can purchase licences directly from Microsoft (rather than through a CSP reseller) with more flexible terms than a traditional EA. A hybrid approach — using CSP for some products and MCA for others — can be advantageous. For example, Azure consumption might be cheaper through MCA with reserved instances and enterprise discounts, while M365 licences might be more flexible through CSP for monthly adjustments. In this engagement, Redress explored this hybrid model and identified specific Azure and Dynamics 365 modules that could benefit from MCA pricing while keeping core M365 on CSP.
Azure reserved instances (RIs) allow organisations to pre-commit to specific VM sizes or services for 1 or 3 years in exchange for significant discounts (typically 30–60% off pay-as-you-go pricing). Many CSP resellers can facilitate reserved instance purchases within the CSP billing framework, meaning you get the discount while maintaining a single billing relationship. The key is to only apply RIs to workloads that are genuinely steady-state — VMs running 24/7 for core business services, for example. Applying RIs to project-based or seasonal workloads negates the savings if the workload is shut down. In this case, Redress first identified and shut down underutilised VMs, then recommended reserved instances only for the remaining steady-state workloads.
Effective CSP governance requires four elements: (1) Licence lifecycle management — every licence addition is tagged with an owner, project, and expected end date, with automated reminders to review when the end date approaches. (2) Threshold alerting — configure alerts in the CSP portal or through your reseller when total licence counts or Azure spend exceed predefined thresholds. (3) Quarterly reviews — a cross-functional review (IT, finance, department heads) of licence utilisation, Azure consumption, and cost trends, with action items to remove unused resources. (4) Departure-linked deprovisioning — integrate licence removal into the employee offboarding process so that when someone leaves, their licences are automatically flagged for removal within the next billing cycle.
Telecommunications companies with seasonal or project-based workforces should design their Microsoft licensing strategy around flexibility rather than volume discounts. This means: (1) Use CSP as the primary channel for licences that fluctuate (M365, project-specific tools, contractor seats). (2) Use MCA or reserved instances for steady-state infrastructure (core Azure services, always-on VMs). (3) Build seasonal patterns into budgets — if you know Q1 and Q3 are high-activity quarters, pre-plan licence additions and removals. (4) Negotiate fixed pricing with your CSP reseller to protect against mid-year Microsoft price increases. (5) Resist EA pressure from Microsoft unless your baseline (minimum year-round usage) is large enough to justify the commitment — the EA baseline should represent your lowest seasonal point, not your peak.
Redress Compliance helps organisations audit, optimise, and renegotiate Microsoft CSP agreements — eliminating waste while maintaining the flexibility your business needs.
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