Contents
Key takeawaysProgram fit versus discountHow the MPSA worksWhat our reviews showedThree year cost exampleOpen Value and the SCEWho is in the wrong programChecking your own positionAccount team linesWhat to do nextFAQThe deepest discount and the right program are separate questions. A discount is priced in points, while the program decides what you can stop paying for when headcount falls, and for flat or shrinking organizations that is usually worth more.
- Half carried a commitment they no longer needed. In roughly half the Microsoft agreements we reviewed, the EA discount sat on a commitment the customer no longer needed, so the flexibility lost outweighed the points saved.
- Program choice sets three things. Price level, true up mechanics and the ability to scale down, and only the first of them comes up in a discount conversation.
- MPSA carries no enterprise commitment. It is a single transactional agreement that does not expire, covering products and affiliates for organizations with 250 or more users or devices.
- Online services lost their level discount. From November 1, 2025, online services in the EA and MPSA carry one price across Levels A to D, applied at your next renewal.
- The SCE repeats the EA commitment on servers. It requires full Software Assurance coverage of each committed product family, so it only pays on a stable server and cloud base.
- Headcount direction decides. Establish whether the business is growing, flat or shrinking before any rate is discussed, and review the program at every renewal.
Why does program fit matter more than discount depth?
Program fit matters more because the program decides what you can stop paying for, while the discount only sets the rate on what you keep. An organization that is flat or shrinking rarely gains from an enterprise wide commitment, however good the headline rate looks.
Microsoft lists its commercial programs on its licensing programs page, and the smaller ones sit on the Open licensing page. Most of the buyers we meet have only ever been quoted one of them.
Three things program choice controls
- Price level. Volume tiers and commitment depth differ by program, and so does whether a unit price is held for the term.
- True up mechanics. How added usage is counted, when it has to be reported and how it is billed.
- Scale down. Whether, and when, you can reduce quantities once headcount, servers or cloud usage shrink.
Only the first of these comes up when the account team talks about discounts. The other two get settled by default, usually in whatever form the incumbent program already has.
| Program | Shape | Best fit | Watch out for | Room to reduce |
|---|---|---|---|---|
| Enterprise Agreement | Enterprise wide commitment over a three year term | Large, growing organizations with 500 or more users or devices | Rigid commitment if headcount is flat | Subscription licenses can drop at each anniversary, but not below your count of qualified users and devices; perpetual licenses cannot drop |
| CSP | Flexible monthly through a partner | Cloud first and variable demand | Partner margin sitting in the rate | Monthly terms can drop each month; annual terms only within 7 calendar days of purchase or at renewal |
| MPSA | Single transactional agreement that does not expire | Mid size, no commitment wanted | No enterprise wide discount tier | No enterprise count to reduce from; you buy as you need |
| Open Value | Spread payments plus Software Assurance | Smaller organizations | Limited scale for larger organizations | Open Value Subscription allows lower quantities at each anniversary order |
What changed for online services on November 1, 2025?
Microsoft now sells every online service at one price across Price Levels A to D in both the EA and the MPSA. It applies at your next renewal, or earlier for an online service not yet on your Customer Price Sheet. On premises pricing is unchanged, and U.S. Government and worldwide Education price lists are excluded.
A large EA customer buying Microsoft 365 therefore no longer earns a published volume discount over a smaller buyer, so any EA price advantage on cloud seats has to be negotiated. We cover the MPSA side in our note on MPSA online services after the discount removal.
How does the Microsoft MPSA work?
The Microsoft Products and Services Agreement is a single, non expiring transactional agreement. You buy what you need without an enterprise wide commitment, and purchases accumulate toward better pricing over time. What separates it from the EA is the absence of the three year pledge, as the Microsoft MPSA page describes.
Purchasing accounts, points and price levels
- One paper. A single MPSA covers software, cloud services and Software Assurance for the signing legal entity and its affiliates.
- Purchasing accounts. Departments or affiliates buy through their own purchasing accounts, several partners can serve one account, and one agreement administrator oversees all of them.
- Points by pool. Purchases earn points in product pools, and the organization reaches the next price level in a pool as soon as it meets that level's annual point minimum.
- Keeping Level A. Microsoft positions MPSA for organizations with 250 or more users or devices. To hold Level A pricing you need 500 points, or cloud services for 250 or more users, each year by the compliance anniversary.
- Cloud ordering. Online services are provisioned through Microsoft Business Center, with Azure the exception.
Who MPSA suits, and who it does not
It fits mid size organizations that value flexibility over the deepest committed discount. It suits very large organizations less well, because they can still win better pricing from an enterprise wide commitment, mainly on on premises products where price levels still apply.
One trade off belongs in the comparison. The EA fixes Microsoft's prices for most products for the enrollment term, as long as you stay at the same price level, while an MPSA order prices at the level and list in force on the day you place it. Our MPSA and EA comparison sets the terms out side by side.
Microsoft licensing program selection guide
How each Microsoft program handles price, true up and reductions, in one reference.
Get the white paper →What have our recent Microsoft agreement reviews shown?
Across roughly 20 to 35 Microsoft agreements we reviewed between 2024 and 2025, customers were often in the wrong program for their size and cloud mix. In about 1 in 2, the EA commitment no longer fitted the business. Three patterns came up again and again.
- Default EA drift. The organization renewed an EA out of habit when a transactional program would have fitted its flat or shrinking headcount better.
- Commitment mismatch. Enterprise wide commitments sat on organizations that had stopped growing, which removed flexibility and returned nothing for it.
- Program blindness. Buyers had never been shown MPSA or Open Value, so they negotiated inside one option instead of across several.
The Enterprise Agreement is the program the account team knows best, which is not the same as the program that fits you best.
None of this means the EA is wrong. In those reviews it remained the right answer for large, growing organizations. The problem was that it had become the starting point, when it should have been the result of a comparison across at least four programs.
Why "stay on the EA for the discount" is the wrong default
The usual advice is to renew the EA because it carries the deepest volume discount. We disagree, since the discount applies only to what you commit to, and in the agreements we reviewed that commitment often covered users, devices or servers the business no longer had.
The better course is to decide the program first and negotiate the rate second. Price the same forecast through each program, put a value on the right to reduce, and only then ask the account team for its best EA number.
What does the wrong program cost over three years?
Take a hypothetical company with 1,200 users on Microsoft 365 E3, which lists at $39 per user per month on an annual commitment, or $468 a year. Assume its EA discount was granted against a committed count of 1,200 users, in an amendment that bars reducing below that count for the term.
Assume it negotiates 5 percent off list, or $37.05 a month and $444.60 a year. The alternative is annual CSP subscriptions at list, resized at each renewal. Each year is counted in full for simplicity, and added EA seats are trued up at the EA price.
| Scenario and year | Users needed | EA cost | CSP cost |
|---|---|---|---|
| Shrinking, year 1 | 1,200 | $533,520 | $561,600 |
| Shrinking, year 2 | 1,050 | $533,520 | $491,400 |
| Shrinking, year 3 | 950 | $533,520 | $444,600 |
| Shrinking, three years | $1,600,560 | $1,497,600 | |
| Growing, year 1 | 1,200 | $533,520 | $561,600 |
| Growing, year 2 | 1,300 | $577,980 | $608,400 |
| Growing, year 3 | 1,400 | $622,440 | $655,200 |
| Growing, three years | $1,733,940 | $1,825,200 |
In the shrinking case the EA pays for 150 idle seats in year 2 and 250 in year 3, and the CSP route costs $102,960 less over the term at full list price. In the growing case the result reverses, and the EA saves $91,260 because every added seat carries the discount.
The only input that changed the answer was the direction of headcount. Partner pricing in CSP can sit above or below list, so run the same table with real quotes before you rely on it.
The standard enrollment allows subscription licenses to be reduced at the anniversary, provided the remaining count still covers every qualified user and device. The rigidity comes from amendments that tie a discount to a fixed count, from perpetual licenses with Software Assurance, and from the 500 user or device floor of the commercial EA.
Where do Open Value and the Server and Cloud Enrollment fit?
They sit at opposite ends of the market. Open Value suits smaller organizations below EA thresholds, spreading license cost over the agreement term with Software Assurance included. The Server and Cloud Enrollment sits inside the EA for committed server and cloud products, and it deepens discounts on those workloads in exchange for commitment.
Open Value for smaller organizations
Open Value starts at an initial purchase of five or more licenses and is sold through partners. The agreement runs for three years, paid up front or in annual installments. Open Value Subscription spreads payments annually over three years and allows lower quantities at each anniversary order.
Do not confuse either with Open License, which closed to new commercial purchases and renewals on January 1, 2022. Microsoft still offers Open Value and Open Value Subscription in 2026.
The SCE only pays on a stable base
Microsoft's product licensing terms govern the SCE, which has four components: Core Infrastructure, Application Platform, Developer Platform and Microsoft Azure. For each family you commit to, 100 percent of the installed base needs Software Assurance or subscription coverage. Microsoft's guidance lists 15 percent off licenses with Software Assurance, and 5 percent off Software Assurance.
- Core Infrastructure. A minimum of 400 core licenses.
- Application Platform. A minimum of 50 SQL Server cores or the equivalent.
- Developer Platform. A minimum of 20 licenses.
The coverage rule is what makes the SCE rigid. It fits a steady server and cloud footprint, but on a shrinking one it repeats the EA's mistake one level down, because Software Assurance stays due on every core in the committed family. Our agreement comparison prices the alternatives.
Who tends to be in the wrong program?
The organizations most often in the wrong program grew into an EA and never reassessed it. The commitment made sense at the size and growth rate of the business three renewals ago, and the premise was not tested again after that.
How the answer changes with size
- Under 250 users or devices. The commercial EA starts at 500, and Microsoft positions MPSA from 250, so CSP and Open Value are the realistic choices.
- From 250 to just under 500. MPSA, CSP and Open Value are all open. The EA is not, unless you are in the public sector, where its floor is 250.
- 500 to a few thousand, flat or shrinking. This is the group most exposed to default EA drift. Price MPSA and CSP next to the EA at every renewal.
- Large and growing. The EA, with an SCE for a stable server base, usually wins. Spend the effort on the rate, the price hold and reduction rights.
A week of work against a three year term
A program review at each renewal catches the drift before the next renewal locks it in for another term. It takes about a week, and it is the only test that separates habit from a decision. The mechanics of the other vehicles sit in our customer agreement guide and the CSP comparison.
How do you check which program fits before the renewal?
Start with your own records, since the account team's comparison will start from the EA. Five sources cover most of the work.
- Agreement documents. Pull the signed agreement, every enrollment and amendment, and the Customer Price Sheet from Volume Licensing Central. Note the committed products, the true up rules and any reduction rights.
- Purchased against assigned. In the Microsoft 365 admin center, the Licenses page under Billing shows how many of each subscription you bought and how many are assigned.
- Activity. Entra ID sign in logs and the Microsoft 365 usage reports show which assigned users have not signed in or used the service for months.
- Server counts. Count Windows Server and SQL Server cores by product family before any SCE discussion, because coverage has to reach 100 percent.
- Forecast. Get a three year headcount and workload forecast from HR and finance, including planned divestments and hiring freezes.
Mistakes that lock in the wrong program for another term
- Comparing unit rates only. A rate comparison hides idle seats. Compare three year totals against the forecast instead.
- Treating CSP as fully flexible. Annual CSP subscriptions can be cancelled for a prorated refund only within 7 calendar days of purchase. After that the count stays until the term renews.
- Letting the anniversary pass. EA subscription reductions take effect only at the anniversary and only down to your qualified count. Submit them with the anniversary order, or the full count rolls into the next year.
- Signing an SCE on an estimated core count. Because coverage must be complete, an undercount becomes a Software Assurance bill at the first true up. Our EA true up guide explains how those orders are priced.
What will the Microsoft account team say about changing programs?
Expect the conversation to steer back to the EA. These are the lines we hear most often, with the replies we suggest.
| What you will hear | What to say back |
|---|---|
| "The EA gives you our best pricing." | Show us the per SKU difference against MPSA and CSP in writing. Online services have carried one price across Levels A to D since the November 2025 change. |
| "MPSA is meant for smaller customers." | Microsoft's MPSA page positions it for organizations with 250 or more users or devices and names no upper limit. Price us on it. |
| "You will lose your Software Assurance benefits if you leave the EA." | Software Assurance can be bought on MPSA and comes with Open Value. Name the benefit we would lose and the date we would lose it. |
| "Renew now, before the next price change." | We will compare the programs first. Put any price hold in writing with its expiry date. |
If the pressure is about moving from the EA to MCA-E on Microsoft's timetable, our note on MCA-E migration timing covers how to keep that decision on yours.
What to do next
- Map the current program. List every commitment it carries, the true up mechanics and whatever scale down rights the paper actually gives you.
- Set the direction. Establish whether the business is growing, flat or shrinking, since that decides whether an enterprise wide commitment is an asset or a liability.
- Price across programs. Run the same forecast through MPSA, CSP and the EA, plus Open Value if you are small enough, because program blindness was the most common condition in the agreements we reviewed.
- Put a number on flexibility. Weigh discount depth against the right to reduce and write down what that right is worth. Otherwise only the discount has a figure attached to it.
- Choose for the next three years. Pick the program that fits the coming term rather than the last one. Our Microsoft practice prices the alternatives before the renewal quote arrives.
Is a Microsoft renewal or new agreement coming up? Our Microsoft EA negotiation team works only for buyers, for a fixed fee or 25 percent of what we save you.
Frequently asked questions
What is the Microsoft MPSA?
The Microsoft Products and Services Agreement is a single non expiring transactional agreement with no enterprise wide commitment. Purchases accumulate toward better pricing instead of being pledged up front, and one agreement administrator manages every purchasing account under it.
How is MPSA different from an EA?
The EA rests on an enterprise wide commitment, typically over three years, with a true up order due between 60 and 30 days before each anniversary. MPSA removes that commitment and gives you one paper across products and affiliates, and you order as you go instead of reconciling once a year.
Who should look at MPSA?
Mid size organizations that value flexibility over the deepest committed discount, and any EA customer whose headcount has stopped growing. Very large organizations that can still win better pricing from a commitment, mostly on on premises products, are usually better served by the EA.
What is Open Value?
A Microsoft Volume Licensing program for organizations below EA thresholds, bought through a partner from five licenses upward. Software Assurance is built in and payments are spread across the term. Microsoft still sells it, unlike the older Open License program, but it scales poorly for large organizations.
What is the Server and Cloud Enrollment?
An enrollment inside the EA for committed server and cloud products such as Windows Server, SQL Server and Azure. Microsoft trades a deeper discount on those workloads for commitment, so it suits a stable base. Count every core in the families you plan to commit before you sign, since the enrollment requires full coverage.
Does CSP cost more than an EA?
It can, because partner margin sits in the rate. It buys flexible monthly consumption through a partner, which is worth more than a few points to a cloud first organization with variable demand. Ask for monthly and annual term quotes separately.
How often should the Microsoft licensing program be reviewed?
At least once per renewal cycle, and early enough to set up an alternative agreement before the renewal quote arrives. Also review it after any acquisition, divestment or hiring freeze, since each one changes the headcount that an enterprise wide commitment has to cover.
Does a deeper discount always win?
No. A discount only lowers the price of what you are already committed to buy. If the commitment covers users or servers the business no longer has, the flexibility you gave up to get the discount can outweigh the points you saved.
What does the choice of Microsoft program actually control?
Price level, true up mechanics and how easily you scale down. It also decides whether unit prices are held for a term, and whether you deal with Microsoft, a licensing partner or a CSP partner who adds its own margin.
What is the first thing to establish before choosing a program?
Whether the business is growing, flat or shrinking over the coming term. That fact decides whether an enterprise wide commitment is worth buying at all, before any rate is discussed, so base it on HR and finance forecasts rather than the last true up count.