The Challenge
A leading bank on the East Coast with over 20,000 employees engaged Redress Compliance to assist with the renewal of its Microsoft Enterprise Agreement (EA). The bank's IT infrastructure supported critical banking operations, customer management systems, and digital transformation initiatives.
With the EA renewal approaching, the complexity of Microsoft's licensing models and the high financial stakes required a strategic approach to maximise value and minimise costs.
| Objective | Why It Mattered |
|---|---|
| Deployment Analysis | Understand actual Microsoft usage across Office 365, Azure, and on-premise solutions — identify underutilised licences and overprovisioning |
| Licence Optimisation | Reduce waste by reallocating, consolidating, and right-sizing licences across business units |
| Roadmap Development | Build a three-year plan for cloud migration, enhanced security, and digital collaboration tools |
| Benchmarking | Compare costs and terms against peer banking institutions to ensure competitive pricing |
| Negotiation | Secure discounts and flexible terms on Azure, Office 365, and the overall EA structure |
Banks face unique pressure during Microsoft EA renewals. Regulatory requirements create deep Microsoft dependencies that limit the institution's ability to walk away — and Microsoft's sales teams know this. Without independent benchmarking and expert negotiation support, financial institutions routinely overpay by 15–30% on EA renewals. The three-year renewal cycle is Microsoft's primary mechanism for resetting commercial terms and pushing price increases.
The Process
Phase 1: Deployment Analysis
- Reviewed all Microsoft deployments — including Office 365, Azure, and on-premise solutions across all business units and branch locations.
- Mapped software usage against entitlements — identifying underutilised licences and areas of overprovisioning that were generating cost without delivering value.
- Assessed the bank's hybrid cloud strategy to align the licensing model with long-term infrastructure goals and planned cloud migration timelines.
📚 Related Reading
Deployment analysis is the single most critical step in any EA renewal. Microsoft's renewal proposals are based on your existing entitlements — not your actual usage. This means you are almost always being asked to renew licences you don't need. In our experience with financial institutions, 20–35% of Microsoft licences are underutilised, misallocated, or entirely unused. Identifying this waste before engaging Microsoft is the foundation of every effective negotiation.
Phase 2: Licence Optimisation
⚠️ What We Found
- Redundant licences across multiple business units — different departments independently purchasing the same products
- Uniform E5 licensing applied to users who only needed E3 or F3 functionality
- Outdated on-premise solutions still being maintained alongside cloud replacements
- No role-based licensing framework — all users treated identically regardless of actual needs
✅ What We Optimised
- Consolidated licences across business units to eliminate duplication
- Implemented role-based licensing — power users on E5, standard users on E3, frontline on F3
- Recommended retiring outdated on-premise solutions being replaced by cloud equivalents
- Right-sized Azure commitments based on actual consumption patterns
Phase 3: Roadmap Development
| Roadmap Element | Details | EA Impact |
|---|---|---|
| Cloud Migration | Three-year plan for migrating on-premise workloads to Azure and M365 | Ensured EA terms supported planned workload growth without penalty |
| Enhanced Security | Adoption of Microsoft Defender, Entra ID, and advanced compliance tools | Negotiated security add-ons at favourable rates within the EA |
| Digital Collaboration | Expanded Teams deployment including Teams Phone for select departments | Role-based licensing prevented unnecessary spend on full-suite licences |
| Scalability | Built-in flexibility to accommodate M&A activity, workforce changes, and branch expansion | Negotiated scalable terms allowing licence adjustment during the EA term |
Phase 4: Benchmarking
Benchmarking is the negotiation lever most financial institutions lack — and the one Microsoft fears most. Without independent benchmarking data, you cannot know whether Microsoft's proposed pricing represents genuine value or an inflated starting position. We compared the bank's licensing costs and terms against similar-sized banking institutions globally, identifying specific areas where Microsoft's proposal exceeded market norms. This data directly informed our negotiation strategy and gave the bank's procurement team the confidence to push back on Microsoft's initial offer.
Phase 5: Negotiation
| Negotiation Tactic | Details | Outcome |
|---|---|---|
| Data-Driven Counter-Proposal | Leveraged deployment analysis and optimisation findings to present a precise, evidence-based counter-proposal | Shifted negotiation from Microsoft's inflated baseline to actual usage |
| Azure Discount Negotiation | Used consumption data and competitive cloud alternatives to negotiate enhanced Azure pricing | Secured significant discounts on Azure services |
| Office 365 Right-Sizing | Challenged Microsoft's proposed licence counts based on role-based analysis | Reduced Office 365 costs through SKU optimisation |
| Term Flexibility | Negotiated contract terms allowing adjustment of licensing volumes during the EA term | Built-in flexibility for 20,000+ employee workforce changes |
The Outcome
| Metric | Before Redress | After Redress | Result |
|---|---|---|---|
| Annual Licence Optimisation Savings | — | $3,500,000 | ✔ Role-based licensing + deduplication |
| Negotiated Discount Savings | — | $2,200,000 | ✔ Azure + Office 365 discounts |
| Total 3-Year Savings | — | $5,700,000 | ✔ Over the EA term |
| Overall Cost Reduction | Baseline | 25% lower | ✔ Across entire Microsoft estate |
| Compliance Status | Gaps identified | Fully compliant | ✔ All discrepancies resolved |
| Licence Management | Fragmented across BUs | Centralised, streamlined | ✔ Improved reporting & governance |
| Digital Transformation | Unstructured | 3-year roadmap aligned | ✔ EA supports cloud migration |
"
Redress Compliance's expertise was instrumental in ensuring a successful Microsoft EA renewal. Their insights and strategic approach delivered significant cost savings and positioned us to meet our future IT objectives. They were an invaluable partner throughout the process.
— Chief Information Officer, Large East Coast Bank
Why Banks Overpay on Microsoft EA Renewals
⚠️ Common Traps
- Banks renew based on entitlements, not usage — automatically overpaying for unused licences
- E5 is pushed as the default when E3 (or F3 for branch/frontline workers) would suffice for most users
- Azure MACC commitments are set too high based on Microsoft's growth projections, not actual consumption
- Regulatory pressure makes banks reluctant to challenge Microsoft or explore alternatives
- Branch network complexity makes accurate licence counting difficult without expert analysis
✅ How Redress Counteracts
- Usage-based analysis: optimise based on actual deployment, not Microsoft's renewal proposal
- Role-based licensing: match SKUs to user profiles — power users get E5, standard users get E3, frontline gets F3
- Azure right-sizing: align MACC to actual consumption with flexibility built in
- Independent benchmarking: compare pricing against peer banking institutions for maximum leverage
- Expert negotiation: former Microsoft licensing specialists who know exactly how the renewal playbook works
Key Takeaways for ITAM & Procurement Professionals
- Never renew based on entitlements. Microsoft's renewal proposal is based on what you currently have — not what you actually use. Conducting a thorough deployment analysis before engaging Microsoft typically reveals 20–35% waste in large banking institutions.
- Role-based licensing is essential at scale. A 20,000-employee bank does not need 20,000 E5 licences. Profiling users by actual requirements (power users, standard users, branch/frontline workers) and matching them to the appropriate SKU is one of the highest-ROI optimisation levers.
- Benchmark everything. Without independent benchmarking data, you have no way to evaluate whether Microsoft's pricing is competitive. Peer comparison across similar financial institutions provides the evidence needed to push back on inflated proposals.
- Negotiate Azure and Office 365 separately. Microsoft often bundles these into the EA at list pricing. Both Azure consumption commitments and Office 365 licence counts should be negotiated independently based on actual usage data.
- Build flexibility into the EA. Banks face regulatory changes, M&A activity, and workforce fluctuations. Negotiating scalable terms that allow licence adjustment during the EA term protects against overpaying for unused capacity.
- Engage independent experts early. Starting 9–12 months before EA expiry gives time for proper analysis, benchmarking, and strategy development. Engaging at the last minute hands all leverage to Microsoft.
🔗 See all Microsoft EA renewal results: Microsoft EA Case Studies
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Microsoft EA Renewal Coming Up? Don't Renew Without Us.
Redress Compliance helps financial institutions worldwide negotiate Microsoft EA renewals that deliver 15–30% cost reductions. We provide independent benchmarking, deployment analysis, and expert negotiation support. We're 100% independent — we never resell Microsoft licences. We work only for you.