Through comprehensive deployment analysis across factories, design studios, and corporate offices, role-based licence optimisation, automotive industry benchmarking, and strategic negotiation tied to digital transformation goals, Redress delivered €10 million in annual optimisation savings, secured €6 million in negotiated discounts, and achieved a 28% reduction in Microsoft licensing costs.
This case study is part of the Microsoft EA Renewal Case Studies series. See also: Swiss Bank CHF 9M Savings, Global Financial Institution $10.5M.
The manufacturer is one of Germany's leading automotive companies, operating a global network of production facilities, R&D centres, design studios, and corporate offices across Europe, North America, Asia, and emerging markets. Its IT environment supports the full spectrum of automotive operations: vehicle design and engineering, production line management, supply chain logistics, dealer network communications, and corporate functions.
The company's Microsoft EA had evolved through multiple renewal cycles, each adding products: Azure for connected vehicle data platforms, Dynamics 365 for dealer management, Power Platform for production analytics, and Microsoft 365 for 100,000+ employees spread across vastly different work environments, from corporate offices to factory floors to remote R&D labs.
The result was a licensing estate with significant inefficiency: premium SKUs assigned to factory workers who needed only basic communication tools, Azure commitments misaligned with actual IoT and analytics consumption, and departmental duplication across geographically dispersed operations.
Workforce diversity. The 100,000+ employees included corporate staff, R&D engineers, production line workers, logistics personnel, and dealer network users. Yet the existing EA applied relatively uniform E3/E5 licensing across the population. Factory floor workers licensed on E3 (€30+/user/month) needed only basic communications. This single mismatch across tens of thousands of factory workers represented millions in annual overspend.
Azure IoT and connected vehicle complexity. The company's connected car and autonomous driving initiatives were driving significant Azure consumption. However, the existing MACC was structured as a single monolithic amount that did not differentiate between stable production workloads and highly variable R&D experimentation, creating both overage exposure and unused commitment.
Global manufacturing footprint. Operations across 15+ countries with different regulatory environments required region-specific Azure configurations. Each region had accumulated its own Microsoft licensing independently, creating cross-regional duplication where users held licences from multiple geographic allocations.
Legacy and emerging technology overlap. The manufacturer simultaneously ran legacy on-premises systems (production management, ERP, CAD/CAM) alongside modern cloud workloads (connected vehicle platforms, AI/ML pipelines). Microsoft was pushing aggressive Copilot AI adoption across the EA, but the business case had not been validated for the manufacturer's specific use cases.
| Optimisation Category | Finding | Action Taken | Annual Savings |
|---|---|---|---|
| Workforce SKU right-sizing | ~35,000 factory/logistics workers on E3 using only basic communications; R&D over-provisioned on E5 | Factory/logistics migrated to F1/F3; R&D moved to E3 + targeted add-ons; corporate power users retained on E5 | €4.2M |
| Azure optimisation | Over-provisioned production VMs; R&D on pay-as-you-go; orphaned resources; IoT Hub over-tiered | Right-sized VMs; R&D converted to reserved + spot pricing; orphaned resources decommissioned; IoT Hub re-tiered | €2.8M |
| Cross-regional consolidation | Duplicate licences across 15+ regions; local Azure subscriptions outside global EA | Consolidated to single global EA allocation; eliminated regional duplicates; unified Azure subscription management | €1.8M |
| Legacy retirement and AHB | On-prem server licences for partially migrated workloads; unclaimed Azure Hybrid Benefit; excess Dynamics seats | Retired redundant on-prem licences; applied AHB credits; reduced Dynamics seat count to active users | €1.2M |
| Total annual optimisation savings | €10M | ||
| Metric | Previous EA | New EA (Post-Negotiation) |
|---|---|---|
| Overall Microsoft licensing cost | Baseline (100%) | 72% of previous (28% reduction) |
| M365 licence model | Predominantly E3/E5 across all employee types | 5-tier model: E5 corporate, E3 standard, E3+add-ons R&D, F1/F3 factory, external dealer licences |
| Azure commitment | Monolithic MACC; no production/R&D separation | Two-tier: stable production baseline + flexible R&D with burst capacity |
| AI/Copilot investment | Microsoft proposed 100,000+ user Copilot rollout | Targeted 5,000-user pilot with expansion rights; €15M+ avoided |
| Data residency | Standard Microsoft DPA | Enhanced DPA with EU data residency; Chinese localisation; vehicle telemetry governance |
| 3-year total savings | €16 million (€10M optimisation + €6M negotiated discounts) | |
"Redress Compliance's support in our Microsoft EA renewal was transformative. Their expertise ensured significant cost savings while enabling us to align our IT strategy with our innovation goals. Their guidance was critical to achieving a scalable and flexible agreement." Group Chief Information Officer, Leading German Automotive Manufacturer
Two sources: €10 million annually from licence optimisation (workforce SKU right-sizing saving €4.2M, Azure optimisation saving €2.8M, cross-regional consolidation saving €1.8M, and legacy retirement/AHB saving €1.2M) and €6 million from negotiated discounts secured through automotive industry benchmarking and strategic negotiation. Over the three-year EA term, these combined to deliver €16 million, a 28% reduction.
At €30/user/month, a blanket Copilot rollout would have cost approximately €36 million annually. Redress's assessment found that Copilot's productivity value was demonstrable for corporate knowledge workers but unproven for factory floor workers and dealer network users. A targeted 5,000-user pilot with locked-in expansion rights allows the manufacturer to validate ROI before committing.
Redress restructured the monolithic MACC into two tiers: a production baseline using reserved instances at discounted rates (IoT Hub, telemetry processing, steady-state analytics) and a separate R&D allocation with burst capacity (autonomous driving experiments, ML training) using a mix of reserved and spot pricing. Each tier has independent step-up/step-down provisions.
The EA includes explicit contractual provisions: the manufacturer retains full IP ownership of all vehicle data processed through Azure, Microsoft has no rights to use vehicle telemetry data for training or product improvement, data portability provisions ensure the manufacturer can extract all vehicle data if it transitions to another cloud provider, and processing terms comply with EU automotive data regulations.
Redress segmented the 100,000+ workforce into five tiers: (1) E5 for ~8,000 corporate power users, (2) E3 for ~25,000 standard office workers, (3) E3 + targeted add-ons for ~12,000 R&D engineers, (4) F1/F3 for ~35,000 factory and logistics workers, and (5) external licences for ~20,000+ dealer network users. Each tier was priced independently and can be adjusted annually.
Production cycle provisions allow the manufacturer to adjust licence quantities by ±15% at defined intervals to accommodate seasonal production ramps, model launches, plant retooling, and economic cycle fluctuations. For a manufacturer with 100,000+ employees, even a 10% headcount fluctuation represents significant unnecessary licensing cost without these provisions.
For large automotive manufacturers that have not conducted an independent EA review before, savings of 25-35% are achievable. The automotive sector has particularly high savings potential because of the workforce diversity factor: a large proportion of employees are factory/production workers who are routinely over-licensed with knowledge worker SKUs.