Client Background and Challenge
The client is a major UK-headquartered engineering company specialising in infrastructure design, construction management, and environmental engineering. With over 30,000 professionals operating across the United Kingdom, Europe, the Middle East, Africa, and Asia-Pacific, the firm delivers some of the most complex civil infrastructure projects in the world — including transportation networks, water treatment facilities, energy infrastructure, and urban development programmes. The firm’s IT environment supports demanding workflows including 3D modelling and BIM (Building Information Modelling), computational engineering simulations, real-time field collaboration between office-based designers and on-site construction teams, and project portfolio management across hundreds of concurrent engagements.
The firm’s Microsoft footprint was extensive: Microsoft 365 E3 and E5 licences deployed across the entire global workforce, a rapidly growing Azure consumption commitment supporting engineering computation, data analytics, and IoT sensor data processing from construction sites, Microsoft Project for portfolio management, Power BI for executive reporting and project dashboards, Microsoft Teams as the primary collaboration platform, and SharePoint for engineering document management including version-controlled CAD drawings and specifications. The annual Microsoft spend exceeded £16 million, making Microsoft the firm’s single largest software vendor.
With the existing EA nearing expiration, the firm faced several interconnected challenges. The licensing portfolio had not been reviewed against actual usage since the previous renewal three years earlier. During that period, the firm had acquired two smaller engineering consultancies (adding approximately 4,500 employees), migrated several on-premises workloads to Azure, and rolled out Microsoft Teams globally — but the EA had not been adjusted to reflect these changes. An estimated 35–40% of E5 licences were assigned to employees who used only E3-level features, acquired employees had been added on inconsistent licence tiers, and Azure consumption had tripled without renegotiation of consumption discounts.
Additionally, the firm’s project-based workforce model created licensing inefficiency. Engineering projects typically run 18–36 months, with teams ramping up at project award and drawing down at completion. The existing EA committed to a fixed licence count based on peak headcount, meaning the firm paid for 30,000 licences year-round even though active headcount fluctuated between 24,000 and 32,000 depending on the project pipeline. Microsoft’s standard EA structure does not accommodate this variability — and the firm had never negotiated project-aware licensing provisions. The cumulative impact of these inefficiencies — E5 over-assignment, acquisition licence bloat, Azure discount lag, and fixed workforce commitments — represented an estimated 25–30% waste in the firm’s annual Microsoft spend, translating to £4M–£5M per year in avoidable cost.
“UK engineering firms operating internationally face a compounding licensing challenge: workforce variability driven by project cycles, multi-country deployment requiring regional compliance considerations, and rapidly growing Azure consumption for engineering computation that outpaces negotiated discount structures. The firms that achieve the best EA outcomes are those that treat the renewal as a strategic procurement event — not an administrative exercise. Starting the optimisation process 9–12 months before expiration, with independent usage data and competitive benchmarking, consistently delivers 20–30% reductions in total EA cost.”
Our Approach — Five-Phase Engagement
Redress Compliance deployed a structured five-phase engagement over 14 weeks, working directly with the firm’s Group CIO, Head of IT Procurement, and regional IT directors across all operating geographies.
Phase 1: Detailed Deployment Analysis (Weeks 1–4)
We reviewed the deployment and usage of Microsoft products across all 30,000+ users, covering Office 365, Azure, and specialised tools for 3D modelling and project management. Using Microsoft 365 admin centre data, Azure cost management reports, and Teams analytics, we mapped every licence assignment against actual feature utilisation by department, region, and project team. We assessed the firm’s hybrid IT setup — combining on-premises engineering servers with growing Azure adoption — to identify workloads that could be further migrated to cloud at lower cost. The analysis uncovered: 8,400 users on E5 licences utilising only E3-level features, 3,200 licences assigned to inactive accounts or duplicated across the acquired companies, £580K annually in Azure resources running without active workloads (orphaned VMs from completed engineering projects, over-provisioned storage for archived project data), and inconsistent licence tiers across the two acquired companies that had never been harmonised with the parent firm’s EA.
Phase 2: Licence Optimisation (Weeks 5–7)
We developed a comprehensive optimisation plan targeting four categories. E5-to-E3 downgrades: 8,400 users reclassified from E5 to E3, with targeted E5 add-ons (Phone System, Information Protection) applied only where specific features were required. Annual savings: £2.1M. Licence cleanup: 3,200 inactive and duplicate licences decommissioned, including harmonising the acquired companies onto consistent tiers. Annual savings: £1.15M. Azure optimisation: £580K in orphaned resources identified for decommissioning, plus conversion of predictable engineering workloads to 3-year Reserved Instances (40% savings) and adoption of Azure Savings Plans for variable compute. Additional annual savings: £380K. Legacy retirement: On-premises Project Server and Visio desktop deployments retired in favour of cloud-based Project Online and Visio web, reducing licence count and eliminating server maintenance costs. Annual savings: £490K. Total annual optimisation savings: £4.2 million.
Phase 3: Strategic Roadmap Development (Weeks 8–9)
We partnered with the Group CIO and IT leadership team to create a three-year roadmap aligning Microsoft licensing with the firm’s digital transformation objectives. The roadmap addressed three strategic priorities: the expansion of Azure for engineering computation (high-performance computing for structural analysis, environmental modelling, and BIM rendering), the rollout of Microsoft Copilot for engineering documentation and bid preparation, and the integration of Microsoft Fabric for consolidating project analytics across the firm’s global portfolio. Each initiative was modelled with licensing implications and phased adoption milestones, ensuring the renewal EA included provisions for these planned expansions at pre-negotiated rates rather than at-list mid-term additions.
Phase 4: Benchmarking and Cost Analysis (Weeks 10–11)
We benchmarked the firm’s Microsoft pricing against our database of EA renewals for global engineering, construction, and infrastructure companies of comparable scale. The benchmarking covered per-user pricing for M365 E3 and E5, Azure consumption discount tiers relative to commitment levels, Microsoft Unified Support pricing, and Teams Phone and Calling Plan rates. The analysis revealed that Microsoft’s initial renewal proposal was 15–20% above median pricing for comparable firms, and included a 5% annual escalation that exceeded the 2.5–3.5% typical of well-negotiated engineering sector EAs. We also obtained indicative proposals from Google Workspace and AWS to establish competitive alternatives for specific workloads — not as a migration threat, but as credible pricing benchmarks that demonstrated the firm had options.
Phase 5: Negotiation and Renewal Execution (Weeks 12–14)
We provided direct negotiation support through three rounds of discussions with Microsoft’s UK enterprise team. Microsoft’s opening proposal was £17.2M annually — a 5% increase over the existing £16.4M agreement. Our counter-position, supported by optimisation data, benchmark analysis, and the competitive alternatives, targeted £12.1M. After structured negotiations, the final agreement was £12.1M annually — a 26% reduction from the previous EA. Key terms secured included: a project-based true-up model with a base commitment of 24,000 licences and quarterly flex for project staff at pre-negotiated rates, a 3% annual price escalation cap, Azure MACC discount tiers that rewarded the firm’s growing cloud commitment with 18–25% discounts, Copilot early-adopter pricing for 800 seats at 35% below list, Unified Support pricing restructured with performance-based SLAs, and annual true-down rights allowing the firm to reduce licence counts if the project pipeline contracted. The £2.8M in negotiated discounts beyond optimisation reflected pricing concessions across M365, Azure, and support that the benchmarking data demonstrated were achievable.
Outcome
The engagement delivered substantial results across cost reduction, operational efficiency, and strategic positioning. The firm entered the new EA with a fully optimised licence portfolio, contract terms designed for its project-based workforce, and a technology roadmap aligned with its digital transformation priorities.
The total savings of £7 million over three years comprised £4.2 million annually in licence optimisation savings (E5 downgrades, inactive licence cleanup, Azure resource optimisation, and legacy retirement) and £2.8 million in negotiated discounts secured through competitive benchmarking, alternative platform proposals, and the leverage created by demonstrating that the firm’s actual requirement was materially smaller than the existing EA. The 14-week engagement cost represented less than 2% of the first-year savings, delivering a return on investment exceeding 50:1 over the EA term.
| Metric | Before Engagement | After Engagement | Impact |
|---|---|---|---|
| Annual EA cost | £16.4M | £12.1M | 26% reduction (£4.3M annual savings) |
| Total 3-year savings | — | £7M | Optimisation + negotiated discounts |
| E5 licences | 30,000+ (all users) | 6,800 (targeted) | 77% reduction in E5 assignments |
| Inactive/duplicate licences | 3,200 assigned | 0 | Full cleanup incl. acquisitions |
| Azure waste eliminated | £580K/year orphaned resources | £0 | Complete resource cleanup |
| Licence flexibility | Fixed 30,000+ commitment | 24,000 base + quarterly flex | Aligned with project-based workforce |
| Price escalation | 5% proposed | 3% capped | 40% reduction in annual escalation |
| Compliance status | Gaps from acquisitions | Fully compliant | Harmonised across all entities |
Redress Compliance’s expertise was pivotal in transforming our Microsoft EA renewal into a strategic success. Their tailored approach delivered significant cost savings and set us up for future innovation. The project-based licensing model they negotiated reflects how our business actually operates — we’re no longer paying for peak headcount year-round. They are a trusted partner in our IT journey.
Key Lessons for UK and Global Engineering Firms
This engagement reinforces several principles that apply to engineering, construction, and infrastructure firms managing Microsoft Enterprise Agreements. The patterns we identified — acquisition-driven licence fragmentation, E5 over-assignment, Azure consumption outpacing negotiated discounts, and fixed commitments mismatched with project-based workforces — are endemic across the sector and affect firms of all sizes, from 5,000-employee regional practices to 100,000-employee global infrastructure groups.
The 14-week engagement delivered £7M in savings against an engagement cost of less than £100K — a return on investment exceeding 50:1 over the EA term. The firm has since engaged Redress Compliance for annual licence reviews to maintain the optimised position through the EA term and to prepare for the next renewal cycle. The governance framework we established — including quarterly usage reviews, automated inactive licence detection, and Azure resource tagging for project lifecycle tracking — is projected to prevent £600K–£900K in annual licence drift that would otherwise accumulate between renewals.
Post-Acquisition Licence Harmonisation Is Non-Negotiable
The 3,200 inactive and duplicate licences — many originating from two acquisitions completed during the previous EA term — represented £1.15M in annual waste. When engineering firms acquire smaller companies, the acquired licences are typically added to the EA without rationalisation. Each acquisition should trigger an immediate licence review to harmonise tiers, remove duplicates, and align the acquired estate with the parent company’s licensing strategy. See 10 Costly Microsoft Licensing Mistakes for more on acquisition-related traps.
Engineering Firms Must Negotiate Project-Based True-Up Provisions
A fixed licence commitment sized for 30,000 users when active headcount fluctuates between 24,000 and 32,000 guarantees overpayment for most of the year. The project-based true-up model we negotiated — a 24,000-licence base with quarterly additions at pre-negotiated rates — saved the firm an estimated £1.2M annually compared to the fixed-commitment alternative. Microsoft will not offer this structure proactively; it must be negotiated with usage data that demonstrates the workforce variability. See The Microsoft True-Up Trap for strategies.
Azure Discounts Must Be Renegotiated as Consumption Grows
The firm’s Azure consumption tripled during the previous EA term, but discount tiers remained static — meaning the firm was paying near-list rates on £3M+ of annual cloud spend. Azure consumption discounts are not automatically adjusted as spend increases; they must be explicitly renegotiated through MACC commitments, Reserved Instance agreements, and Savings Plan structures. Engineering firms with growing HPC and IoT workloads should renegotiate Azure terms annually. For benchmark data, see our Microsoft EA Benchmarking Report.