Microsoft EA Renewal for a Major UK Engineering Firm — £7M Saved Over Three Years

Client Background and Challenge

A major UK-headquartered engineering company specialising in infrastructure design, construction management, and environmental engineering engaged Redress Compliance to assist in renewing its Microsoft Enterprise Agreement. With over 30,000 professionals operating across the United Kingdom, Europe, the Middle East, Africa, and Asia-Pacific, the firm delivers complex civil infrastructure projects including transportation networks, water treatment facilities, energy infrastructure, and urban development programmes.

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, Microsoft Project for portfolio management, Power BI for executive reporting, Teams as the primary collaboration platform, and SharePoint for engineering document management including version-controlled CAD drawings. The annual Microsoft spend exceeded £16 million, making Microsoft the firm's single largest software vendor.

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 to 40% of E5 licences were assigned to employees who used only E3-level features. Duplicate licences from two consultancy acquisitions had created 3,200 unnecessary licence assignments. Azure consumption had tripled during the previous EA term, but discount tiers remained static. Active headcount fluctuated between 24,000 and 32,000 depending on the project pipeline, yet the EA committed to a fixed 30,000 licence count based on peak headcount.

Phase 1: Detailed Deployment Analysis

Redress 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. Every licence assignment was mapped against actual feature utilisation by department, region, and project team using Microsoft 365 admin centre data, Azure cost management reports, and Teams analytics.

The analysis found: 8,400 users on E5 utilising only E3-level features (£2.1M annual waste); 3,200 inactive and duplicate licences from acquisitions (£1.15M annual waste); orphaned Azure virtual machines from completed projects and over-provisioned storage (£580K annual waste); and Azure discount tiers static despite consumption tripling. Total identified waste: £4M to £5M per year.

Phase 2: Licence Optimisation — £4.2M Annual Savings

8,400 users were reclassified from E5 to E3, with targeted E5 add-ons applied only where specific features (Phone System, Information Protection) were actually required. This right-sized the licence tier to actual feature usage without removing any functionality that employees actively relied on: £2.1M annual saving. 3,200 inactive and duplicate licences were decommissioned, including harmonising the two acquired companies onto consistent tiers aligned with the parent firm's licensing strategy: £1.15M annual saving. Azure orphaned resources were decommissioned, and predictable engineering workloads were converted to 3-year Reserved Instances (40% savings) with Azure Savings Plans adopted for variable compute: £960K annual saving. On-premises Project Server and Visio desktop deployments were retired in favour of cloud-based equivalents, reducing licence count and eliminating server maintenance: £490K annual saving.

Phase 3: Strategic Roadmap Development

A three-year roadmap was created addressing three strategic priorities. First: expansion of high-performance computing for structural analysis, environmental modelling, and BIM rendering — with phased adoption milestones to secure pre-negotiated rates rather than at-list mid-term additions. Second: early-adopter Microsoft Copilot pricing was negotiated for 800 seats at 35% below list price for engineering documentation and bid preparation, locked in as part of the renewal terms. Third: provisions for Microsoft Fabric consolidation of project analytics were included in the EA for phased adoption without requiring mid-term renegotiation.

Phase 4: Benchmarking

Redress benchmarked the firm's Microsoft pricing against our database of EA renewals for global engineering, construction, and infrastructure companies. The benchmarking found M365 E3/E5 per-user pricing 15 to 20% above market, Azure consumption discounts 18 to 25% below achievable rates, and annual price escalation at 5% when comparable firms were achieving 2.5 to 3.5%. Google Workspace and AWS indicative proposals were also obtained for specific workloads — not as a migration threat, but as credible pricing benchmarks demonstrating alternatives existed.

Phase 5: Negotiation and Renewal Execution

Direct negotiation support was provided through three rounds of discussions with Microsoft's UK enterprise team. Annual EA cost was reduced from £17.2M (Microsoft's proposed 5% increase) to £12.1M. A project-based true-up model was negotiated: a 24,000-licence base with quarterly flexibility for project staff at pre-negotiated rates, eliminating the penalty of paying for peak headcount year-round. Annual price escalation was reduced from Microsoft's proposed 5% to a 3% cap. Azure MACC discount tiers of 18 to 25% were secured, structured to increase as Azure consumption grows. Annual true-down rights were secured allowing the firm to reduce licence counts if the project pipeline contracts.

Key Lessons for UK and Global Engineering Firms

Post-acquisition licence harmonisation is non-negotiable. When engineering firms acquire smaller companies, acquired licences are typically added without rationalisation. Each acquisition should trigger an immediate licence review. Engineering firms must negotiate project-based true-up provisions — a fixed licence commitment sized for peak headcount when active headcount fluctuates guarantees overpayment.

Azure discounts must be renegotiated as consumption grows. Azure consumption discounts are contractually fixed at renewal levels and do not automatically adjust as spend increases. Renegotiating through MACC commitments, Reserved Instances, and Savings Plans is essential as cloud adoption grows. For more on avoiding common traps, see The Microsoft True-Up Trap and our Microsoft Assessment Tools.

Visit the Microsoft Knowledge Hub or explore our EA Optimisation Service, Contract Negotiation Service, and Microsoft Advisory Services.