How to Determine What to Renew or Drop in Your Microsoft EA Renewal
Determining precisely which licenses to renew or drop during your Microsoft Enterprise Agreement (EA) renewal is critical for managing IT budgets effectively. A detailed audit of your licensing landscape and usage patterns can yield significant cost savings and efficiency gains.
Here’s how you can accurately decide what licenses you need—and which you can safely eliminate—from your next EA renewal.
Read our Microsoft EA renewal FAQs.
Conducting a Detailed License Audit
The first step is performing a thorough audit of your existing Microsoft licenses. This audit involves carefully evaluating deployment and usage patterns across your organization. Here’s what to focus on:
- License Inventory:
Identify every license currently covered by your EA. - Usage Data:
Examine how each product is being used:- Active usage: Licenses in regular use.
- Inactive licenses: Licenses rarely or never accessed.
- Unassigned licenses: These are Purchased licenses that were never allocated.
Example:
Suppose your company has 1,000 licenses for Microsoft Visio. Upon auditing, you discover that only 600 licenses are regularly used. The remaining 400 licenses represent unnecessary spending—potential savings if you drop them during renewal.
Identifying Underutilized and Unused Licenses
After gathering usage data, categorize licenses clearly:
- Consistently Unused:
Licenses showing minimal or zero usage over the past year. - Sporadically Used:
Licenses are occasionally used but not consistently required. - Core or Essential:
Licenses are heavily relied upon daily.
Licenses that are consistently unused should be prime candidates for dropping. Those that are sporadically used may benefit from reassignment or consolidation.
Example:
A large enterprise discovered 300 idle Office 365 E5 licenses, primarily assigned to users who rarely needed advanced security or analytics features. Dropping or downgrading these licenses significantly lowered renewal costs.
Read Steps Involved in Renewing a Microsoft Enterprise Agreement (EA).
Evaluating User and Product Mix
Determining license renewals isn’t just about quantity; it’s also about ensuring the correct product mix and editions.
- Edition Evaluation:
Assess whether users fully utilize advanced features in premium license editions (e.g., Office 365 E5 vs. E3). Users without fully leverage premium features can be downgraded without losing essential productivity tools. - Product Consolidation:
Evaluate overlapping software that provides similar functionality. For instance, if your users have Teams and Skype licenses, transitioning fully to Teams can eliminate redundancy and simplify management.
Example:
A multinational retailer downgraded 25% of its employees from Microsoft 365 E5 licenses to E3 editions because those employees rarely used advanced security and analytics capabilities. This adjustment led to substantial cost reductions while maintaining productivity.
Cost-Benefit Analysis for New or Emerging Needs
Consider the potential cost-benefit of adopting new Microsoft products during renewal. Align new acquisitions with realistic business needs and growth plans:
- Azure and Cloud Services:
Evaluate your cloud migration strategy. Are you increasing or decreasing Azure usage? - Emerging Products:
Products like Teams Phone or Power BI can offer benefits if properly adopted but only if users truly need these tools.
Balance new product adoption carefully against expected usage to prevent future shelfware.
Example:
A financial services company integrated Teams Phone into their EA renewal based on carefully assessing user requirements, ensuring efficient spending aligned with actual communication needs.
Real-World Case Studies and Results
Case studies underscore the financial benefits of meticulous license auditing:
- Healthcare Organization:
Conducted a detailed audit and avoided renewing 20% of their licenses, saving hundreds of thousands annually. - Manufacturing Firm:
Reduced unnecessary Visio and Project licenses by 30%, reallocating those funds to more strategic IT initiatives.
These real-world examples demonstrate tangible financial benefits from carefully evaluating licenses before EA renewal.
Creating a Renewal Action Plan
An effective renewal action plan involves the following structured approach:
- Step 1: Inventory Current Licenses
- List every license covered by your current EA.
- Step 2: Analyze Usage Patterns
- Use Microsoft’s built-in reporting or third-party tools for accuracy.
- Step 3: Categorize and Prioritize
- Separate licenses into actively used, sporadically used, or unused.
- Step 4: Engage Stakeholders
- Validate audit findings and confirm future needs with departmental stakeholders.
- Step 5: Develop a License Optimization Strategy
- Identify which licenses you’ll drop, downgrade, or renew.
- Plan precisely how you’ll allocate licenses for the next contract period.
Communication and Implementation
Transparent communication ensures smooth adoption and minimal disruption:
- Internal Communication:
Inform departments about upcoming changes to licenses and editions. - User Guidance:
Provide instructions or training if users will experience changes to their software tools. - Monitor and Adjust:
Continually track software usage post-renewal to ensure optimal license utilization.
Common Pitfalls to Avoid
Beware of common mistakes organizations make during EA renewal audits:
- Incomplete Audit:
Missing or inaccurate data leads to poor decision-making. - Stakeholder Misalignment:
Poor internal communication can result in resistance or unintended productivity loss. - Overlooking Future Needs:
Avoid shortsightedness; consider future organizational growth or downsizing when determining license quantities.
Conclusion and Next Steps
A detailed license audit is the cornerstone of a strategic Microsoft EA renewal. Carefully analyzing current license utilization enables your organization to make informed decisions about renewals, editions, and quantities. Organizations consistently achieve significant cost reductions and operational efficiency by identifying unused or underutilized licenses.
For a successful EA renewal:
- Perform a thorough audit.
- Categorize licenses.
- Engage stakeholders early.
- Strategically downgrade, drop, or renew licenses based on detailed insights.
Adopting this structured approach ensures your organization renews precisely the licenses needed, maximizing the value of your Microsoft investment.
