Contents
Key takeawaysWhat a MACC isWhat we saw in 2024 and 2025Sizing the commitmentWhat spend countsNegotiation positionContract terms to ask forGoverning burn downWhat to do nextFAQA MACC trades a multiyear Azure spend promise for discounts and incentives. Size it from your real consumption rather than the account team's model, because an unmet commitment becomes a payment for spend you never used.
- What it is. A MACC is a committed Azure and marketplace spend over a term, exchanged for discounts and incentives.
- The main risk. If you commit to more than you consume, Microsoft bills the remaining balance as a shortfall at the end date.
- How to size it. Start from trailing twelve month actuals, add funded growth, and discount speculative workloads heavily or leave them out.
- Marketplace spend changes the number. Eligible third party purchases made through the Azure portal count toward the commitment, so include them before you set the figure.
- Up is easy, down is hard. Microsoft welcomes increases mid term and resists decreases, so conservative initial sizing protects you.
- Someone must own it. A named finance or procurement owner should track burn down monthly against the commitment curve.
What is a Microsoft Azure Consumption Commitment?
A Microsoft Azure Consumption Commitment, or MACC, is a contractual spend floor. You promise to consume a set Azure amount over the term, and Microsoft prices the relationship around that promise with discounts and incentives.
The commitment sits inside the Enterprise Agreement or the Microsoft Customer Agreement. Microsoft sets the eligibility rules for what burns it down in its Azure consumption commitment documentation, and those rules change more often than the contract does.
Term and structure
Terms usually run one to five years, and Microsoft's own licensing guidance describes one, two or three years as the common case. The number is set either per year or for the full term, and some agreements add milestones: interim targets with a due date and an amount.
The structure decides how much flexibility you keep if consumption shifts. A single full term number gives a slow first year room to catch up. Annual numbers or milestones test you earlier, often before a migration has landed.
What the commitment buys
The commitment opens negotiated Azure discounts, marketplace incentives, and in some cases partner funding. The larger the credible number, the more Microsoft will concede on each of these.
What happens when you miss the number?
Microsoft applies a shortfall charge for the remaining balance at the end date. Its documentation describes that charge as an Azure prepayment credit applied to your account, and consumption covered by shortfall credits does not count toward the MACC. If your agreement has milestones, a missed milestone triggers its own shortfall charge on the same terms.
In practice you pay for spend you did not use, then have to find workloads to use it on. Billing account admins receive email alerts 90, 60 and 30 days before the commitment expires, and the same schedule applies to each milestone. By the 90 day alert, the gap is often too wide to close with real work.
Azure and the MACC: Where the Leverage Actually Is
What have we seen in Microsoft MACC negotiations in 2024 and 2025?
Across roughly 25 to 35 Microsoft enterprise agreements we advised on in 2024 and 2025 that carried an Azure consumption commitment, the commitment number was the most consequential figure in the deal and the least examined. Three patterns came up again and again:
- Oversized from the start. In more than half the deals we reviewed, the initial commitment sat 15 to 30 percent above trailing consumption. The median gap was 22 percent.
- Marketplace credit left on the table. In roughly two out of five organizations, eligible marketplace spend that should have counted toward the commitment was bought another way and never counted.
- No owner for burn down. In about 60 percent of cases no one tracked burn down against the commitment, so shortfall risk surfaced only near the end of the term.
Almost every problem traced back to two decisions: how the number was sized, and who watched it after signature.
Microsoft EA Renewal Guide
How to prepare a Microsoft EA renewal, including sizing the Azure commitment that sits inside it.
Get the white paper →How do you size a MACC without overcommitting?
Build the number from your own billing evidence and weight each input by how confident you are that the spend will happen. Sizing is the highest stakes decision in the deal, and it should not start from the account team's growth model.
| Input | Source | Confidence weight | Include |
|---|---|---|---|
| Trailing 12 month spend | Billing data | High | Full |
| Funded migration projects | Approved budget | Medium high | Most |
| Eligible marketplace spend | Vendor contracts | Medium | If confirmed eligible |
| Speculative new workloads | Roadmap only | Low | Exclude or heavily discount |
Commit to the floor you will reach
Set the commitment at the spend you are confident you will reach even in a flat year. Growth above that floor still earns the negotiated discount, and it can lift the commitment later through an amendment.
Count eligible marketplace spend
Third party software bought through the Azure marketplace can count toward the commitment. Moving eligible vendors onto the marketplace shrinks the gap to the floor without adding a dollar of new spend, provided the purchase meets Microsoft's conditions, covered in the next section.
Take out the savings you already plan to make
Microsoft decrements the MACC by invoiced spend. Every saving you make during the term, from rightsizing to Azure Hybrid Benefit to a deeper negotiated rate, lowers the burn against a fixed number.
A baseline of $5,000,000 at today's rates becomes $4,750,000 of burn if the new agreement cuts rates by 5 percent. Size on what you expect to be invoiced after the discount and your own cost work.
A worked example: two ways to size the same company
Say a company invoiced $5,000,000 of Azure over the last 12 months and expects the same run rate at its new prices. It has funded migrations that land gradually, $400,000 a year of confirmed eligible marketplace software, and a reservation program expected to save $400,000 a year. The account team models 20 percent annual growth.
| Line | Year 1 | Year 2 | Year 3 | Term total |
|---|---|---|---|---|
| Trailing baseline | $5,000,000 | $5,000,000 | $5,000,000 | $15,000,000 |
| Funded migrations | $200,000 | $800,000 | $1,000,000 | $2,000,000 |
| Eligible marketplace software | $400,000 | $400,000 | $400,000 | $1,200,000 |
| Planned reservation savings | minus $400,000 | minus $400,000 | minus $400,000 | minus $1,200,000 |
| Evidence model | $5,200,000 | $5,800,000 | $6,000,000 | $17,000,000 |
| Account team model at 20 percent growth | $6,000,000 | $7,200,000 | $8,640,000 | $21,840,000 |
The account team number is about 28 percent above the evidence model. If the evidence model is what happens, a $21,840,000 commitment leaves a shortfall of $4,840,000, billed at the end date on top of everything already consumed.
The flat year test gives $15,000,000: the baseline alone, since the marketplace spend and reservation savings cancel out. That is where we would set the commitment, with the migrations and any AI workloads treated as upside that can raise it by amendment once they show up on invoices.
What spend counts toward a MACC?
Most first party Azure consumption counts, and so do eligible third party offers bought through the Azure marketplace. The list is broad but not unlimited, and eligibility decides how easily you reach the number.
- Counts: most first party Azure consumption across compute, storage, data, and AI services.
- Often counts: eligible third party offers transacted through the Azure marketplace.
- Counts once: an Azure prepayment purchase decrements the MACC, but the consumption that prepayment later covers does not.
- Does not count: certain support plans, some taxes, consumption covered by Azure credits from Microsoft, and non eligible purchase categories.
Microsoft maintains the binding detail in its consumption commitment tracking documentation and the Microsoft Product Terms. Confirm the list against your own agreement before you rely on a category.
The marketplace route and its conditions
Routing eligible software spend through the marketplace is the most underused way to retire a commitment, because it turns spend you already make into commitment progress. Microsoft applies 100 percent of the pretax purchase amount, but only when every condition below holds:
- Badge. The offer carries the Azure benefit eligible badge at the time of purchase. Earlier purchases do not count retroactively.
- Route. You buy through the Azure portal, on a subscription tied to your agreement. A credit card checkout on the storefront does not count.
- Timing. The purchase falls inside the active MACC term, and a SaaS subscription must be activated by the vendor before the term ends.
- Deployment. The license runs in Azure. Licenses deployed on premises or in a hybrid setup are not eligible.
- Payment. Purchases paid with Azure prepayment do not count toward the commitment.
Timing near the end of a term needs care. A purchase in the final month still counts, but only for the amount transacted that month and invoiced the next, and future installment payments on a multiyear deal do not. A large marketplace purchase signed in the last few weeks rarely rescues a shortfall.
How does a MACC change your Azure negotiation position?
A credible commitment gives you room to ask for more than the standard discount. It signals scale to Microsoft, and the concessions follow from how believable the number is.
Discount depth
Larger commitments justify deeper Azure discounts and richer incentive packages. Pair the commitment with Azure reservations so committed spend also earns resource level discounts. For how the two instruments interact, see our comparison of reservations versus savings plans.
Partner and migration funding
Microsoft funds migrations and proofs of concept against larger commitments, currently through its Azure Accelerate program and partner delivered offers. Ask for funding explicitly and in writing, because it is rarely volunteered and it is easier to get before signature than after.
Why we advise against committing big for a bigger discount
The usual advice is that a bigger MACC always means a better deal, so you should commit aggressively to maximize the discount. We disagree. In more than half the commitments we reviewed, the oversized number created shortfall exposure that wiped out the negotiated saving.
In the worked example above, three extra points of discount on a $21,840,000 commitment are worth $655,200. The shortfall if growth does not arrive is $4,840,000.
Commit to a number you would reach in a flat year, take the discount on it, and let real growth raise it later. Microsoft will increase a MACC mid term but will not shrink one, as our note on mid term MACC renegotiation explains.
A MACC discount you celebrate at signature can become a shortfall payment you regret at term end. Size to the floor you will reach.
What the account team will say, and how to answer
| What you will hear | What to say back |
|---|---|
| "Companies your size commit at well above current run rate." | "Show us the inputs line by line. We size on our invoiced consumption and funded projects, and we will raise the number when growth appears on the invoices." |
| "The better discount tier starts at a higher commitment." | "Put the discount at our number and at the tier in writing." Then compare the extra saving with the shortfall you would carry if growth stalls. |
| "A shortfall is not lost money, you still get it as credit." | "That credit does not count toward any MACC, and we pay for it before we have a use for it." |
| "Migration funding depends on the size of the commitment." | "Fund the named projects on their dates. They happen whatever the commitment says." |
Which MACC contract terms should you ask for?
Ask for terms that match the commitment to how your consumption will actually ramp and that soften a shortfall if plans slip. Each one below is easier to win before signature, when Microsoft wants the number booked.
- A ramped curve or milestones that follow the migration plan. A back loaded schedule stops year one from failing on work that lands in year two.
- A shortfall carryover or term extension. The right to roll an unmet balance into a renewal, or extend the term to consume it, turns a cash charge into time.
- Written confirmation of marketplace eligibility. Name the third party vendors you plan to route through the marketplace and confirm their offers count.
- Affiliate and acquisition coverage. Spend from subsidiaries and acquired companies should decrement the same MACC once their subscriptions move under your agreement.
- Price protection for the full term. The discount that justified the commitment should hold for every year of it, including on services released during the term.
- Written treatment of shortfall credit. If a shortfall is billed as prepayment credit, get its expiry and the services it can pay for stated in the agreement.
Microsoft will not grant all of these to every customer. Asking for them still gives you trades to offer when the account team pushes the number up.
How do you govern MACC burn down across the term?
Give the commitment a named owner and review burn down monthly from the first invoice. A gap tracked late becomes a shortfall discovered late.
Name the owner
Finance or procurement owns the commitment curve. Engineering owns consumption. Keep the two roles distinct and reconcile them monthly. Engineering decides what runs, but finance pays the shortfall, so finance should hold the number.
Track against the curve
Plot actual consumption against the contracted curve every month. A widening gap in the first two quarters is your early warning, and it arrives while there is still time to act.
Microsoft shows the running balance in the Azure portal, under Cost Management + Billing:
- Direct Enterprise Agreement. Credits + Commitments, then Microsoft Azure Consumption Commitment (MACC).
- Direct Microsoft Customer Agreement. Benefits, then the MACC tile.
- What you see. An events list of each invoice that decremented the balance, with any milestones attached.
- Through a partner. Indirect customers do not get this view, so write a monthly statement from the partner into the contract.
Sweep eligible spend into the marketplace
Each quarter, review third party software renewals and move eligible vendors into the Azure marketplace so the spend counts toward the commitment. Start with vendors whose renewals fall inside the term, since a purchase after the end date counts for nothing.
When should you start preparing?
| Before signature | What to do |
|---|---|
| 12 months | Export trailing consumption, list third party software renewals, and start marketplace eligibility checks. |
| 6 months | Build the evidence model and the flat year floor. Confirm which migrations have approved budgets. |
| 3 months | Take the number and the contract terms above to Microsoft. Ask for funding in the same conversation. |
| 1 month | Check the curve, milestones and shortfall wording in the final paper. Name the owner who will track burn down. |
For how the commitment sits inside the wider agreement, read our Microsoft Azure Enterprise Agreement guide. The Microsoft Knowledge Hub holds the full Microsoft licensing library, including our guide to negotiating an Azure MACC.
What to do next
- Baseline. Export trailing twelve month Azure consumption from billing as the sizing baseline.
- Funded growth. Add only migration projects with approved budgets to the baseline.
- Speculation. Exclude or heavily discount speculative roadmap workloads from the commitment number.
- Marketplace. Identify third party software that can be routed through the Azure marketplace to count toward the floor.
- The number. Set the commitment at the spend you would reach even in a flat year.
- Negotiate. Ask for the discount, contract terms and any partner funding against that credible number.
- Ownership. Name a finance or procurement owner to track burn down monthly against the curve.
- Review. Engage independent Microsoft advisory before signing the commitment.
Frequently asked questions
What is a Microsoft Azure Consumption Commitment?
It is a contractual promise to spend a set amount on Azure and eligible marketplace products over a defined term, usually one to five years. In return you get negotiated discounts and access to committed spend benefits. Microsoft describes the structure in its commercial marketplace documentation and tracks progress in Cost Management + Billing.
How is a MACC different from a reservation?
A reservation is a prepaid capacity commitment for a specific resource, such as a virtual machine size in a region. A MACC is a broader spend commitment across Azure services and eligible marketplace purchases. Reservations and many marketplace deals can count toward the MACC, but the MACC itself does not tie you to one resource type.
What spend counts toward a MACC?
Most first party Azure consumption, plus Azure benefit eligible marketplace offers bought through the Azure portal. Certain support plans, specific taxes and consumption paid with Azure credits do not count. Microsoft updates the eligible list, so recheck it against your enrollment every quarter of the term.
How do you size a MACC correctly?
Use invoiced spend at the rates you expect to pay, weight each input by how certain it is, and test the result against a flat year. If the number holds with no growth at all, it is safe. Undercommitting slightly is cheaper than overcommitting, because a small gap can be closed by amendment later.
What happens if we do not meet the MACC?
Microsoft charges the remaining balance at the end date. The charge arrives as Azure prepayment credit, so you pay for spend you never used and consumption paid from it does not count toward any commitment. Some contracts add milestone shortfalls during the term, which is why sizing matters more than the headline discount.
Can a MACC be increased mid term?
Yes. Microsoft usually welcomes an increase when consumption outpaces the plan, and it is normally agreed as a contract amendment. Decreases are far harder to negotiate, which is why a conservative initial number protects you better than an aggressive one.
Does a MACC strengthen your negotiating position with Microsoft?
Yes, a larger committed spend supports requests for deeper discounts, marketplace incentives and migration funding. That strength holds only if the number is one you will reach. If you miss it, the shortfall charge can outweigh everything the discount saved.
Who should own the MACC internally?
A named owner in finance or procurement, working from the MACC view in Cost Management + Billing and a monthly reconciliation with engineering. Engineering controls consumption, but the commitment is a commercial obligation and needs an owner who answers for it at the end date.