📊 Free Resource: Microsoft EA Benchmarking Report 2025–2026
What are global enterprises actually paying for M365, Azure, and Copilot? Our benchmarking report reveals real pricing data from hundreds of EA negotiations — no vendor spin, no Microsoft marketing.
- E3 and E5 pricing benchmarks by organisation size
- Azure commitment discount ranges and structures
- Copilot negotiation outcomes and adoption data
- Unified Support cost benchmarks across tiers
Why Microsoft Enterprise Agreement Negotiation in 2026 Demands a New Approach
If you're approaching a Microsoft Enterprise Agreement negotiation in 2026 the same way you did three years ago, you're going to overpay. The Microsoft licensing landscape has shifted more in the last 18 months than in the previous decade, and the changes all favour Microsoft's bottom line — not yours.
The biggest shift is Copilot. Microsoft's AI add-on at $30 per user per month is being pushed into every EA conversation, and for a 10,000-employee organisation, that's $3.6M per year in new spend — for a tool that most of those employees won't meaningfully use. Azure consumption commitments now dominate deal values, with Microsoft pushing pre-paid commitments of $5M, $10M, even $50M+ that lock you into cloud spending before you've validated your actual consumption. And the old volume discounts? Microsoft is dialling them back across the board.
Meanwhile, Microsoft is quietly transitioning smaller enterprises away from the traditional EA toward the Microsoft Customer Agreement (MCA) — a more flexible contract structure that also gives Microsoft more pricing power. If you have fewer than 2,400 users in certain markets, you may not even be offered an EA at your next renewal. Understanding the differences between EA, CSP, and MCA is now essential, not optional.
Microsoft's fiscal year ends June 30. Q4 (April through June) is when sales teams are under maximum pressure to close, which means maximum discount potential for you — if you've done your homework. Approaching a renewal without benchmarks, without competitive alternatives, and without a structured negotiation plan is the most expensive mistake in enterprise IT.
For a primer on the fundamentals, start with What is a Microsoft Enterprise Agreement or browse our Microsoft Licensing Knowledge Hub.
Microsoft's initial renewal quote was 28% higher than the previous term. We benchmarked every line item against industry data, challenged the E5 bundle assumptions, and restructured the Azure commitment. Final outcome: a 12% reduction from the previous term — saving $4.2M over 3 years.
Read our Microsoft negotiation case studies →In 15 years of advising on Microsoft EA negotiations, I've never seen Microsoft's sales teams push this hard. Their compensation is tied to cloud revenue — Azure, M365, and Copilot adoption. Every recommendation they make serves their quota first and your needs second. That doesn't make them dishonest. It makes them predictable. And predictability is something you can use.
🔍 Don't know what you're paying vs what you should be? Get our benchmarking report.
Download the Report →Anatomy of a Microsoft Enterprise Agreement in 2026
A Microsoft Enterprise Agreement is a three-year volume licensing contract for organisations with 500 or more users. It bundles software licences (Microsoft 365, Windows, Server CALs), cloud subscriptions (Azure), and optional add-ons (Copilot, Dynamics 365, Power Platform) under a single agreement with consolidated pricing, annual true-ups, and a three-year price lock that shields you from Microsoft's annual increases — at least in theory.
But the EA isn't the only option anymore. Microsoft now offers several agreement structures, each with different trade-offs on cost, flexibility, and negotiation leverage. Choosing the wrong vehicle can cost you millions. For a detailed comparison, see our Microsoft EA vs CSP vs MCA guide.
| Feature | EA (Traditional) | EAS (Subscription) | MCA | CSP |
|---|---|---|---|---|
| Term | 3 years | 3 years | No fixed term | Monthly/annual |
| Min. Users | 500+ (2,400+ in some markets) | 500+ | None | None |
| Price Lock | ✅ Full 3-year lock | ✅ Full 3-year lock | ❌ Prices can change | ❌ Prices can change |
| True-Down Rights | ❌ Can only add, not reduce | ✅ Can reduce at anniversary | ✅ Flexible | ✅ Cancel monthly |
| Discount Potential | Highest (10-40%) | High (10-30%) | Low-Medium | Low |
| Software Assurance | ✅ Included | N/A (subscription) | Varies | N/A |
| Best For | Large, stable enterprises | Enterprises needing flexibility | Mid-size / growing orgs | Small / variable orgs |
The true-up is the mechanism that catches many organisations. Once a year, you declare any additional licences you've added and pay for them at your contracted rates. But under a standard EA, you can only go up — never down. If you over-provisioned in Year 1 and your headcount shrinks, you're still paying for those licences through Year 3. The EAS (Enterprise Agreement Subscription) variant addresses this by allowing true-downs at each anniversary, trading perpetual ownership for flexibility.
For more on EA fundamentals, read the Microsoft EA FAQs or explore the benefits of a Microsoft Enterprise Agreement.
The 12-Month Microsoft EA Renewal Timeline
The single biggest mistake in Microsoft EA renewal strategy is starting too late. If you're three months from expiry and haven't begun negotiating, Microsoft owns the timeline. They know you can't switch vendors, can't let the EA lapse, and can't credibly threaten to walk away. Start at T-12 months. Use the time to build genuine leverage.
Form the Renewal Team & Audit Usage
Assemble a cross-functional team: IT, Finance, Procurement, Legal. Begin a full licence usage audit — identify shelfware, underutilised E5 seats, Azure over-provisioning, unused add-ons.
Benchmark Pricing & Set Strategy
Benchmark your current EA pricing against industry data. Define your negotiation goals, budget limits, and walk-away points. Identify competitive alternatives (Google Workspace, AWS) to create credible pressure.
Request Microsoft's Initial Quote
Get Microsoft's renewal proposal in writing. This is their opening position — expect it to be 20-30% higher than your current spend. Don't react emotionally. Compare it to your benchmarks.
Intensive Negotiation Rounds
Begin formal counter-offers. Expect 2-4 rounds of back-and-forth. Challenge every line item: E3/E5 mix, Azure commitment, Copilot pricing, Unified Support rates, add-on bundles. Escalate to senior Microsoft management if needed.
Lock Terms & Legal Review
Get every negotiated term in writing. Have legal review the contract for auto-renewal, audit clauses, SLAs, data portability, and termination provisions. Verbal promises from Microsoft sales reps are worthless.
Final Sign-Off & Onboarding
Sign only when every clause is verified. Update internal systems, brief IT admins, adjust licence assignments, set up Azure cost monitoring, and schedule any included training or credits.
Monitor, Optimise, Plan Ahead
Track usage vs entitlements monthly. Schedule a mid-term optimisation review. Set a T-12 calendar reminder for the next renewal. The cycle never stops.
For detailed guidance on each phase, read our Microsoft EA Renewal Playbook and EA Negotiation Timeline guide.
📋 Need a renewal roadmap? We build them for enterprises worldwide.
Microsoft EA Optimization Service →Microsoft EA Pricing — What You Should Actually Be Paying
Microsoft's list prices are public, but what enterprises actually pay varies wildly. A 10,000-seat organisation that negotiates well will pay 25-40% less than one that accepts Microsoft's first offer. That gap can easily exceed $5M over a three-year EA term. Knowing the benchmarks is your single most powerful negotiation tool.
| Component | List Price | 10,000 Seats | 25,000 Seats | 50,000+ Seats |
|---|---|---|---|---|
| M365 E3 | $396/user/year | $260–320 | $220–280 | $195–240 |
| M365 E5 | $684/user/year | $460–560 | $390–480 | $340–420 |
| M365 Copilot | $360/user/year | $290–340 | $265–320 | $250–300 |
| Azure MACC | Pay-as-you-go | 5–10% discount | 8–12% discount | 10–15% discount |
| Unified Support | % of spend | 10–14% | 8–12% | 6–10% |
The numbers above are indicative ranges from negotiations we've advised on. Your actual pricing depends on your negotiating skill, timing (Q4 is best), competitive alternatives, and Microsoft's strategic interest in your account. Microsoft applies 5-15% price increases on renewals if you don't negotiate a cap. The three-year price lock in an EA is your protection — but only if you lock in a good rate to begin with.
For deeper pricing analysis, download our Microsoft EA Benchmarking Report or read our guide to benchmarking Microsoft EA pricing. See also our Microsoft EA pricing analysis for large enterprises.
Most consultants say "negotiate harder." I say "negotiate smarter." The biggest savings come not from pushing Microsoft on price but from not buying what you don't need. Right-sizing your E3/E5 mix, trimming Azure over-commitments, and questioning every add-on Microsoft proposes will save you more than any discount negotiation. Get the scope right first. Then negotiate the price.
📊 Not Sure If You're Getting a Good Deal on Your Microsoft EA?
Our 2025–2026 Microsoft EA Benchmarking Report reveals what global enterprises actually pay for M365, Azure, and Copilot. Real data. No vendor spin.
Microsoft 365 E3 vs E5 — The Multi-Million Dollar Decision
The E3 vs E5 decision is where more money is wasted than in any other part of a Microsoft EA negotiation. Microsoft pushes E5 hard — their reps earn higher commissions on it, and their pitch sounds compelling: "consolidate your security stack, get advanced compliance, enable Teams Phone, and add Power BI Pro — all in one bundle." The reality is that only about 10% of the Office 365 installed base uses E5, and most enterprises that deploy it use 30% of its features.
E5 costs 50-80% more per user than E3. For a 20,000-user organisation, the difference over a three-year EA term is $4M to $8M or more. That's not a rounding error — it's a strategic decision.
⚠ Blanket E5 Deployment
- 20,000 users × $480/year (negotiated E5)
- = $9.6M/year → $28.8M over 3 years
- Most users only utilise E3-level features
- Advanced security/compliance often duplicates existing tools
- Teams Phone only needed by 30% of workforce
✅ Smart E3/E5 Mix
- 16,000 on E3 ($270) + 4,000 on E5 ($480)
- = $6.24M/year → $18.7M over 3 years
- Savings: $10.1M over 3 years
- Only power users, security teams, and execs on E5
- Targeted security add-ons for E3 users where needed
The smart approach: license 70-80% of users on E3 and reserve E5 only for roles that genuinely need its advanced security, compliance, or telephony features — security analysts, compliance officers, executives, contact centre staff. For the rest, E3 plus targeted add-ons (Defender for Endpoint, DLP) is 30-40% cheaper. Read the detailed breakdown in our E3/E5 Enterprise Licensing Negotiation Toolkit.
Microsoft pushed a blanket E5 upgrade during the EA renewal. We analysed feature usage and proved that only 1,200 users needed E5 capabilities. Keeping the remaining 6,800 on E3 saved the client $1.8M annually — $5.4M over the EA term.
Read our Microsoft EA renewal case studies →📊 E3 vs E5? We'll model both scenarios for your organisation — free.
Microsoft Optimization Services →Microsoft Copilot Licensing — The AI Upsell You Must Challenge
Copilot is the most expensive "maybe it'll be useful" purchase in enterprise IT history. At $30 per user per month ($360/year), Microsoft is asking you to bet millions that an AI assistant embedded in Word, Excel, Outlook, and Teams will deliver measurable productivity gains across your entire workforce. In every deployment I've assessed, actual active usage sits between 20-40% of licensed users. That means 60-80% of your Copilot spend is wasted.
Microsoft requires E3 or E5 as a base licence for Copilot — it's always an additional cost, never included in a bundle. The 300-seat minimum was removed in 2024, but the annual commitment per user means you can't cancel mid-term. For a 10,000-employee enterprise at full deployment, that's $3.6M per year before you've proven any ROI.
⚠ Common Trap: Microsoft bundles the Copilot conversation with an E5 upgrade — "move to E5 and we'll give you a better Copilot rate." Run the total cost. E5 + discounted Copilot almost always costs more than E3 + selective Copilot for the users who will actually use it. Don't let a Copilot discount drive an E5 upgrade you don't need.
Copilot Negotiation Tactics That Work
For detailed guidance, read our articles on negotiating Microsoft 365 Copilot licensing, what CIOs need to know about Copilot licensing, and the CIO Playbook for adopting Copilot. See also our guide to Microsoft AI licensing for Copilot and Azure OpenAI.
Microsoft wanted all 25,000 users on Copilot at $30/month. We negotiated a 2,000-user pilot at $24/month with scale-up contingent on proven ROI metrics. This avoided $7.2M in unnecessary Year 1 spend while still giving the organisation access to AI capabilities where they mattered most.
Read our Microsoft negotiation case studies →🤖 Microsoft Pushing Copilot? Don't Sign Without Independent Advice.
Copilot can add millions to your EA. We've helped enterprises negotiate Copilot deployments that are 30-40% cheaper than Microsoft's opening offer — and structured to scale only when ROI is proven.
Azure Commitment Negotiation — Don't Pre-Pay What You Won't Use
Azure consumption commitments — formally known as MACC (Microsoft Azure Consumption Commitment) — are pre-paid annual commitments to Azure cloud spending. Microsoft incentivises large commitments with discount tiers: commit $5M/year, get a 5-8% discount on consumption rates; commit $20M+, push toward 10-15%. The maths sounds attractive until you're 18 months into a three-year EA and your actual Azure usage is 60% of what you committed to.
The trap is over-commitment. Microsoft's sales teams project aggressive growth curves ("your cloud migration will double Azure spend in Year 2!") and push you to commit based on their projections, not your data. Pre-committed funds do not roll over by default. If you commit $10M/year but only consume $7M, that $3M is gone.
⚠ Over-Committed
- $15M/year Azure MACC
- Actual usage: $9M/year
- $6M/year unused = $18M wasted over 3 years
- Microsoft keeps the unused commitment
- No rollover, no reallocation
✅ Right-Sized Commitment
- $10M/year Azure MACC (based on historical data)
- Actual usage: $9M base + $2M growth
- Overage at slightly higher rates — but no wasted funds
- Negotiated rollover for unused balance
- Flexibility to reallocate to other Microsoft services
Your Azure commitment should be a floor, not a ceiling. Base it on 12-18 months of historical usage plus only documented, budgeted migration projects. Factor in Azure Hybrid Benefit (use existing on-prem licences for up to 40% savings on VMs) and Reserved Instances (30-60% savings vs pay-as-you-go). And always negotiate rollover provisions — Microsoft resists, but it's possible.
For deeper strategies, read our dedicated article on negotiating Azure commitments in your Microsoft EA.
The previous EA had a $15M/year Azure MACC but actual usage was only $9M. We restructured the commitment to $10.5M, recovered $12M in unused funds through reallocation to other Microsoft services, and negotiated rollover provisions for the new term.
Read our Microsoft negotiation case studies →☁️ Azure commitment too high? We renegotiate them — with data Microsoft can't argue with.
Microsoft Contract Negotiation Service →Microsoft Unified Support — The Hidden Cost Centre
Microsoft Unified Support replaced the old Premier Support model in 2017, and the pricing change has been devastating for enterprises. Where Premier charged for specific incident packs and hours, Unified Support is priced as a percentage of your total Microsoft spend. As your EA grows, your support cost grows automatically — regardless of whether you use more support.
The three tiers are Core (~8-10% of spend), Advanced (~12-15%), and Performance (~15-20%). For a $10M/year Microsoft EA, that means $1M-$2M per year in support fees alone. Over the three-year EA term, Unified Support can easily exceed $3-6M — and most of that is pure margin for Microsoft.
The most effective counter-tactics: negotiate the percentage rate down aggressively (enterprises have pushed from 14% to 7.5%), cap the support fee in absolute dollar terms (not just a percentage), evaluate whether you really need the Advanced or Performance tier, and explore third-party support alternatives that deliver comparable service at 50-60% lower cost.
For detailed strategies, read our guides to understanding Unified Support costs and negotiating Unified Support contracts.
Unified Support was costing 14% of Microsoft spend — roughly $1.4M/year. We negotiated the rate to 7.5% and introduced third-party support for non-critical systems. Total savings: $800K per year.
Read our Microsoft EA renewal case studies →💰 Paying Too Much for Microsoft Unified Support?
Most enterprises overpay by 30-50% on Unified Support. We negotiate the rate down, cap the cost, and evaluate whether third-party alternatives could save you more.
How Microsoft Negotiates — And How to Counter Every Tactic
Microsoft negotiates Enterprise Agreements every single day. Your team does it once every three years. That asymmetry is where Microsoft makes its money. Understanding how Microsoft negotiates — and having a counter-tactic for every play in their book — is what separates a $30M EA from a $20M EA.
For a deeper playbook, read our guides on key leverage points for Microsoft deals, the 20 must-know negotiation strategies, and top EA mistakes to avoid.
⚠️ Facing a Microsoft EA Renewal? Don't Go In Alone.
Microsoft negotiates these deals every day — you do it once every three years. Our team has advised on 200+ EA negotiations and saved enterprises over $500M in Microsoft spend.
Contract Terms That Matter — What Your Legal Team Must Check
The discount percentage gets all the attention, but contract terms are where the real money is made or lost. A 25% discount means nothing if the contract includes an auto-renewal clause that locks you in at inflated rates, or audit provisions that give Microsoft unlimited access to your systems.
For detailed contract guidance, read the Microsoft EA Contract Guide for Legal Teams, our analysis of negotiable clauses in Microsoft agreements, and the Microsoft Contract Terms & Negotiation guide. For M&A scenarios, see Microsoft Licensing in M&A: EA Novation and Transfer Strategies.
⚠ Critical Warning: Verbal commitments from Microsoft sales reps are not binding. Every discount, every flexibility provision, every special term must appear in the written contract. We've seen clients lose millions because a rep promised "we'll work something out at true-up" — and then the rep left Microsoft six months later.
⚖️ Legal team needs help with Microsoft contract terms? We wrote the guide.
EA Contract Guide for Legal Teams →Microsoft Licensing Cost Optimisation — Saving 20-40% on Your Spend
Most organisations are paying 20-40% more than they should for Microsoft software. The savings don't come from one magic trick — they come from systematic optimisation across every component of the EA.
| Strategy | Typical Savings | Effort | Time to Value |
|---|---|---|---|
| Right-size E3/E5 mix — Downgrade users who don't need E5 features | 15–35% | Medium | At renewal |
| Eliminate shelfware — Remove unused Visio, Project, Power BI Pro, Dynamics | 5–15% | Low | At true-up |
| Optimise Azure — Reserved Instances, Hybrid Benefit, Auto-Scaling | 20–40% | Medium | 1–3 months |
| Negotiate Unified Support — Push % down or switch to third-party | 30–50% | Medium | At renewal |
| Copilot right-sizing — Limit to users with proven adoption | 50–80% | Low | At anniversary |
| Contract consolidation — Combine multiple agreements for volume | 10–20% | Low | At renewal |
| Competitive pressure — Credible evaluation of Google/AWS alternatives | 5–15% | High | 6–12 months |
Timing is everything. Negotiate during Microsoft Q4 (April-June) for maximum sales pressure and discount potential. And remember: the goal isn't the biggest discount — it's the lowest total cost of ownership. A 10% discount on the right-sized EA beats a 25% discount on a bloated one every time.
We conducted a complete EA restructure: consolidated 4 separate Microsoft agreements, right-sized the E3/E5 mix (moved 38,000 users from E5 to E3), capped Azure commitments at historical consumption, and removed 8,000 unused licences. Total 3-year savings: $18M.
Read our Microsoft negotiation case studies →For more detailed examples, see our Microsoft EA renewal case studies and EA price reduction strategies. Also read the top 20 tips for a successful EA renewal.
📈 We've Saved Enterprises $500M+ on Microsoft Licensing.
From EA renewals to Azure optimisation to Copilot negotiations — we know where the savings are. And with our Pay-When-We-Save model, you only pay when we deliver measurable results.
Microsoft EA Renewal Checklist — 15 Points Before You Sign
For more on closing the deal right, read Final Steps and Checks Before Signing Your Microsoft EA.
📞 Want to Talk to a Microsoft Licensing Expert?
Whether you're preparing for an EA renewal, negotiating Copilot pricing, or trying to cut your Microsoft spend — we can help. No obligation. No sales pressure. Just honest advice from former licensing executives.