Contents
Key takeawaysWhat the renewal reopensWhy flat is not neutralWhere the savings sitWhat our renewals showedWhen to startMCA Enterprise and CSPContract terms to ask forWhat to do nextFAQA Microsoft EA renewal reprices every line against a list that rose in 2025 and 2026. The savings sit in your counts, your SKUs and the evidence you bring, and producing them takes twelve months.
- Everything reopens. Suites, add ons, the Azure commitment, Software Assurance and the discount are priced again, and renewal is the only point quantities fall without penalty.
- A flat quote is not neutral. With list prices up, holding your old unit price is a larger discount on paper, and Microsoft will ask for a commitment in return.
- Right size E5 first. Deployed E5 seats ran 15 to 30 percent ahead of the users touching any E5 only feature in the agreements we reviewed.
- Reconcile the true up early. It was the most common surprise in our renewals, and an unreconciled count becomes the baseline for the next three years.
- Bring two documents. A market benchmark and a costed MCA Enterprise or CSP alternative were behind every large price movement in the renewals we advised.
- Start twelve months out. The baseline, benchmark and alternative each need months of elapsed time that the 90 day notice window does not contain.
What does a Microsoft EA renewal actually reopen?
It reopens every line of the agreement. An Enterprise Agreement is a three year commitment for organizations with 500 or more users or devices, and at renewal every line is priced again. The account team arrives with a target number and a story about Copilot, security and Azure growth.
- Enterprise platform SKUs. The suites every qualified user or device holds, such as Microsoft 365 E3 or E5.
- Additional products and add ons. Priced per seat or per core, from Teams Phone and Defender plans to server products.
- The Azure monetary commitment. Optional, but it drives discount and creates a spend floor you pay whether the workloads arrive or not.
- Software Assurance on the on premises licenses you still run.
- The discount attached to all of the above.
Renewal is also the only point where every quantity and SKU can go down without penalty. During the term a true up only adds, and reductions are limited to what the enrollment and Product Terms allow at an anniversary.
That makes an under counted position the cheapest mistake to avoid, and a reconciled true up the entry ticket to the conversation. Our EA renewals brief covers the count reset mechanics.
The Microsoft EA Preparation Playbook: The Work That Wins the Renewal
Why is a flat Microsoft EA renewal not a neutral outcome?
A flat renewal holds your old unit price while the list it is measured against has risen. That price is now a larger discount off the new list, and the account team will count it as a concession. Microsoft raised list pricing across several enterprise SKUs in 2025 and 2026 and tied its best discounts to Copilot and Azure commitments.
The 2025 change came through price levels. From November 1, 2025, EA and MPSA Online Services moved to one price across Levels A to D at each customer's next renewal. Larger customers lose the lower Level B, C or D price on cloud services, while on premises pricing is unchanged.
| Suite | Before | From July 1, 2026 | Change |
|---|---|---|---|
| Office 365 E3 | $23 | $26 | About 13 percent |
| Office 365 E5 | $38 | $41 | About 8 percent |
| Microsoft 365 E3 | $36 | $39 | About 8 percent |
| Microsoft 365 E5 | $57 | $60 | About 5 percent |
| Microsoft 365 F3 | $8 | $10 | 25 percent |
Existing customers keep current pricing until renewal, so the increase lands the day you sign. Say you pay $51.30 for E5, which is 10 percent off the old $57 list. Against the new $60 list, a flat offer at $51.30 shows as a 14.5 percent discount.
Your bill is unchanged, but Microsoft now books a deeper discount and will want Copilot seats or a larger Azure commitment to justify it. Treat the flat quote as the opening position. The 2026 price increase brief works through the new list prices line by line.
Microsoft EA renewal guide
The preparation checklists, SKU decisions and Copilot terms we work through on every EA renewal.
Get the white paper →Where does the recoverable money sit in an EA renewal?
Most of it sits in the base, meaning the quantities and SKUs you carry into the new term. Four items carry the savings we size at every renewal. They are small one at a time, but they stack, and because they correct the base they carry through every future true up and renewal.
| Item | Typical swing | What it changes |
|---|---|---|
| E5 right sizing | 5 to 12 percent | Removes premium seats whose users never touch a premium feature |
| Add on deduplication | 2 to 6 percent | Cuts security and voice capabilities bought twice |
| Channel benchmark | 4 to 9 percent | Resets the discount baseline against the market |
| Price protection | Caps future risk | Holds unit prices against the next list increase |
E5 right sizing, with a worked example
In the agreements we reviewed, deployed E5 seats ran 15 to 30 percent ahead of the users exercising any E5 only feature. Each of those seats pays the premium for nothing. Test for Defender for Endpoint Plan 2, Defender for Identity, Entra ID P2, Purview Insider Risk Management, Teams Phone and Power BI Pro.
| Step | Calculation | Result |
|---|---|---|
| Current E5 line per year | 4,000 x $60 x 12 | $2,880,000 |
| Users with no E5 only feature use | 20 percent of 4,000 | 800 users |
| Gap between E5 and E3 | $60 minus $39 | $21 per user per month |
| Annual saving if the 800 move to E3 | 800 x $21 x 12 | $201,600 |
| Saving over the three year term | $201,600 x 3 | $604,800 |
| Share of the E5 line | $201,600 / $2,880,000 | 7 percent |
Net out the standalone add ons a few of the 800 still need, such as a phone system license. Our E3, E5 and F3 comparison helps you place each user group.
Add on deduplication
Security and voice capabilities are often bought twice. Typical cases are E5 Security or Defender add ons on users who already hold E5, and Teams Phone bought for E5 users whose suite includes it. From July 2026, Microsoft 365 E3 and E5 also include Intune Plan 2 and Intune Remote Help, so review any standalone Intune add ons.
Channel benchmark and price protection
A discount baseline that has never been tested was set by the seller. A benchmark prices the quote line by line against comparable organizations and resets that baseline. Price protection saves nothing this year, but it limits how much of the next list increase reaches you.
What did our recent Microsoft EA renewals show?
Across 40 to 50 Enterprise Agreement renewals we advised from 2024 to 2026, the money sat where the buyer had not looked. Three patterns repeated.
- No clean license position at the opening. The buyer almost never arrived with entitlement reconciled against usage, and the unused E5 premium walked into the new term.
- The true up as a surprise. The most common one, landing 8 to 14 percent above the buyer's own internal forecast, usually in the middle of the negotiation.
- Two documents behind every large movement. First quote to signed price moved 18 to 27 percent when the buyer brought a market benchmark and a modeled channel alternative. Without them, the movement was whatever the account team had pre approved.
Buyers who mentioned alternatives without modeling them got the standard concession, close to the opening number. What shifted the deep discounts was evidence the account team could check in its own systems, because that is what changes an internal approval threshold.
The renewals that moved furthest all carried the same two documents into the room: a benchmark and a costed alternative.
Why we advise against saving the renewal for Microsoft's fiscal year end
The common advice is to wait for the weeks before June 30, when Microsoft closes its fiscal year and account teams chase quota. We disagree, because a deal compressed into those weeks has room for one item, the discount, and the discount on offer is the one already approved. Finish the evidence first, then use quarter end to close.
When should you start preparing for a Microsoft EA renewal?
Start twelve months before expiry, because the 90 day notice window is the deadline for decisions. A deployment baseline needs a usage window, a benchmark needs the requirement issued, and an alternative needs security review and finance modeling.
| Months before expiry | Work | Output |
|---|---|---|
| 12 to 9 | Build the deployment baseline: entitlement against usage per SKU | The document every later saving is priced from |
| 9 to 6 | Benchmark pricing and model MCA Enterprise and CSP with real migration timelines, whatever you intend to sign | A costed alternative the account team can verify |
| 6 to 3 | Issue the requirement, run competitive pressure, hold the discount line | Quotes that move while the alternatives are still credible |
| 3 to 0 | Close the paper: price protection, true up mechanics, term protections | Terms that survive the next list increase |
Throughout, expect Copilot and Azure commitments to be used to hold the discount. Price each on its own evidence. The dated schedule sits in our renewal runbook.
How to check your own position
- Entitlement. Microsoft 365 admin center, Billing, Your products, Volume licensing, which replaced the old VLSC portal.
- Assigned against active. Microsoft 365 admin center, Reports, Usage, Active users, plus last sign in data from Microsoft Entra.
- E5 feature use. Device onboarding in the Defender portal, Purview activity, and Teams Phone usage in the Teams admin center.
- True up history. Your past true up orders, which show how each count grew during the term and where the new agreement will start unless you reconcile it.
What happens if the agreement expires unsigned?
Corporate customers roll into the Extended Period Term by default unless they send the opt out form at least 30 days before expiry.
- Billing. Monthly, for up to one year, at the published price plus a 3 percent administrative fee.
- Quantities. No licenses can be added until you renew.
- After 12 months. The price resets to Level A, still with the 3 percent fee.
How do you make MCA Enterprise or CSP a credible alternative?
Cost it with real numbers and real timelines before month six. A modeled MCA Enterprise (MCA-E) or CSP scenario, with security review started and finance sign off, is a fact Microsoft can verify. Our EA, CSP and MCA comparison sets out the contract differences.
What the account team will say, and what to say back
| They say | You reply |
|---|---|
| "We are holding your price flat despite the July increase." | "We measure against our current unit price and reconciled counts. Quote per SKU at our baseline quantities." |
| "The best discount needs a Copilot commitment." | "Price Copilot separately. We will size it from pilot usage, with a ramp." |
| "A larger Azure commitment earns better terms." | "Our commitment follows trailing consumption plus planned migrations. More than that is a spend floor." |
| "This is already approved at the highest level." | "Our benchmark puts these lines above comparable deals. Here is the comparison by SKU." |
| "Moving to CSP will cost you more." | "We have modeled it, including migration. Here is our number and our decision date." |
How the approach changes with size
A 600 seat customer sits near the EA minimum, so a move to CSP or MCA-E is realistic within one cycle and its alternative carries the most weight. A 20,000 seat customer rarely leaves the EA outright and gains most from E5 right sizing and a line by line benchmark, where each point of discount is worth more.
What contract terms should you ask for at renewal?
Ask for the terms that keep this year's savings in place for the whole agreement. Most are settled in the final quarter, so the evidence must be finished before then.
- Every likely add on listed on the Future Pricing Table. An additional product bought later without that entry is a one time special order, and its discount does not carry to future orders.
- True up at the price sheet price. Seats added at an anniversary should cost what the renewal set.
- Reduction rights at each anniversary on subscription products the Product Terms allow, confirmed in writing.
- An Azure commitment sized to evidence, with the shortfall treatment written down.
- A Copilot ramp that starts with a measured group and adds seats against usage.
- A written definition of qualified users and devices, so accounts that never use the service do not inflate the platform count.
Common mistakes that cost the most
- Starting at the notice window. The work shrinks to a single discount conversation.
- Submitting an unreconciled true up. Leavers and duplicate accounts become the baseline for three years.
- Accepting Copilot inside the discount. It hides the real price of both the suites and the Copilot seats.
- Sizing Azure to Microsoft's forecast. The commitment becomes a floor you pay whether or not workloads move.
The errors we see most often are ranked in our renewal field notes, and the wider library sits in the Microsoft knowledge hub.
What to do next
- Twelve months out. Put the four quarters on named owners: baseline, benchmark, pressure and paper.
- Build the baseline. Entitlement against usage per SKU, including the E5 feature data that sizes the right sizing saving.
- Reconcile the true up early. Turn the likely overrun into a forecast line before the negotiation starts.
- Commission the benchmark and model one real alternative with migration timelines, whatever you plan to sign.
- Separate Copilot and Azure from the suite price and size each on its own evidence.
- Write price protection into the close and put the Extended Period Term opt out date in the calendar. Our Microsoft advisory team can run the renewal with you.
Frequently asked questions
What is a Microsoft Enterprise Agreement renewal?
It is the point where a three year volume agreement for organizations with 500 or more users or devices is priced again from the start. Suites, add ons, the optional Azure commitment, Software Assurance and the discount all reopen, so treat it as a price negotiation rather than paperwork.
When does the EA renewal clock actually start?
Twelve months before expiry. The 90 day notice window is the last date for decisions. Use months 12 to 9 for the deployment baseline, 9 to 6 for the benchmark and the MCA E and CSP models, 6 to 3 for competitive pressure, and 3 to 0 to settle price protection and true up terms.
How much does an EA renewal actually move?
In the renewals we advised, first quote to signature moved 18 to 27 percent when a benchmark and a credible channel alternative were on the table. Without them, buyers got roughly what the account team had pre approved, which tends to sit close to the opening number.
Where does the recoverable money sit in a Microsoft EA?
Mostly in the quantities and SKUs you carry forward. E5 right sizing typically recovers 5 to 12 percent, removing security and voice overlap 2 to 6 percent, and a channel benchmark resets the discount baseline by 4 to 9 percent. Price protection saves nothing up front but limits exposure to the next list increase.
Is a flat Microsoft EA renewal a good outcome?
Not by default. Microsoft raised list prices in 2025 and 2026 and links its best discounts to Copilot and Azure commitments, so your old price is now a discount off a higher list. The account team knows that and will usually want a commitment in exchange. Test the flat quote against a benchmark before accepting it.
How should you handle the true up before an EA renewal?
Reconcile it before renewal pricing starts. In our renewals the true up arrived 8 to 14 percent above the buyer's internal forecast. Remove leavers, duplicate accounts and dormant users first, because the true up count becomes the starting quantity for the new agreement.
Is walking to MCA Enterprise a credible threat?
Only once it is costed. A modeled MCA E or CSP scenario with migration dates, a security review under way and finance sign off is something Microsoft can check. A bare threat is not. Build the model in months 9 to 6 even if you expect to stay on the EA.
What happens if a Microsoft EA expires without renewal?
Corporate customers move into the Extended Period Term unless they opt out at least 30 days before expiry. Microsoft bills month to month for up to a year at the published price plus a 3 percent fee, no licenses can be added, and pricing then resets to Level A.