Contents
Key takeawaysWhat the EA is in 2026The eleven line itemsWhat we have seen in renewalsChecking your own positionA worked exampleStructural trapsAccount team lines and repliesHow size changes the decisionWhat to do nextFAQThe EA level discount no longer applies to Online Services at renewal, and Microsoft now declines smaller renewals. What you can still negotiate sits in eight line items under the single renewal number, each tested against your own usage data.
- One Online Services price at every level. From November 1, 2025, Levels A to D pay the same Online Services price at renewal, so the volume discount no longer justifies the EA by itself.
- Below 2,400 licenses, expect no renewal. Microsoft has stopped renewing commercial enrollments under that line and points those customers to CSP or MCA E.
- The renewal is eleven decisions. Price level, eligibility and uplift are fixed before you start, and the other eight can each be checked against Microsoft's own reports.
- Measure the counts before the price. Right sizing E5 against 90 days of usage returned 8 to 14 percent of Microsoft 365 spend in the renewals we advised on.
- Size the MACC to what you consumed. Use twelve months of Azure Cost Management data and keep the term to three or four years.
- Co terminate the enrollments. One end date turns several small renewals into one negotiation with every product family on the table.
- The gains add up line by line. Working all eleven lines improved EA run rate by 20 to 30 percent on average against Microsoft's first package.
How does the Microsoft Enterprise Agreement work in 2026?
The Microsoft Enterprise Agreement is a three year volume commitment for organizations with at least 500 users or devices. You commit a baseline at signing, your price level is set by license count, and growth is reconciled once a year through the true up.
The EA is a master agreement. The commercial detail sits in the enrollments beneath it, each with its own terms, price sheet and end date.
| License count | Where you land | What it means in 2026 |
|---|---|---|
| Below 500 | No EA | The route is CSP through a partner |
| 500 to 2,399 | Level A | Commercial EA renewals at this size are generally not offered |
| 2,400 to 14,999 | Levels B and C | EA available, level discount limited to on premises products |
| 15,000 and above | Level D | Largest level discount, same Online Services price as Level A |
Why the level discount no longer carries the case
The gap between Level A and Level D pricing narrowed from 22 to 25 percent in 2020 to 10 to 12 percent by 2025. Large customers were already paying close to what a mid market buyer paid per user.
- What changed. From November 1, 2025, Online Services in the EA and MPSA carry one price across Levels A to D, aligned with Microsoft.com.
- When it hits you. At your next renewal, or when you buy an Online Service not already on your Customer Price Sheet.
- What is unaffected. On premises pricing, plus the US Government and Education price lists.
Our note on the Online Services list price shift covers the impact by SKU.
Who can still renew an EA?
Microsoft stopped renewing commercial enrollments below 2,400 licenses. Microsoft has not published this as a formal rule, but account teams and resellers apply that line in renewal conversations and point those customers to CSP or the Microsoft Customer Agreement for Enterprise (MCA E).
For a large organization, the EA is now one option among three. It has to earn its place on scale, stability and the terms you write into it. The MCA explainer sets out what changes if you move.
How to Prepare for Your Microsoft EA Renewal in 2027
What are the eleven line items in an EA renewal?
An EA renewal contains eleven separate commercial decisions, even though Microsoft presents it as one total. Three are settled before you sit down. The other eight are open, and each one can be tested against your own data.
| Line item | Where the number lives | Status |
|---|---|---|
| 1. Price level | The price sheet, set by license count | Settled |
| 2. Renewal eligibility | Microsoft's 2,400 license line | Settled |
| 3. Renewal uplift | An unpublished percentage on your expiring rate | Settled |
| 4. Baseline seat count | Your volume licensing summary against real headcount | Negotiable |
| 5. Microsoft 365 SKU mix | E3, E5 and F3 populations measured against usage | Negotiable |
| 6. Billing cadence under NCE | New commerce term and billing rules | Negotiable |
| 7. Copilot cohort | The Copilot usage report | Negotiable |
| 8. Security attach | Defender, Entra, Intune and Sentinel, priced standalone | Negotiable |
| 9. Power Platform attach | Power BI and Power Platform, priced standalone | Negotiable |
| 10. Azure MACC | Trailing twelve months in Azure Cost Management | Negotiable |
| 11. The eight terms protections | Enrollment amendments outside the price sheet | Negotiable |
Microsoft prefers a single number because it can only be accepted or rejected, and rejecting it means rejecting the whole renewal. Split into eleven lines, each figure has to stand on its own evidence.
Fix the seat counts first, then negotiate price on the smaller, correct base.
How the settled lines still shape the deal
You cannot negotiate the price level or your eligibility, but you can plan around them. If you sit near 2,400 licenses, model the CSP and MCA E alternatives before Microsoft raises them. Ask for the uplift in writing as a percentage on your expiring rate.
Compare that uplift with the July 1, 2026 list increases: Microsoft 365 E3 went from $36 to $39 and E5 from $57 to $60 per user per month. Existing customers keep current pricing until renewal, so that is where the increase lands. There is limited flexibility against the reset itself, which pushes the recoverable value into the eight open lines.
Microsoft EA Renewal Guide
The full renewal method from our Microsoft practice, with the checks for every line item.
Get the white paper →What have we seen in recent Microsoft EA renewals?
Across roughly 60 to 80 EA renewals our Microsoft practice advised on between January 2024 and December 2025, the savings sat in the gap between Microsoft's forecasts and the buyer's own measurements. Three measurements show how wide that gap ran.
- The first discount offer was not the ceiling. Final discounts landed 6 to 9 percentage points above the number the account team first called achievable.
- E5 was sized to the deployment plan. Measuring the E5 population against 90 days of actual usage returned 8 to 14 percent of the Microsoft 365 spend.
- MACC proposals ran ahead of consumption. Commitments sized on Microsoft's forward forecast ran 22 to 38 percent above trailing twelve month Azure consumption.
Working all eleven lines produced an average EA run rate improvement of 20 to 30 percent against Microsoft's first renewal package. That came from eight lines corrected at the same time, each argued on its own data.
Why the headline discount is the wrong place to spend your effort
The usual advice is to push hard on the discount percentage and treat the rest as detail. We disagree. In our renewals the discount added single digit points, while the counts underneath it, the E5 population, the Copilot cohort and the MACC, carried gaps as large or larger.
A discount applied to an unused E5 seat or an idle Copilot seat still leaves you paying for that seat for three years. Correct the counts before the price conversation starts. The five overspend categories a renewal resets are in our Microsoft overspending report.
How do you check your own position before the renewal?
Every open line has a report behind it, and the data comes from Microsoft's own consoles. Pull these three to six months before the end date.
Baseline seat count
The Volume Licensing Service Center (VLSC) relationship summary was retired in April 2024. The same data now sits in the Microsoft 365 admin center under Billing, Your products, Volume licensing. Reconcile it against HR headcount and against Entra ID accounts with no recent sign in. Most renewals never check this line.
E5 population and security attach
Measure 90 days of usage for each E5 user across the workloads that separate E5 from E3: Defender for Endpoint Plan 2, Purview compliance features, Entra ID P2, Teams Phone and Power BI Pro. Users with no activity in any of them are candidates for E3.
Where only a group needs the security stack, price Defender, Entra or Intune add ons for that group against the full E5 step. The E5 shelfware guide shows how to build the list.
Copilot cohort and Azure consumption
The Microsoft 365 admin center has a Copilot usage report under Reports, Usage, with 7, 28, 90 and 180 day views and each user's last activity by app. Size the cohort on weekly active users from that report.
For Azure, export twelve months of actual spend from Cost analysis and separate steady workloads from one time migrations. The MACC sizing guide covers the adjustments.
What does splitting an EA renewal look like in numbers?
Take a hypothetical company with 5,000 users, all proposed on Microsoft 365 E5, plus 2,000 Copilot seats. Prices are list after July 1, 2026: E5 at $60, E3 at $39 and Copilot at $30 per user per month. Usage data shows 300 licensed leavers, 1,200 E5 users with no E5 activity in 90 days, and 600 weekly Copilot users.
| Line | First package | After measurement | Annual difference |
|---|---|---|---|
| Baseline | 5,000 E5 users | 4,700 users | $216,000 |
| SKU mix | 4,700 on E5 | 3,500 on E5, 1,200 on E3 | $302,400 |
| Copilot cohort | 2,000 seats | 600 seats | $504,000 |
| Total | $4,320,000 | $3,297,600 | $1,022,400 |
The first package is $3,600,000 for E5 plus $720,000 for Copilot. The measured version is $2,520,000 for E5, $561,600 for E3 and $216,000 for Copilot. That is about 24 percent lower before any discount is discussed.
The MACC works the same way. If Microsoft proposes $2,000,000 a year and your trailing twelve months show $1,500,000, the proposal is a third above actual use. Committing at trailing consumption over three years removes $1,500,000 of commitment you might never use, and you can still raise the figure at the next renewal if growth arrives.
What are the structural traps in a 2026 EA renewal?
Five features of the current EA shift cost and risk to the buyer in ways the price sheet does not show. Each has a counter you can write into the renewal.
- The NCE conversion. The per user pricing flexibility historically built into the EA is removed unless you negotiate it back into the contract. New commerce license subscriptions can only be reduced within seven days of purchase, so this term is worth more than most percentage points.
- The true up ratchet. Seats added mid term cannot come off until the anniversary, and the enterprise baseline resets only at renewal.
- The Copilot bundle. Microsoft pushes broad coverage. Size the cohort to the usage report and keep an option to add seats later.
- The MACC horizon. A three or four year term gives you a resizing point at each renewal. Six and seven year terms give that up for the duration.
- The enrollment calendar. Enrollments expiring on different dates become a rolling series of small negotiations, each too small to contest.
Why co terminating your enrollments changes the negotiation
When the Microsoft 365, server and Azure enrollments end on different dates, each renewal looks too small to fight. Co terminate them and you get one date and one number, with every product family on the table at once.
Microsoft's fiscal year ends June 30, so a May or June end date adds year end pressure on the account team. See our note on the June 30 fiscal year.
What will the Microsoft account team say, and how should you answer?
Expect the account team to defend the single number with a small set of familiar lines. Answer each one with data from your own tenant and a written request.
- "This is the best discount we can get approved." Ask for the price sheet by SKU and respond line by line. In our renewals the first figure called achievable was not the final one.
- "This pricing is only available if you sign before June 30." Ask for the offer to be held in writing past that date, and keep to the timeline you set for your own data work.
- "Copilot delivers value only with broad coverage." Reply with the usage report cohort, and ask for the same unit price on seats added during the term.
- "The MACC reflects your growth plan." Reply with the Cost Management export and offer a commitment at trailing consumption on a three year term.
- "Your enrollment is not eligible for renewal." Ask for that in writing, with MCA E and CSP pricing side by side. The EA against CSP program comparison shows where the crossover sits.
Contract terms to ask for in the enrollment
- Price hold on added SKUs. Products added mid term, such as a Copilot or E5 step, carry the renewal discount instead of list.
- Reduction rights at the anniversary. Written rights to reduce Online Services, including Copilot, replace the flexibility NCE removes.
- A cap on the next renewal uplift. A stated maximum on your expiring rate. Our uplift cap clause note has sample wording.
- MACC shortfall treatment. The right to extend the term or roll unused commitment forward before a shortfall is invoiced.
- Co termination. All enrollments aligned to one end date, with prorated pricing for the alignment period.
- Transition terms. If Microsoft will not renew, a notice period and negotiated pricing carried into the replacement agreement.
How does the EA decision change with company size?
Seat count, headcount stability and Copilot plans decide the vehicle. The crossover between EA and CSP sits around 3,000 to 6,000 knowledge worker seats.
- Below 2,400 licenses. Expect CSP or MCA E, and put the effort into the SKU mix and partner terms.
- Near the crossover. Price both routes. The EA suits stable headcount and three years of price certainty. CSP suits a workforce that shrinks or shifts.
- 15,000 seats and above. Level D still helps on premises products, but Online Services price as Level A. Co termination, the MACC and the terms protections carry most of the value.
For the full sequence, see our EA negotiation strategies. For Copilot meters and add ons, see the Copilot licensing guide.
What to do next
- 12 months out. List every enrollment and its end date, and decide whether to co terminate them.
- 9 months out. Split the renewal into the eleven lines and give each open line an owner and a data source.
- 6 months out. Reconcile the baseline against headcount and measure the E5 population against 90 days of usage.
- 5 months out. Size the Copilot cohort from the usage report and the MACC from twelve months of Cost Management data.
- 3 months out. Price the CSP and MCA E alternatives, then send Microsoft your counts and the contract terms you require.
- 1 month out. Negotiate price on the corrected base and sign nothing with an untested line. Our Microsoft practice can run the renewal with you.
Frequently asked questions
What is the Microsoft Enterprise Agreement in 2026?
It is a three year agreement for organizations with 500 or more users or devices. You commit a baseline, pay the prices on your Customer Price Sheet for the term, and report growth each year at true up. Level A covers 500 to 2,399 licenses and Level D starts at 15,000. For most buyers it now competes with CSP and MCA E instead of being the automatic choice.
How much have Microsoft EA discounts fallen?
The gap between Level A and Level D fell from 22 to 25 percent in 2020 to 10 to 12 percent by 2025. For Online Services it drops to zero at your first renewal after November 1, 2025. On premises products keep level pricing. Savings now come from correcting counts and negotiating terms.
What are the eleven EA line items?
Price level, renewal eligibility, renewal uplift, baseline seat count, the Microsoft 365 SKU mix, billing cadence under NCE, the Copilot cohort, security attach, Power Platform attach, the Azure MACC and the eight terms protections. Microsoft fixes the first three. Each of the other eight should arrive at the table with its own supporting report.
How should an Azure MACC be sized?
Start from trailing twelve month consumption in Azure Cost Management, then adjust for workloads you know are ending or starting. Proposals built on Microsoft's forecast ran 22 to 38 percent above trailing use in our renewals. A three or four year term gives you a resizing point at each renewal, while six and seven year terms lock the size in for the duration.
How does the Microsoft EA true up work?
Once a year you report the licenses added since the last order and pay for them in a single true up order, usually due before the enrollment anniversary. Seats that surface later in an audit are settled on Microsoft's terms, so run the count yourself each quarter. Because the baseline only resets at renewal, the count you sign at matters more than the discount.
Is the Microsoft EA still worth it?
Often yes for large organizations with stable headcount and high Copilot attach, provided it is a deliberate choice. The program discount has shrunk and smaller enrollments are excluded. The crossover against CSP sits around 3,000 to 6,000 knowledge worker seats, so price both routes before you commit to another three years.
What happens if Microsoft will not renew my Enterprise Agreement?
You buy through CSP from a partner or through MCA E directly with Microsoft. Get the decision in writing and price both routes. Under new commerce rules, license subscriptions can be reduced only within seven days of purchase, so size seat counts carefully before the first order and negotiate a notice period with pricing carried into the new agreement.