Microsoft EA Renewal

Microsoft Enterprise Agreement Renewal – 4 Steps

Microsoft Enterprise Agreement Renewal – 4 Steps

Microsoft Enterprise Agreement – How to Renew

Enterprise Agreements (EAs) are Microsoft’s flagship licensing contracts for large organizations, typically those with 500 or more users or devices​.

Renewing an EA is a significant event that can lock in your IT costs and capabilities for the next three years.

It’s not just a paperwork exercise—it’s effectively negotiating a new agreement​. Proper preparation and strategy are critical to avoid overspending or getting locked into unfavorable terms.

Below, we outline the EA renewal process in four key steps: preparation, usage analysis, negotiation, and execution.

We also discuss common pitfalls to avoid and tactics to get the best outcome.

Read Renewing EA vs. Switching to CSP: Deciding Your Microsoft Licensing Path.

Step 1: Preparation

Start early and get organized.

You should kick off your renewal planning 8–12 months in advance. An EA renewal isn’t something to tackle at the last minute.

Waiting until the last minute to renew is now considered a mistake – Microsoft has changed incentives to encourage earlier renewals​.

Coordinating the effort will begin by assembling a cross-functional team, including IT, procurement, finance, and SAM/licensing specialists.

Gather your current state information:

Inventory all your Microsoft products and services under the current EA. Document quantities, editions (e.g., Office 365 E3 vs E5), and any special provisions or discounts in your existing contract.

Understand your license entitlement versus actual deployment – this will feed into usage analysis. Also, review the contract clauses (pricing protections, True-up terms, renewal options, etc.) and any hidden costs or restrictive terms that might carry over​.

Assess business needs and roadmap:

Work with business units to forecast changes over the next EA term. Are you planning a major cloud migration? New offices or acquisitions that will add to the user base? Are there any projects that might reduce the user count or switch to alternative solutions? Align the renewal with your future needs, not just the status quo.

For example, if you plan to adopt more cloud services, you may need flexible terms to add or remove subscriptions. If you are certain that certain on-premises systems will be retired, you might be able to negotiate to drop those licenses.

Knowing Microsoft’s product roadmap can also inform your strategy – for example, if a new product version or bundle is coming, you might want to include it.

Set goals and budget:

Determine what a successful renewal looks like for your organization. This could result in cost savings (or at least cost avoidance against price hikes), obtaining additional products within budget, or securing more favorable terms.

Establish an internal negotiation mandate, such as “we need to cap annual cost increase at X%” or “we must include security add-ons without exceeding current spend.”

Also, decide on a BATNA (best alternative to a negotiated agreement); what will you do if the EA renewal offer is unacceptable?

Large enterprises sometimes consider switching to a Microsoft Products and Services Agreement or a Cloud Solution Provider (CSP) subscription as alternatives. Having an internal fallback plan strengthens your negotiating position.

Read Microsoft EA Renewal Timeline and Checklist for CIOs.

Common Pitfalls in Preparation:

  • Starting too late: Rushing often means you’ll accept whatever Microsoft offers. Microsoft now encourages earlier renewals, so leverage that by preparing early, not delaying​.
  • Relying solely on Microsoft or your reseller: Don’t depend on Microsoft’s account rep or Licensing Solution Partner (LSP) to tell you what you need. They are motivated to encourage you to spend more. It’s fine to hear their suggestions but validate everything against your data and plans. Consider consulting an independent licensing advisor if you need unbiased input.
  • No clear strategy: Entering without defined objectives and understanding your requirements is a recipe for a suboptimal deal. Microsoft negotiators are well-prepared; you should be, too.

Read Top 20 Trends in Microsoft EA Renewals.

Step 2: Usage Analysis

With your groundwork laid, the next step is to perform a deep usage and needs analysis. This is about aligning what you’re paying for with what you use.

Audit your current usage:

Examine how your licenses are being consumed. For each major product (Windows, Office 365, EMS, Azure services, etc.), determine the number of active users or installations versus the quantities purchased.

Identify any “shelfware” – licenses purchased but not being used. It’s common to find applications or features enabled under the EA that haven’t been adopted widely.

For example, you might be paying for 500 Visio licenses, but only 50 people actively use Visio. These are potential cuts or downgrade targets in the renewal.

Analyze usage patterns:

Examine trends over the last 1–2 years. Are certain product usages declining or growing?

If your Office 365 usage shows that 60% of users are on E5 plans but only half of those users use the E5-only features, that indicates an overspend that can be corrected by downgrading some users to E3.

Usage data and analytics can spotlight such opportunities​. Also, check if you are compliant with current entitlements – any compliance gaps should be addressed now (via true-up or removal) rather than being discovered by Microsoft later, possibly during an audit.

Align licenses with actual needs:

This is essentially right-sizing your EA. Decide what you need for each product or service for the next term.

Perhaps you deployed Skype for Business Server licenses under the EA but have since transitioned to Teams online; those Skype licenses can be removed.

Perhaps you have redundant capabilities, such as paying for a third-party security solution when E5 includes similar functionality. You might consider removing or using the overlap as a negotiation point to secure a better price.

Look for downgrades (E5 to E3 or E3 to E1/Business plans) where specific user groups do not require high-end features. Also, consider whether new needs have emerged—for instance, if you plan to implement Power BI widely, you may need to include it in the EA (or budget for it separately).

Forecast and rationalize:

Project your needs at least for year 1 of the new EA and roughly for years 2–3. Microsoft will charge annually based on your initially contracted quantities plus any True-ups.

If you expect to reduce headcount or shift some workloads to non-Microsoft solutions, don’t commit to those licenses upfront.

Conversely, if growth is expected, you will account for growth now or through the True-up process each year. The goal is to avoid over-commitment. Microsoft sales might push you to maintain or increase quantities “just in case.”

Resist this without data justification. It’s better to start slightly lower and add via True-up if needed, rather than being stuck with paying for unused licenses because you overestimated.

Identify flexibility requirements:

If your environment is uncertain, you may need to be flexible. For example, suppose you’re considering moving some users to a CSP model or mixing cloud subscriptions.

In that case, you might want the EA to allow reducing certain components in the later years or swapping licenses (Microsoft EAs generally don’t easily reduce counts, but sometimes you can negotiate swap rights for equivalent products). Make a list of any such needs to be brought up in negotiations.

Read Maximizing Cost Savings in Your Microsoft EA Renewal.

Common Pitfalls in Usage Analysis:

  • Carrying over shelfware: Renewing an EA as is without weeding out unused licenses is a major source of overspending. Always trim the fat—you don’t want to pay for something you won’t use for another three years.
  • Not considering future changes: Focusing only on current usage and ignoring upcoming changes (such as cloud migrations, downsizing, or upgrades) can lead to misalignment. Your license mix should reflect where you’re going, not just where you are.
  • Ignoring compliance issues: If your self-audit finds you use more than you’re licensed for, don’t sweep it under the rug. Address it proactively through purchases or adjustments. If you ignore it and renew, you could face a compliance audit later with hefty penalties. Use the renewal as an opportunity to “reset” and start the new term fresh.
  • Lack of data analysis: A gut feeling isn’t enough. Utilize detailed reports from Microsoft admin portals or SAM tools. A data-driven approach provides leverage – for instance, proving that 30% of your users didn’t use their Office ProPlus apps might justify a concession or different licensing approach.

Step 3: Negotiation

Now is the moment to engage with Microsoft (and/or your reseller) to finalize the renewal deal.

Think of the renewal as an opportunity to renegotiate from scratch – pricing, discounts, product selection, and terms are all up for negotiation.

Remember that Microsoft’s initial quote often leaves room for negotiation, especially for large enterprises.

Leverage your preparation:

Go into discussions armed with the insights from steps 1 and 2. Present a clear picture of what you need (and what you don’t need). For example, if you know you can drop 200 E5 licenses, communicate that intent.

This lowers the baseline, so Microsoft can’t start from your old quantity and add growth assumptions.

Also, use your data to push back on upsells – if Microsoft proposes adding Product X, you can say, “Our analysis shows that only 10% would use it, so it’s not worth full deployment.” You will likely get a more reasonable offer when Microsoft sees you have done your homework.

Discussing pricing and discounts:

Microsoft EAs have volume pricing levels, but large deals often involve special discounts. Always negotiate a discount percentage off the list prices for your bundle.

If possible, benchmark the discount against similar organizations—Microsoft’s “best offer” isn’t always the best in the market​. If you feel it’s weak, provide counter-evidence (e.g., “Our analysis shows companies of our size get ~X% off—we expect the same”).

Also, don’t focus solely on unit price; consider the total cost over 3 years.

Sometimes, Microsoft may offer a larger Year 1 discount, but with an increase in years 2 and 3. Calculate the 3-year total to evaluate it properly.

Negotiate beyond just price:

Remember to negotiate terms and value-added components, not just license counts and costs. For instance, you can negotiate for:

  • Training or consulting credits: Microsoft sometimes offers official training vouchers or consulting days, which add value at a low cost.
  • Support benefits: Ensure you’re getting the necessary support. If you rely on Premier (Unified) support, consider negotiating a support discount or including it in the deal.
  • Flexibility clauses: Try to include terms for flexibility, such as the ability to substitute products (e.g., swapping some on-premises licenses for cloud services later) or adjust quantities mid-term if certain thresholds are met. Microsoft might not always agree, but it’s worth asking if you foresee significant change.
  • Price protection: EAs typically lock in pricing for three years on the initial purchase. If you anticipate adding more licenses through True-ups, negotiate caps or specific discounts for those future additions so you don’t pay higher rates later.
  • Billing and payment terms: Large EAs typically allow annual payments. You can negotiate the payment timing if it helps with cash flow, such as aligning payments with your fiscal year.

Use timing to your advantage:

Like many vendors, Microsoft has quarterly and annual sales targets. Historically, aligning your negotiation with Microsoft’s fiscal year-end (June 30) could yield extra incentives.

However, as noted, waiting until the last minute (end of June) isn’t as effective as it was​ because Microsoft has adjusted to avoid a quarter-end crunch.

Instead, aim to have serious negotiations in Q3 of Microsoft’s fiscal year (around April–May) when they are eager to secure deals, but don’t wait so long that you run out of time to resolve issues.

Microsoft may offer “early renewal” discounts if you sign a bit before the deadline—consider whether those are worthwhile. Always leave yourself enough runway to escalate or walk away if needed.

Be prepared to challenge and say no:

Microsoft often proposes additions, such as “upgrading all users to E5 for security benefits” or “adding Azure consumption commitments to get a better discount.”

Weigh these carefully. If an upsell doesn’t align with your plan, saying no firmly is okay. Use “we don’t need that” backed by your usage analysis. If they insist it’s part of a bundle, push for an opt-out or a compensating discount.

Also, be aware of any new contractual terms that may be added. For example, Microsoft might update its legal terms or introduce new clauses related to cloud services.

Review the documentation line by line (or have your legal team do so) to identify any unfavorable terms and negotiate them out if possible – don’t assume the contract is a non-negotiable boilerplate.

Escalate if necessary:

If you’re a sizable client and the negotiation isn’t meeting your needs, involve higher-level management on both sides.

Sometimes, bringing in your CIO or CFO to speak with Microsoft’s sales director or even a Microsoft executive can break a stalemate, especially if you’re far apart on costs.

Highlight the long-term partnership – Microsoft wants to keep your business, so make them work to earn the renewal.

You can also subtly indicate that you have alternatives (even if switching away from EA is challenging); Microsoft is aware that some customers allocate parts of their spending to AWS, Google, or other software.

A well-placed hint that you’re evaluating all your options can help you get a better deal.

Common Pitfalls in Negotiation:

  • Overlooking hidden costs and terms: Ensure no “gotchas” are in the fine print. For example, check if new licenses require Software Assurance and what that costs or if any promotional pricing expires mid-term. Carefully review the agreement to identify any unfavorable terms or additional fees before signing.
  • Focusing only on price: As noted, don’t ignore value-added elements. Failing to negotiate aspects such as training, support, and flexibility is a missed opportunity. Sometimes, a slightly higher price is acceptable if the agreement is more favorable in other ways.
  • Underestimating flexibility: If you negotiate a rock-bottom price but the contract is inflexible (you cannot reduce licenses, swap rights, etc.), you may end up paying more later when your needs change. Ensure the EA has some built-in adaptability to the extent that Microsoft allows​.
  • Assuming Microsoft will optimize for you: Microsoft’s licensing specialists and partners won’t necessarily point out cheaper options; they often steer toward higher-cost bundles. It’s up to you to propose the optimized structure (e.g., a mix of licenses) that lowers your spend.
  • Not getting it in writing: If any concessions or special terms are agreed upon verbally or via email, ensure they are included in the final contract paperwork or an addendum. Later, only what’s in the signed contract counts.

Read CIO Playbook: Navigating Microsoft EA Renewals vs. MCA-E in 2025

Step 4: Execution

After negotiation, you’ll reach an agreement in principle. Now it’s about executing the renewal correctly so that what you negotiated is what you get and setting yourself up for successful management during the EA term.

Finalize the paperwork:

Double-check that the final EA documents accurately reflect all negotiated items, including the correct product list, quantities, prices, discounts, and special terms.

It’s not uncommon for mistakes or omissions to occur in contract drafts, especially if there are many changes.

Scrutinize the Price Sheet/Bill of Materials and the EA terms. If you negotiated a special condition (e.g., the right to reduce a certain product in year 2), ensure it’s written in.

Have your legal and procurement teams review as well.

Coordinate with your LSP/Reseller:

In many regions, EAs are transacted via a Licensing Solution Provider partner. Work closely with them to place orders by the new agreement.

They can also double-check that the licensing portals (e.g., Microsoft Volume Licensing Center or Microsoft 365 admin) reflect the new entitlements after renewal.

Timing is important—you want continuous coverage. Typically, the new EA starts the day after the old one expires to ensure continuity.

Communicate changes internally:

If the renewal involves changes (for example, dropping a product or adding a new service), inform the relevant IT teams and end-users as needed.

For instance, if you decide to remove Visio licenses for certain users due to low usage, those users must be notified that they will no longer have access unless a business case is made.

Or, if you’ve added Power BI for everyone, your BI team should start planning the rollout. Early communication prevents surprises and maximizes the value of what you purchase.

Implement license optimizations:

Execution isn’t just signing the contract – it’s also operationalizing your decisions. If you reduce 100 licenses, ensure they’re reclaimed in the portals so you’re not accidentally still assigning them.

If you negotiated to swap some on-prem licenses for cloud ones, initiate that transition project. Essentially, align your IT asset configuration with the new contract entitlements as soon as possible.

Plan for True-ups and monitoring:

The EA renewal might be done, but license management continues.

Set up a process to track any growth or changes that require a True-up (the annual reconciliation where you report any increases in usage). It’s wise to do internal true-up checks quarterly so you’re not caught off guard at year-end.

Additionally, cloud service consumption should be closely monitored, especially if Azure or other services are included in the EA. Azure is often pay-as-you-go, even in EA, but if you have negotiated any Azure commitments, track them against those.

By staying on top of this, your next annual True-up (and eventual next renewal) will be far smoother.

Prepare for the next cycle:

It may sound premature, but best-in-class organizations treat EA management as continuous. Microsoft will start working on your next renewal after this one is signed (they call it “T minus 36” – a three-year countdown).

That means you should also maintain a strategic view. Document lessons from this renewal, what worked and what didn’t, and maintain a file of negotiation points for next time. Keep that cross-functional team engaged, at least to some extent, throughout the term.

Consider meeting annually to review license usage and strategy. You’ll be in great shape by the time the next renewal approaches.

Avoiding Post-Renewal Pitfalls:

  • “Set and forget” syndrome: One mistake is treating an EA renewal as a one-time deal. In reality, you need to actively manage the EA throughout its life. Continue optimizing usage to avoid paying for unnecessary licenses during the True-up. Keep an eye on Microsoft’s product changes – new offerings might emerge that you want to swap into your agreement later.
  • Compliance complacency: Just because you’ve renewed, it doesn’t mean Microsoft won’t audit you. Many customers get audited between renewals​. Use the EA period to conduct internal audits and stay compliant, so that an external audit (if it occurs) finds no issues.
  • Underutilizing benefits: An EA comes with Software Assurance benefits, including training days, support incidents, and upgrade rights. Take advantage of them—they are part of the value you negotiated. Assign an owner to ensure your organization utilizes SA benefits (such as Planning Services or Azure credits), improving the EA’s ROI.

Read our Case study – Microsoft EA Renewal for an IT Professional Services Company in Chicago.

Recommendations

  • Begin planning 12 months before the EA expiration. Early preparation gives you time to gather data and avoid rushing. If there’s less time left, start now – the sooner the better.
  • Perform a thorough self-assessment of your current licenses and usage. Use that data to determine your needs and identify any waste or shortfall.
  • Right-size your renewal: Don’t automatically renew all components. Eliminate shelfware and align license levels (e.g., E3 vs. E5) with user needs. This ensures you pay only for what provides value.
  • Negotiate assertively with Microsoft. Everything from price to terms is negotiable. Push for market-competitive discounts, and don’t hesitate to request flexible terms (swap rights, etc.) that support your business’s plans. Also, read the fine print to avoid hidden costs​.
  • Time your deal smartly. To get the best concessions, aim to conclude negotiations when Microsoft is most flexible (often before fiscal year-end, but not at the last-second crunch). Avoid an eleventh-hour renewal scramble at all costs​.
  • Don’t rely solely on Microsoft’s guidance. Use your analysis or third-party experts. Remember that the reseller or Microsoft rep may steer you toward higher-spend options—always validate recommendations against your independent strategy.
  • Document and execute carefully. Ensure the signed agreement aligns with the promises made. Then, immediately align your deployments with the new contract (remove unused licenses, add new ones, etc.), so you can derive the planned savings and benefits.
  • Manage the EA proactively. Treat software asset management as an ongoing process. Track changes, stay compliant, and engage stakeholders periodically throughout the 3-year term. This will set you up for a smoother renewal next time.

Following these steps and recommendations, you can turn your Microsoft EA renewal into an opportunity to optimize costs and align IT investments with business needs, rather than a dreaded true-up bill.

With preparation and savvy negotiation, your EA renewal will deliver value and predictability on your terms.

Read Steps Involved in Renewing a Microsoft Enterprise Agreement (EA).

FAQs

What is a Microsoft enterprise agreement?

An enterprise agreement (EA) is a volume licensing program offered by Microsoft to organizations with more than 250 PCs. The agreement allows organizations to purchase licenses for Microsoft products at a discounted rate and to spread payments over three years.

What products are included in a Microsoft enterprise agreement?

Enterprise agreements typically include licenses for Microsoft Windows, Office, and other core products such as Exchange, SharePoint, and Dynamics. Organizations can also purchase licenses for other Microsoft products such as Azure, Visual Studio, and Power.

What are the benefits of a Microsoft enterprise agreement?

The benefits of an EA include discounted pricing, the ability to spread payments over three years, and the ability to have a single agreement for all of an organization’s Microsoft products. Additionally, EAs include Software Assurance, which provides organizations with access to new product releases and the latest version of products, as well as support and training.

How often can an enterprise agreement be renewed?

Enterprise agreements can be renewed every three years.

Can an enterprise agreement be purchased if an organization has less than 250 PCs?

No, enterprise agreements are only available to organizations with 250 or more PCs. However, organizations with fewer than 250 PCs can still purchase Microsoft products through other licensing programs, such as the Open Value or Open License programs.

How do I renew my Microsoft enterprise agreement?

To renew your enterprise agreement, you must work with your Microsoft account representative to create a new agreement. This process typically involves reviewing your current usage and discussing any changes to your organization’s needs.

What happens if I don't renew my enterprise agreement on time?

If you don’t renew your enterprise agreement on time, you’ll lose access to the agreement’s benefits, such as discounted pricing, Software Assurance, and support. You’ll also need to purchase new licenses for any Microsoft products you continue to use.

Can I make changes to my enterprise agreement during the renewal process?

Yes, you can change your enterprise agreement during the renewal process. This might include changes to the products included in the agreement, the number of licenses, or the terms of the agreement.

How long time does it take to renew an enterprise agreement?

The time it takes to renew an enterprise agreement can vary depending on the complexity of your organization’s needs and the size of the agreement. Typically, the process can take several weeks or even months to complete. It’s important to start the renewal process well before the agreement expires to ensure enough time to complete it.

What factors are taken into consideration during enterprise agreement negotiations?

During enterprise agreement negotiations, factors such as the organization’s current and future product needs, the number of licenses required, and its budget are considered. Additionally, the organization’s current usage and compliance status will be reviewed to ensure that the agreement aligns with its actual usage.

Can I negotiate for a lower price during an enterprise agreement negotiation?

Yes, organizations can negotiate for a lower price during enterprise agreement negotiations. However, the final price will depend on various factors, such as the organization’s size, the products included in the agreement, and the terms of the agreement.

Are there any product limitations that can be included in an enterprise agreement?

While an enterprise agreement can include a wide range of Microsoft products, some limitations may depend on the organization’s needs and budget. It’s best to discuss this with the Microsoft representative to reach an agreement that suits the organization’s needs.

Read about our Microsoft EA Negotiation Service.

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  • Fredrik Filipsson has 20 years of experience in Oracle license management, including nine years working at Oracle and 11 years as a consultant, assisting major global clients with complex Oracle licensing issues. Before his work in Oracle licensing, he gained valuable expertise in IBM, SAP, and Salesforce licensing through his time at IBM. In addition, Fredrik has played a leading role in AI initiatives and is a successful entrepreneur, co-founding Redress Compliance and several other companies.

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