Introduction to Microsoft Enterprise Agreement vs MPSA
- Microsoft Enterprise Agreement (EA):
- Designed for large organizations (250+ users/devices).
- Offers volume licensing with customizable options.
- Includes Software Assurance benefits.
- 3-year agreement term.
- Microsoft Products and Services Agreement (MPSA):
- Suitable for medium to large organizations.
- Flexible purchasing program without the need for a long-term contract.
- Consolidates purchase of Microsoft services and software.
- No minimum purchase requirements.
Microsoft Enterprise Agreement vs Microsoft Products and Services Agreement (MPSA)
Choosing the right licensing agreement for your organization is critical, especially given Microsoft’s broad product portfolio.
The Microsoft Enterprise Agreement (EA) and the Microsoft Products and Services Agreement (MPSA) are popular licensing options. Both offer specific benefits tailored to different organizational needs.
Understanding their differences and the benefits they offer is crucial for ensuring that your licensing strategy aligns with your organization’s size, budget, and long-term goals.
This article breaks down both licensing models, offering a side-by-side comparison to help you make an informed choice.
What is Microsoft Enterprise Agreement (EA)?
Microsoft Enterprise Agreement (EA) is a volume licensing option designed for large organizations with 500 or more users or devices. It requires a three-year commitment to Microsoft products and services, but licenses can be adjusted annually based on changing requirements.
Key Features of Microsoft EA:
- Three-Year Agreement: EA agreements are structured for three years, providing predictable costs for budgeting.
- Volume Discounts: Because EA targets larger organizations, it offers significant volume discounts, making it cost-effective for companies with many users.
- Flexibility for Growth: EA allows licenses to be added during an annual true-up, so organizations can easily add licenses as they grow.
- Software Assurance (SA) is included by default with EAs. It offers access to product upgrades, training, and support.
- Centralized Billing: Offers simplified billing and easier license management, as all licenses are managed under a single agreement.
What is the Microsoft Products and Services Agreement (MPSA)?
Microsoft Products and Services Agreement (MPSA) is a flexible licensing agreement designed for organizations that need more agility and don’t require a commitment for a specific period.
MPSA is often suited for mid-sized organizations that prefer to license products without long-term obligations.
Key Features of MPSA:
- No Minimum Purchase Requirement: Unlike EA, MPSA does not have a minimum user/device threshold, making it suitable for smaller to mid-sized companies.
- Pay-As-You-Go: Instead of a three-year commitment, organizations can purchase licenses as needed, with no obligation to maintain a particular quantity.
- Single Agreement for Multiple Types of Licenses: MPSA enables the purchase of software, online services, and Software Assurance all in one agreement, which offers better control over different product lines.
- No Fixed Term: MPSA does not require a fixed duration, which provides flexibility for companies that may not want to be tied into a multi-year contract.
Comparison of Microsoft EA and MPSA
To better understand how Microsoft EA and MPSA stack up against each other, here’s a comparison of their key features:
| Feature | Microsoft EA | Microsoft MPSA |
|---|---|---|
| Commitment Length | 3 years | No fixed term |
| Minimum Users/Devices | 500+ | No minimum |
| Pricing | Volume Discounts | Pay-As-You-Go |
| Flexibility | Annual true-up for growth | Flexible purchases as needed |
| Software Assurance | Included by default | Optional |
| Ideal Customer Size | Large enterprises (500+ users) | Mid-sized or smaller organizations |
| Centralized Billing | Yes | Yes |
| Cloud Integration | Strong focus on Microsoft 365 and Azure | More flexibility, no mandatory cloud focus |
When to Choose Microsoft EA
Microsoft Enterprise Agreement is ideal for large enterprises requiring a standardized licensing approach, predictable costs, and volume discounts.
Advantages of Choosing EA
- Volume Pricing: EA offers the best pricing for large-scale deployments due to volume discounts. You can save considerably if your organization has over 500 users or devices.
- Annual True-Up: With EA, you can adjust your license count annually to account for growth, ensuring compliance without re-negotiating the entire agreement each time.
- Software Assurance Benefits: The inclusion of Software Assurance provides value-added services like 24/7 support, training, planning services, and version upgrades, which can be particularly useful for organizations needing to keep their software stack current.
- Centralized Management: EA centralizes software procurement, simplifying the process of managing licenses. IT departments don’t need to juggle multiple agreements, as everything is handled under a single contract.
Examples of Organizations Benefiting from EA
- Manufacturing Companies: With a workforce that could include thousands of employees, EAs are suitable for managing licenses across multiple locations.
- Global Enterprises: Companies with global offices benefit from centralized billing and unified license management, reducing administrative overhead.
When to Choose Microsoft MPSA
Microsoft Products and Services Agreement is better suited for organizations that need flexibility without long-term commitment and have fluctuating licensing needs.
Advantages of Choosing MPSA
- No Long-Term Commitment: Unlike EA, MPSA doesn’t require a three-year commitment, making it a good choice for companies with variable software needs.
- Scalable as Needed: With MPSA, organizations can add or reduce licenses without waiting for annual reviews. This can be ideal for businesses with seasonal workers or those experiencing rapid growth or downsizing.
- One Agreement for All Needs: MPSA combines the ability to purchase on-premises software, online services, and Software Assurance in a single agreement, providing simplicity and flexibility.
Examples of Organizations Benefiting from MPSA
- Growing Startups: MPSA can be used by startups scaling quickly but unsure of their long-term requirements because of its flexibility and lack of commitment.
- Mid-Sized Companies: MPSA’s pay-as-you-go nature will appeal to companies that may frequently need to adapt their software needs.
Cost Considerations: EA vs MPSA
When comparing costs, it’s crucial to consider each licensing model’s immediate and long-term financial impacts.
- EA Cost Structure: The cost structure under EA typically involves an upfront commitment and annual payments based on the initial license count, with adjustments through the True-Up process. This model can provide substantial savings over time for organizations that qualify for volume discounts.
- MPSA Cost Structure: MPSA operates on a pay-as-you-go basis, making it ideal for companies that need cost control without upfront commitments. Since there’s no minimum threshold, MPSA is an attractive option for those who prefer to scale gradually and avoid large upfront costs.
Ultimately, the choice depends on your organization’s current scale, expected growth, and financial strategy. EA is likely the better option if predictable annual expenses are more appealing and volume discounts provide better value. However, if your company needs flexibility and immediate cost control, MPSA might be the preferred choice.
Software Assurance: EA vs MPSA
Software Assurance (SA) is a key component of both EA and MPSA, but its availability and terms differ:
- EA: SA is included by default and offers a range of features, such as product upgrades, deployment planning services, and 24/7 problem resolution support. This helps ensure that the software is always up to date and that your team has the support it needs.
- MPSA: Software Assurance is optional under MPSA. Organizations can add SA to their licenses, but it’s not required. This allows for cost control, as organizations can choose where SA is most beneficial.
For companies seeking to maximize the value of their Microsoft investment with the latest upgrades and ongoing support, EA with Software Assurance is a great fit. Conversely, if support and updates are less critical, opting for MPSA without SA can save costs.
Flexibility in Licensing
The flexibility offered by EA and MPSA differs significantly, making this a key decision factor for many organizations.
- EA Flexibility: The Enterprise Agreement is less flexible because it requires a minimum three-year commitment and a minimum number of users or devices. However, EA offers flexibility with its annual True-Up, which allows companies to adjust their license numbers each year as the business grows or contracts.
- MPSA Flexibility: MPSA is inherently more flexible because it doesn’t require a long-term commitment or a minimum number of licenses. Businesses can add or remove licenses anytime, making it well-suited for organizations with fluctuating needs or those unsure of future growth patterns.
Cloud Integration and Hybrid Solutions
Both EA and MPSA can be leveraged for cloud solutions, but there are differences in how each agreement supports cloud adoption.
- EA and Cloud Integration: EA is heavily focused on driving cloud adoption. It offers seamless access to Microsoft 365 and Azure services and substantial discounts for companies adopting Microsoft’s cloud solutions. Additionally, Azure Hybrid Benefits can help organizations transition from on-premises infrastructure to Azure by allowing them to use existing server licenses on Azure at reduced rates.
- MPSA and Cloud Integration: MPSA also supports cloud services but is more flexible. Organizations that do not want to commit fully to the cloud or wish to retain more control over cloud expenditure can benefit from MPSA’s non-binding approach. MPSA allows companies to purchase and use cloud services without adopting an overarching cloud strategy.
Managing Compliance and Licensing
Maintaining compliance with licensing terms is critical to avoid costly audits and penalties.
- EA Compliance Management: EA simplifies compliance management by centralizing all licenses under one agreement. This makes it easier to track software usage and ensure compliance. The annual True-Up also ensures that any changes in software use are accounted for, minimizing compliance risks.
- MPSA Compliance Management: With MPSA, compliance management can be more involved due to the flexibility of purchasing and the absence of a single fixed agreement. Organizations need to keep detailed records of license usage to avoid compliance issues. However, adding or removing licenses can help the organization stay compliant if it has proper asset-tracking systems.
Making the Right Choice
Ultimately, your organization’s choice between Microsoft EA and MPSA will depend on its specific needs, size, and growth trajectory.
- Choose EA if Your organization has 500+ users or devices, prefers long-term predictability, needs volume discounts, and values additional support services like Software Assurance.
- Choose MPSA if Your organization is mid-sized, has fluctuating software requirements, prefers flexibility without a long-term commitment, and wants the freedom to scale licenses up or down as needed.
You can determine which agreement best aligns with your business requirements by evaluating company size, budget, growth rate, and cloud adoption goals.
Read our comparison article, Microsoft EA vs Select Plus.
FAQs
What is the Microsoft Enterprise Agreement (EA)? It is a volume licensing program for large organizations with 500 or more users or devices. It consolidates licenses for various Microsoft products and services under a single agreement, offering cost savings and simplified management.
What is the Microsoft Products and Services Agreement (MPSA)? The Microsoft Products and Services Agreement is a flexible licensing solution that allows organizations to purchase Microsoft products and services under a single, non-expiring agreement. It combines elements of the retired Microsoft Select Plus and the Enterprise Agreement.
Who should consider the Enterprise Agreement? The Enterprise Agreement is ideal for large organizations with 500 or more users or devices that require a comprehensive and scalable licensing solution. It offers significant cost savings for high-volume deployments and streamlined management.
Who should consider the MPSA? The MPSA is suitable for organizations of various sizes that need flexibility in purchasing Microsoft products and services. It allows for as-needed purchases without committing to an organization-wide agreement.
What are the main benefits of the Enterprise Agreement? Key benefits of the Enterprise Agreement include cost savings for large-scale deployments, simplified license management under a unified agreement, and the flexibility to add or adjust products and services throughout the term.
What are the main benefits of the MPSA? Key benefits of the MPSA include unified terms and conditions for all purchases, flexibility to buy cloud services and on-premises software without organization-wide commitment, and enhanced asset and expenditure management via the Microsoft Volume Licensing Center.
How does the commitment level differ between EA and MPSA? The Enterprise Agreement requires a three-year commitment with upfront payment, making it suitable for organizations with predictable long-term licensing needs. The MPSA allows for flexible, as-needed purchases, providing more adaptability for businesses with changing requirements.
Can both EA and MPSA be used to purchase cloud services? Yes, the Enterprise Agreement and MPSA support purchasing Microsoft cloud services. The MPSA seamlessly integrates cloud and on-premises software purchases under a single agreement.
How does license management differ between EA and MPSA? The Enterprise Agreement simplifies license management by covering all users or devices under a single agreement. At the same time, the MPSA provides enhanced control over assets and expenditures through the Microsoft Volume Licensing Center.
What types of organizations benefit most from the Enterprise Agreement? Large organizations with 500 or more users or devices, extensive IT infrastructure, and a need for predictable, long-term licensing solutions benefit most from the Enterprise Agreement.
What types of organizations benefit most from the MPSA? Organizations of various sizes, including small and mid-sized businesses, benefit from the MPSA due to its flexibility, non-expiring agreements, and the ability to make as-needed purchases.
How does the purchasing process differ between EA and MPSA? The Enterprise Agreement involves a single, consolidated purchasing process for all licenses and services, while the MPSA allows for more flexible, incremental purchases as needed.
Is there a difference in cost structure between EA and MPSA? The Enterprise Agreement typically offers cost savings through volume discounts and predictable annual payments. The MPSA provides flexibility in spending, allowing organizations to manage costs based on their current needs without a long-term commitment.
What are the administrative requirements for managing an EA? Managing an Enterprise Agreement may require dedicated staff to oversee procurement, license tracking, and compliance. This centralized approach helps streamline administrative tasks for large organizations.
What are the administrative requirements for managing an MPSA? The MPSA is managed using the Microsoft Volume Licensing Center, which tracks and manages assets and expenditures. This user-friendly portal handles administrative tasks and ensures compliance.
