Microsoft Enterprise Agreement vs Open Value: Licensing Comparison for ITAM Professionals

Microsoft Enterprise Agreement vs Open Value

Microsoft Enterprise Agreement vs Open Value is a comparison of two Microsoft volume licensing programs serving different organization sizes and needs.

This article provides IT Asset Management professionals with a clear analysis of each option’s scope, cost structure, and flexibility.

The goal is to help enterprises choose the right agreement and negotiate effectively, especially amid Microsoft’s increasing focus on subscription licensing.

Program Overview: EA and Open Value

Microsoft Enterprise Agreement (EA) is a three-year volume licensing contract designed for large enterprises (typically 500+ users or devices). It bundles software and cloud services under one agreement with organization-wide coverage.

EA offers significant volume discounts and fixed pricing for the term, but requires a considerable upfront commitment to Microsoft products across the business.

Microsoft Open Value (OV) is a simpler volume licensing program for small and mid-sized organizations (5 to 499 users). It also spans three years but is tailored to lower volumes. Open Value allows annual payments and offers two modes: a perpetual license model (owning the software after payment) and an Open Value Subscription model (offering a lower yearly cost, but with licenses rented during the term). OV provides flexibility for smaller deployments without the extensive commitments of an EA.

Key point: EA is suited to large, centralized licensing needs with broad commitments, while Open Value serves smaller-scale or specialized needs with more flexibility and lower entry requirements.

Target Organizations and Eligibility

Choosing between Microsoft Enterprise Agreement vs Open Value largely comes down to organization size and complexity:

• Enterprise Agreement Eligibility: Best for enterprises with 500 or more users/devices. Five hundred seats are the traditional minimum to start an EA. Large global companies with thousands of employees nearly always use an EA to cover their Microsoft software estate under one umbrella. EA’s tiered pricing (Level A for 500+, Level B for 2,400+, etc.) rewards bigger scale – so the more users, the greater the discount per license. Global enterprises also benefit from the EA’s ability to standardize usage across multiple affiliates or regions under a single contract.
• Open Value Eligibility: Aimed at small to mid-sized organizations with between 5 and 499 users. It’s often ideal for businesses that are too small to qualify for an EA or don’t want the obligations that come with one. This can include independent subsidiaries, regional offices, or growing companies that have not yet reached enterprise scale. Open Value is available to commercial, educational, government, and nonprofit customers, offering a volume licensing path without requiring hundreds of seats. There is no strict upper limit on Open Value beyond the practical 499-seat guideline; however, above that, an EA or other program typically becomes more advantageous.
• Mid-Market Considerations: Organizations with 500 users or fewer have a choice to make. If you expect growth beyond 500 and want deeper discounts and centralized management, moving to an EA can be a strategic move. However, Microsoft has been increasingly steering mid-sized customers toward subscription-based alternatives. Recently, some companies with fewer than 2,400 users have been guided away from new EAs in favor of the Cloud Solution Provider (CSP) program or Microsoft Customer Agreements. For those in the mid-market segment, it’s essential to evaluate both EA and Open Value (or CSP) to determine which one aligns best with your near-future size and IT roadmap.

Actionable takeaway: Align your licensing program with your organization’s scale. Use Open Value for smaller groups or decentralized needs, and pursue an Enterprise Agreement once your user count (and software demand) justifies the volume discounts and broader coverage.

Cost Structure and Pricing

Both agreements let you spread payments over a three-year term, but their cost models differ in important ways:

• Enterprise Agreement Pricing: EA offers built-in volume discounts that can range from approximately 15% to 45% off list prices, depending on the number of licenses and your negotiated level. Prices are locked in at signing for the term, protecting you from Microsoft’s annual price hikes or currency fluctuations. You pay in three equal annual installments for the initially committed licenses, making budgeting predictable. If you need more licenses during the term (via the EA “true-up” process), those are usually charged at the agreed price list, and you pay the pro-rated cost at the next anniversary. However, if you overestimated needs, you cannot reduce your count until the end of the 3-year term – meaning you might overspend on unused licenses. EA also includes Software Assurance by default, which increases upfront cost but brings upgrade rights and support value.
• Open Value Pricing: Open Value is generally list-price based for smaller volumes, which means per-license cost might be higher than a large EA’s discounted rate. However, it provides budget flexibility by splitting payments annually and even allows for upfront versus annual payment options (you can pay all at once or in three yearly installments). If you choose the Open Value Subscription route, the up-front costs are even lower – you essentially pay a reduced annual fee to use the software without buying it outright. Open Value doesn’t have formal discount tiers like EA’s Levels A through D. Still, it does reward broader use: an “organization-wide” Open Value commitment (standardizing at least one key product like Office across all PCs) can earn you a platform discount and price protection on those licenses for the term. Unlike EA, Software Assurance (SA) is optional in Open Value’s perpetual model – you can decide product-by-product if you want SA. (In practice, most Open Value agreements include SA since it’s built into the program’s value, except for some specific license-only purchases or renewals.)
• Cost Drivers and Pitfalls: The primary cost driver in an EA is the scope of your commitment – licensing all eligible users or devices for selected products. This breadth can drive volume discounts, but a pitfall is paying for coverage you don’t fully utilize (shelfware) if your user count or deployments shrink. In Open Value, cost is driven by the specific licenses you choose to purchase; you have the flexibility to buy only what you need, but the per-unit pricing is higher, and discounts are limited. One potential pitfall in Open Value is not leveraging the organization-wide option – if you make piecemeal purchases without standardizing, you might miss out on cost savings and simpler management. Additionally, managing multiple small purchases or multiple Open Value agreements can become complex and potentially more expensive than consolidating them into an EA as you grow.

To visualize the differences, here’s a side-by-side comparison of key cost and licensing aspects:

(Table: Comparing Microsoft Enterprise Agreement vs Open Value across major factors.)

In summary, an Enterprise Agreement can deliver more cost savings at scale, but it demands a full commitment and careful monitoring of usage.

Open Value offers predictable budgeting and lower commitment for smaller needs, albeit usually at a higher unit cost. Always forecast your 3-year needs: a well-utilized EA can reduce your average price significantly, whereas a poorly sized EA can waste budget compared to a pay-as-you-go Open Value approach.

Commitment and Flexibility

A critical difference between Microsoft’s Enterprise Agreement vs Open Value is how much you’re required to commit and how easily you can adjust as your needs change:

• Organization-Wide Commitment: The EA is inherently an enterprise-wide agreement. You agree to license all qualified users or devices for the chosen “Enterprise Products” (such as Windows Enterprise OS, Office Pro Plus/Microsoft 365 Apps, and Core CAL or Enterprise CAL suites). This all-in-one strategy simplifies compliance (everyone is covered) and maximizes your volume discount. Still, it’s a rigid commitment – you’re paying for every user, whether they fully utilize the software or not. By contrast, Open Value gives you a choice. You can opt for an organization-wide Open Value (a similar concept that covers all PCs with certain base products to achieve better pricing) or a non-organization-wide Open Value, where you only purchase licenses for specific needs. For example, a 300-user company might decide, under Open Value, to license 300 copies of Office for all PCs (organization-wide) to receive a platform discount, but only 50 copies of specialized Visio software for the specific users who need it. EA would typically require any product categorized as “enterprise” to be purchased for all 300, whereas Open Value allows you to be selective about those additional products.
• Flexibility to Add or Remove Licenses: Both agreements allow for the addition of licenses mid-term; however, removing or reducing licenses is a different matter. In a standard EA, if your user count decreases or you realize you over-licensed, you generally cannot reduce your licensing obligation until the EA’s renewal. You’re effectively locked in for the term on the initial quantity (this is the trade-off for those upfront discounts). The only exception is if you signed an Enterprise Subscription Agreement (a variant of the EA where you don’t own the licenses). In that case, you are allowed to reduce your counts at the anniversary if your workforce or device count shrinks. Open Value’s perpetual offering similarly expects you to commit to the term for any licenses purchased (you’ve agreed to buy them over three years). However, Open Value Subscription stands out for flexibility: it explicitly allows you to decrease the number of licenses at each anniversary to match a reduced PC count, so you’re not stuck paying for licenses you no longer need in year 2 or 3. This makes OVS attractive for organizations with fluctuating staff or device numbers.
• License Portfolio and Product Coverage: An EA is comprehensive – you can include virtually all Microsoft products (cloud services, server software, and desktop software) under one agreement. It’s designed to be a one-stop shop for licensing Microsoft’s catalog in an enterprise. Open Value covers most Microsoft software,too, but often with an emphasis on desktop software and client access licenses. You can certainly buy server licenses through Open Value, but larger server deployments might be more efficiently handled in an EA or other program (like a Server and Cloud Enrollment). One nuance: if a big enterprise tried to use Open Value, they might find it impractical because Open Value contracts are intended for single affiliates or smaller scopes. Large companies typically prefer the central EA for broad coverage, occasionally using Open Value only in edge cases (for example, a small acquired company that isn’t immediately integrated into the EA may use Open Value temporarily).
• Contract Complexity and Management: Managing an EA requires diligent planning – tracking license consumption for yearly true-ups, understanding complex terms (such as how license transfers, device retirement, or mergers are handled), and preparing for renewal negotiations well in advance. It offers one centralized agreement that can simplify compliance if managed well. Open Value agreements are much simpler documents with fewer moving parts. They tend to be easier to administer for small deployments; however, if a larger organization ends up with multiple Open Value agreements for different units, management can become fragmented. In general, EA centralizes control (with the cost of strict standards), whereas Open Value decentralizes it (with the benefit of flexibility but the risk of inconsistency if not coordinated).

Insight: If your organization values agility and expects change (like fluctuating headcount or partial migrations to cloud), consider a subscription-based arrangement (EA Subscription or Open Value Subscription) for built-in flexibility.

If stability and uniform coverage are key, a standard EA or an Open Value company-wide agreement ensures everyone is on the same page. Always weigh the cost of unused licenses (as outlined in a rigid agreement) against the administrative overhead of managing more flexible deals.

Subscription Licensing: The Shift in Focus

Microsoft is heavily pushing towards subscription-based licensing across all customer segments – and this affects how we evaluate EA vs Open Value in 2025 and beyond.

Both programs can accommodate subscriptions, but with some differences:

• Enterprise Agreements & Subscriptions: Today’s enterprise agreements often center on cloud subscriptions, such as Microsoft 365 (formerly Office 365) and Azure services. You can include user-based subscriptions (e.g., Microsoft 365 E3/E5 plans) under your EA just like traditional licenses. There is also the Enterprise Subscription Agreement option for on-premises software, which means you’re “renting” software licenses (e.g., Windows 10 Enterprise or Office) during the EA term instead of owning them. Many organizations choose this option if they prefer a lower upfront cost and plan to continually refresh their technology. Under an Enterprise Subscription EA, at the end of three years, you don’t get to keep using the software unless you renew or buy it out – but you gained flexibility to reduce counts if needed and saved money in the interim. Importantly, Microsoft provides price advantages for committing to cloud services in an EA (and programs like Azure Hybrid Benefit to reuse on-prem licenses in the cloud). Trend: In late 2024, Microsoft began declining some smaller EA renewals, nudging those customers toward the CSP program – indicating a stronger push toward more agile, subscription-centric agreements, especially for mid-market clients.
• Open Value Subscription: This flavor of Open Value is explicitly subscription-based. Instead of purchasing perpetual licenses, you pay an annual subscription fee (for three years) for the right to use the software. It’s often ~40-50% lower cost per year than buying outright, but at the end of the term, you have no licenses unless you renew or exercise a buy-out option. Open Value Subscription is attractive to organizations that want the lowest barrier to entry, the ability to adjust downwards each year, and who are comfortable with not owning the software long-term. It also inherently includes Software Assurance benefits during the term (since you’re always on the latest versions by subscription). Microsoft has kept the Open Value Subscription available, even as it retired the old Open License program, signaling that subscription models are the future for smaller customers as well. Suppose a small organization is interested solely in cloud services and subscriptions. In that case, Microsoft’s CSP program may be an alternative to the Open Value Subscription now – but the OV Subscription still works well for those needing a mix of on-premises software rights plus cloud services in a unified agreement.
• Hybrid and Cloud Transitions: Both EA and Open Value allow a gradual transition to cloud services. Under an EA, you might start with mostly on-prem licenses and then swap some to cloud subscriptions at renewal or add Azure credits, all under the same contract. Open Value allows you to attach online service subscriptions (like Microsoft 365 or Azure) to your agreement as well, so a small company can move to the cloud at its own pace without signing a separate contract. In practice, an EA tends to be used by cloud-forward enterprises that commit to large bundles (and receive incentive discounts for doing so). In contrast, a smaller customer may opt for Open Value while trialing some Office 365 subscriptions through their reseller.
• Perpetual vs. Subscription Mindset: A major consideration for ITAM professionals is the long-term strategy – do you want to own software licenses as assets on the balance sheet, or treat software as an ongoing service expense? Enterprise Agreement gives you the choice (perpetual EA or subscription EA). Open Value gives you the same choice on a smaller scale (standard vs subscription). Microsoft’s roadmap (e.g., introducing subscription-only versions of certain server products and continually adding cloud services) suggests that even traditionally perpetual workloads will have subscription elements. Many enterprises are now focusing on subscription licensing for flexibility and up-to-date capabilities. Even some large organizations that qualify for EA are supplementing or replacing parts of it with subscription programs, such as CSP, for greater flexibility. The key is to ensure that, if you opt for the subscription route, you’re prepared for the recurring costs and potential vendor-driven price increases over time.

Bottom line:

Subscription licensing is becoming the norm, with Microsoft incentivizing it. Use an Enterprise Agreement when you need a structured, enterprise-grade way to bundle and possibly get discounts on those subscriptions.

Use Open Value Subscription or CSP if you need subscription licensing at a smaller scale or want more month-to-month flexibility.

If you still require perpetual licenses (for example, to maintain legacy systems indefinitely without ongoing fees), a standard EA or Open Value agreement can secure those with Software Assurance – but plan for a future where even those might convert to subscriptions.

Negotiation and Contract Management

Handling a Microsoft Enterprise Agreement vs an Open Value agreement involves different levels of negotiation and oversight:

• Negotiating an EA: Enterprise Agreements are typically negotiated with Microsoft (often via a Large Account Reseller partner). There’s substantial room for negotiation on pricing and terms if you have leverage. Enterprises will gather usage data, forecast future needs, and often engage in lengthy negotiations to secure additional discounts beyond the standard volume tier, obtain favorable terms (such as extended price locks, special transition rights, or even concessions like training credits), and address any unique needs through contract amendments. Microsoft account teams expect larger customers to negotiate; as a result, EA pricing can vary widely between companies, depending on their size and level of savvy. From an ITAM perspective, preparing for an EA negotiation means starting early – often 6 to 12 months before renewal – to assess what licenses are needed, identify any shelfware to potentially cut, and benchmark what a fair discount should be. Additionally, the EA comes with a thicker contract (often 30+ pages plus product terms) that may require legal review for any non-standard clauses. Ensuring you negotiate not only unit prices but also legal terms (such as liability, renewal options, and flexibility to transfer licenses) can be crucial for global enterprises.
• Negotiating Open Value: By contrast, Open Value is much less negotiable. It’s sold through Microsoft resellers and generally follows a published price list. Small variations in pricing can come from the reseller’s discount on their margin or promotions, but you won’t get the kind of custom deal you might with an EA. The agreement itself is a standard template; there’s usually no room to alter terms – it’s a “click-accept” style volume license agreement. ITAM professionals dealing with Open Value should focus on optimizing what products they include (for example, deciding if Software Assurance is worth it for each purchase, or if the subscription version might save money) rather than negotiating the base prices. You can request quotes from multiple Microsoft partners to see if any offer a better rate or added services, but the pricing differences tend to be modest. The simplicity of Open Value is that once you’ve signed it, managing it is straightforward: track your licenses in Microsoft’s Volume Licensing Service Center, and work with your reseller for any additions. There’s no annual true-up formality – you simply order new licenses as needed (and, in the case of an org-wide commitment, ensure you report changes in PC count annually for subscription adjustments).
• Contract Management Best Practices: For EA, it’s crucial to maintain an Effective License Position (ELP) throughout the term. Perform internal true-up counts regularly, not just at the anniversary, to avoid last-minute surprises. Document any non-standard usage rights you negotiated, because at renewal, those might not automatically carry forward – you may need to renegotiate them. Keep an eye on Microsoft’s product roadmaps; for instance, if they announce a new product that could replace something you’re licensing, you might negotiate transition rights in your EA. With Open Value, effective contract management involves tracking agreement end dates (to renew or plan a buyout in the case of a subscription) and maintaining proof of license documentation for all purchases. While simpler, Open Value can proliferate – some enterprises end up with multiple Open Value agreements in different countries or departments. It’s wise to consolidate them or at least centrally record them, so nothing slips through the cracks (e.g., a support renewal missed because an agreement lapsed). Another tip: If you anticipate possibly moving to an EA later, time your Open Value so that it can be transitioned gracefully or expire. Microsoft generally doesn’t allow mid-term cancellation of Open Value without penalty, so you’d align any future EA to start when an Open Value ends, or explore transferring those licenses into the EA at renewal (it may involve some proration or credit).
• Renewal and End-of-Term: At the end of an EA, if it’s a non-subscription EA, you have perpetual rights to the last licensed version of products—but losing Software Assurance means losing upgrade rights and other benefits going forward. Many large customers therefore renew their EA to maintain support and keep getting updates (especially for products like Windows that require SA for certain enterprise use rights). Plan renewal strategy early: it’s an opportunity to renegotiate from scratch, since a renewal is essentially signing a new EA. For Open Value, an end-of-term on the perpetual side simply means you’ve fully paid for your licenses and can continue using them; you then decide if you want to start a new Open Value agreement to keep getting upgrades via SA. If it’s Open Value Subscription, you have a decision at end-of-term to either renew the subscription, exercise a buy-out option (typically paying a final fee to convert those subscriptions into perpetual licenses you own), or to let the subscription lapse (which would require removing the software). This gives a small business an exit strategy if they no longer want to continue subscribing, but it requires budgeting for that buy-out if they need the software indefinitely.

Expert tip:

Always diarize critical dates (EA anniversary and expiration; Open Value anniversary and end date). Use those milestones to reassess your needs and options. For an EA, involve finance and procurement teams well ahead of the renewal to identify negotiation goals.

For Open Value, review whether your organization has grown to the point where an EA or other program now makes sense.

In all cases, maintain open communication with your Microsoft reseller or account manager to stay aware of program changes or new offers that could benefit (or impact) your agreements.

Choosing the Right Agreement

Deciding between Microsoft Enterprise Agreement and Open Value comes down to evaluating your organization’s current state and strategic plans. Here are some scenarios and guidance to help choose:

• Large Global Enterprise (5000+ users): An Enterprise Agreement is almost always the right choice to maximize discounts and manage licenses centrally. The sheer volume makes Open Value impractical and more expensive per license. With an EA, you can also negotiate global pricing and ensure all subsidiaries are covered uniformly. Actionable insight: Use your size as leverage to get the best EA terms – Microsoft highly values large EA customers, so don’t leave any discount or benefit on the table.
• Mid-Sized Company (say 800 users): You’re eligible for EA, but at the lower end of volume tiers. If you expect growth or require a comprehensive range of Microsoft technologies (Windows, Office, Azure, etc.), an EA can streamline management and potentially help keep costs down as you scale. On the other hand, if your usage is fairly static or you’re cautious about overcommitting, you could stick with Open Value (or CSP subscriptions) to maintain flexibility. Microsoft might not push a strong discount at 800 seats (you’d be Level A pricing in EA, which is similar to CSP pricing), so the benefit of EA might be more about convenience than huge savings. Advice: Compare the 3-year total cost under an EA vs an Open Value Subscription. Sometimes the EA’s mandatory coverage of all users for certain products might inflate costs if not everyone needs the software, whereas Open Value lets you purchase for only those who do. The choice hinges on whether uniform deployment (EA’s all-in approach) aligns with your actual usage patterns.
• Small Organization (50–100 users): An EA is off the table (under the minimum), so Open Value is the go-to if you want volume licensing benefits. At this size, also evaluate the CSP program, especially if you’re leaning heavily into cloud services (like Microsoft 365 or Dynamics 365). CSP can offer monthly flexibility, but the Open Value Subscription will provide a predictable annual bill and the option to mix on-premises licenses with SA. If you have stable on-prem software needs and want ownership, Open Value (perpetual) with SA might be attractive – you’ll get three years of upgrades and then keep the licenses forever. Recommendation: For very small businesses, simplicity is key – Open Value, offered through a single trusted reseller, can cover your needs with minimal administrative burden. Ensure you aren’t buying more than you need; one advantage of being small is that you can be nimble and only acquire software when a user truly needs it.
• Enterprise with Decentralized Units: Consider a scenario in which a large enterprise acquires a smaller company or operates semi-autonomous business units. The main company might have an EA, but the new 200-person acquisition is not yet integrated. In the meantime, the smaller entity could utilize an Open Value agreement to remain licensed. Over time, at the next EA renewal, the parent company can choose to fold those users into the EA (often preferable for consistency and discount scaling). This staged approach avoids forcing an immediate EA renegotiation while ensuring the smaller unit isn’t left on retail licenses. That said, managing multiple agreements requires careful attention – you don’t want to double-pay or lose track. Key point: Microsoft does allow customers to have concurrent agreements, but be mindful of the rules (for example, a device covered under an EA shouldn’t also be licensed separately under Open Value – no double-dipping). It may be beneficial to consolidate as soon as possible for simplicity.
• On-Premises vs. Cloud Strategy: If your organization maintains significant on-premises infrastructure and wants to retain perpetual rights, an EA with Software Assurance or Open Value (with SA or subscription) will be essential to cover upgrade rights. If you’re going “cloud-first” and don’t care about owning software, you might prioritize subscription agreements. A cloud-first large enterprise will lean toward an EA because it can bundle Azure and Microsoft 365 with better account support and incentives. A cloud-first small org could skip Open Value entirely and just use CSP monthly subscriptions for maximum flexibility. However, note that CSP doesn’t include traditional Software Assurance benefits (such as downgrades or passive rights for on-premises deployments). In contrast, EA/OV with SA is not necessary if you have even a bit of hybrid need (e.g., using Windows Server CALs or needing to downgrade the Windows OS on a PC); in such cases, Open Value or EA might be required.

In choosing the agreement, perform a scenario analysis: What does our cost look like over 3 years under each option? Where do we gain flexibility, and where do we lose it? How critical are SA benefits and upgrades to us?

Also, consider the administrative overhead – a single EA can simplify life if you’re large enough, versus managing 10 separate smaller license purchases could become a headache (and risk non-compliance).

Conversely, if you’re very small or in flux, committing to an EA might be like using a sledgehammer to crack a nut – overly heavy and potentially costly if you’re not utilizing it.

Conclusion: The Microsoft Enterprise Agreement vs. Open Value is not about which program is universally “better,” but rather which one is better suited for your organization’s profile. Enterprises should periodically reassess their choice as they grow or as Microsoft’s licensing rules evolve.

The right agreement today might change in a few years (for instance, if you drop below a size threshold or if Microsoft introduces new licensing programs). Staying informed and adaptable is part of ITAM’s role in optimizing software costs.

Recommendations (Practical Tips)

1. Conduct a self-audit of your licensing needs: Before entering or renewing any agreement, inventory your current Microsoft software usage. This will prevent over-licensing in an EA and identify which products truly need to be covered enterprise-wide.

2. Consider future growth and cloud plans: If you expect significant growth or a major cloud migration, lean toward an agreement that can scale with you. A fast-growing company nearing 500 seats might negotiate an EA early to lock pricing, whereas a static company might save money sticking with Open Value.

3. Leverage the subscription flexibility wisely: If you choose an Enterprise Subscription Agreement or Open Value Subscription, take advantage of the ability to true-down. Regularly review your user count before each anniversary and adjust your subscription quantities to avoid paying for unused licenses.

4. Start EA renewal prep early: For enterprise agreements, begin planning 12+ months. Gather internal requirements, set budget limits, and engage with Microsoft or your LSP (Licensing Solution Provider) to discuss options. Early preparation strengthens your negotiation position and avoids last-minute pressure.

5. Use Software Assurance benefits or reconsider them: You’re paying for SA in an EA (and in OV Subscription). Be sure to utilize the benefits – such as upgrade rights, training vouchers, and the home use program – to maximize value. If you find you aren’t using these, it might influence whether a future agreement should include them or if a subscription model (which inherently includes upgrades) is preferable.

6. Don’t mix licensing programs without a plan: If you have an EA, avoid buying extra licenses separately through Open Value or retail on the side, as this can lead to compliance issues and wasted spend. Consolidation generally yields better pricing. Only use a secondary program (like OV or CSP) for isolated cases, and document those exceptions.

7. Benchmark and get multiple quotes: Even though EA is negotiated with Microsoft, you can (and should) benchmark the discount they offer against industry standards or third-party analysts’ data. For Open Value, ask a few resellers for quotes – one might include a slightly better rate or added services. Competition ensures you’re not leaving money on the table.

8. Plan for agreement end-of-life: Have an exit or renewal strategy. For EA, if you’re considering not renewing, understand which perpetual licenses you’ll retain and if you can live without SA. For an Open Value Subscription, budget for the buy-out in case you need to continue using the software after the subscription expires. Surprises at term end can be costly.

9. Stay informed on Microsoft licensing changes: Subscribe to Microsoft licensing news or work with a licensing expert. Microsoft frequently adjusts program terms (for example, raising EA minimums or altering CSP pricing). An informed ITAM team can anticipate changes (such as Microsoft pushing sub-2400 seat customers to CSP) and adapt their strategy proactively.

10. Engage stakeholders: Licensing strategy isn’t just an IT decision – involve finance, procurement, and business leaders. For instance, an EA might allow better financial predictability, which CFOs appreciate, while a subscription model might align with operating expense preferences. Getting buy-in on the chosen agreement type will make execution and compliance smoother.

Checklist: 5 Actions to Take

1. Assess Your Environment: Gather data on your total user/device count, as well as the Microsoft products in use. Determine if you meet the size for an EA or if Open Value/CSP is your current option. This assessment includes verifying current license entitlements and reviewing any existing contracts.
2. Evaluate Options and Costs: For your scenario (current and 3-year projections), model the costs of an Enterprise Agreement, Open Value, and CSP. Include factors like Software Assurance value, needed cloud services, and potential growth/shrinkage. Use Microsoft’s pricing sheets or get preliminary quotes to compare.
3. Engage Your Microsoft Partner: Initiate discussions with your Microsoft account team or reseller to explore opportunities. If you’re an enterprise-scale customer, let them know you’re evaluating the EA – they can provide program details and maybe incentives. If you’re smaller, consider consulting with a certified reseller about Open Value and inquire about any available promotions or how subscription versus perpetual licensing would work in your specific case.
4. Choose and Plan the Agreement: Determine which licensing program best suits your needs and outline the timeline. If going with an EA, assemble a negotiation team and timeline (with a clear renewal date or signing date in mind). If you opt for Open Value, schedule the purchase to align with any upcoming needs (and remember that you need a minimum of 5 licenses to start). Also, plan internal communications – e.g., if moving from individual purchases to an EA, inform IT staff of the new centralized process.
5. Implement License Management Processes: Once the agreement is in place, establish processes to manage it effectively. For an EA: Implement a tracking mechanism for new hires or deployments to accurately true up; diarize the annual checkpoint. For Open Value: Ensure you record each license addition. If using Open Value Subscription, verify the PC count each year to adjust the subscription accordingly. In all cases, maintain documentation and ensure that someone is responsible for monitoring the agreement milestones to prevent lapses or non-compliance.

By following this checklist, your organization can systematically approach the EA vs Open Value decision and maintain control over the chosen licensing program.

FAQs

Q: Our company has 400 users. Should we attempt to secure an Enterprise Agreement or utilize Open Value?
A: With 400 users, you’re below Microsoft’s standard EA minimum of 500, so an Enterprise Agreement likely wouldn’t be offered (except perhaps for public sector or through an exception). Open Value or the CSP program would be the appropriate choice. Open Value allows you to license only what you need, without overspending. Once you grow beyond 500, you can reconsider an EA to take advantage of greater discounts.

Q: Can a large enterprise ever use Open Value agreements?
A: Generally, large enterprises stick to an EA for core licensing, but there are scenarios where Open Value might be used by a big company – for example, a smaller acquired subsidiary or a specific country branch might use Open Value if it’s not feasible to immediately include them in the central EA. However, as a large company, consolidating under the EA is usually more cost-effective. If you do use Open Value in a large organization, keep the agreements limited and plan to integrate those licenses into your EA at renewal if possible.

Q: What happens if we reduce our employee count during an EA? Are we still required to pay for licenses we don’t use?
A: In a standard Enterprise Agreement, yes, you are committed to the initial quantity for the full term – you can’t reduce your payment obligation mid-term even if your headcount drops. You would simply true-up zero and renew at the lower count later. The exception is if you signed an Enterprise Subscription Agreement, which does allow annual adjustments downward; in that case, you could reduce the license count at the next anniversary to align with the lower employee count. Similarly, Open Value Subscription lets you decrease your license count each year if your PC count shrinks, whereas the regular Open Value (perpetual) doesn’t allow returns once purchased. Always choose the agreement type based on how stable or variable you expect your usage to be.

Q: Are cloud services like Microsoft 365 and Azure covered under EA and Open Value?
A: Yes. An Enterprise Agreement can include Microsoft 365 subscriptions, Azure consumption (often via an Azure monetary commitment), Dynamics 365, and other cloud offerings alongside traditional licenses. It’s a comprehensive contract for both cloud and on-prem. Open Value allows you to add online service subscriptions too. For example, you could procure Microsoft 365 Business Premium seats through an Open Value agreement. The difference lies in scale and incentives: an EA might offer better pricing or credits for large cloud commitments, whereas Open Value is simply a convenient way for smaller customers to bundle some cloud subscriptions with their other licenses. If you’re fully cloud-based and small, sometimes going direct with CSP is even more straightforward – but many organizations prefer the predictable billing of an Open Value three-year term for cloud services as well.

Q: What do we do at the end of a licensing agreement?
A: As you approach the end of an agreement term, you have a few options:

• If it’s an Enterprise Agreement (non-subscription) and you choose not to renew, you retain perpetual rights to the software versions you had licensed as of the end. You should plan for how to stay compliant in the future – e.g., you won’t receive upgrades or new licenses without a new purchase or agreement. If you do renew the EA, you’ll sign a new 3-year contract, often just covering Software Assurance to keep everything up-to-date (if you already own the licenses).
• Suppose it’s an Enterprise Subscription Agreement and you don’t renew. In that case, you lose the rights to use the software, so you’d need to either renew, negotiate a different deal, or potentially exercise a buy-out (Microsoft sometimes allows a one-time purchase of licenses at term end for subscription EAs if you want to convert to perpetual).
• For Open Value, if it’s the standard (perpetual) type, once the 3 years of payments are done, those licenses are yours forever. You can then decide to start a new Open Value agreement if you want to continue with Software Assurance (for upgrades) on those products. If it’s an Open Value Subscription, at the end, you can renew for another term, or use the buy-out clause in the agreement to purchase permanent licenses for the software (at a discounted rate, since you’ve paid for three years already). If you neither renew nor buy out, you will need to uninstall or stop using that software after the agreement expires. Planning is key – begin discussing renewal or end-of-term options with your reseller or Microsoft a few months before expiration so you can smoothly transition without compliance gaps or surprise costs.

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