Microsoft Enterprise Agreement vs CSP: Choosing the Right Microsoft Licensing Model

Microsoft Enterprise Agreement vs CSP

Microsoft offers two primary enterprise licensing models: the Enterprise Agreement (EA) and the Cloud Solution Provider (CSP) program.

Both options can outfit a global enterprise with Microsoft software and cloud services, but they differ in contract structure, flexibility, cost predictability, and support.

This advisory note provides CIOs, CTOs, and CFOs a side-by-side analysis of Microsoft EA vs CSP to help determine which model aligns best with your organization’s needs.

In short, EAs offer long-term cost predictability and volume discounts, while CSP agreements provide agility and pay-as-you-go flexibility.

The right choice depends on your enterprise’s size, budget strategy, and appetite for flexibility versus commitment.

Microsoft Enterprise Agreement (EA) Explained

The Microsoft Enterprise Agreement (EA) is a long-standing licensing contract tailored for large enterprises.

It is typically used by organizations with 500 or more users (and Microsoft has indicated that this minimum may increase to 1,000 or more in the future).

Under an EA, you sign a 3-year agreement directly with Microsoft (through an authorized Licensing Solution Provider), covering a broad set of Microsoft products for all qualified users or devices in your company.

Key features of an EA include:

• Multi-year commitment: You commit to a three-year term, locking in pricing and terms for the duration of that period. This price lock shields your budget from Microsoft’s price increases during the term.
• Volume-based pricing: EA pricing is tiered by volume (Levels A–D); the more users or devices licensed, the lower the per-license cost. Large enterprises can negotiate substantial discounts off list prices by leveraging their scale.
• Enterprise-wide coverage: You typically must license all users for certain key products (like Office 365, Windows, or CAL suites) to enter an EA. In return, you get a standardized set of tools enterprise-wide.
• Annual true-ups: Each year, you report and pay for any increase in license count (e.g., new employees or added software usage) via an annual true-up process. However, reducing license counts is generally not allowed until the EA’s end – making it critical to accurately forecast needs. (For example, if you downsized by 10% mid-term, you would still be paying for those unused licenses until renewal.)
• Mixed perpetual and subscription licenses: Traditional EA contracts can include perpetual licenses with Software Assurance and subscription licenses for cloud services. Perpetual licenses (for on-premises software) grant you usage rights even after the term has fully paid, whereas cloud services cease when the subscription ends.
• Separate support contract: Support is not included in an EA. Enterprises usually purchase a Unified Support or Premier Support plan separately, which can be a significant additional cost (often calculated as a percentage of your EA spend).

EA Example: A multinational firm with 5,000 employees might sign an EA to standardize all users on Microsoft 365 E3 and Windows 11 Enterprise. They negotiate Level C volume pricing and lock it in for three years.

The company appreciates that its annual IT spend on Microsoft licenses will be predictable. However, they also plan carefully – if they overestimate usage, they’ll overpay until the next renewal. If they grow faster than expected, they budget for true-up costs each year.

Why choose EA? Enterprises opt for EAs when they value predictable costs, centralized control, and negotiated discounts over flexibility and adaptability.

If your organization is stable in size and wants to budget three years out with fixed per-user costs, an EA provides that certainty.

It’s especially suited for large, steady-state environments that can fully utilize the committed licenses and where negotiating power can unlock significant savings and benefits (like training vouchers or special terms).

CIOs and CFOs often prefer the EA’s long-term cost stability and the direct relationship with Microsoft for escalations.

Cloud Solution Provider (CSP) Program Explained

The Cloud Solution Provider (CSP) program is Microsoft’s modern, flexible licensing channel. Instead of a direct contract with Microsoft, you purchase licenses through a Microsoft CSP partner (a qualified provider or reseller).

CSPs are available to organizations of any size – there are no minimum seat requirements, so both enterprises and smaller businesses can use this model.

The CSP program is all about pay-as-you-go flexibility and partner-managed services.

Key features of CSP include:

• Flexible terms and billing: No long-term contract is required; you can add or remove subscriptions at any time. You only pay month-to-month for what you use, or you can opt for longer terms (like annual or 3-year subscriptions for certain products) if that suits your needs. This means lower upfront costs – a big upfront commitment doesn’t bind you.
• Scale up or down as needed: You can adjust license quantities at any time. If you hire new staff or start a project, add licenses instantly. If you have attrition or a project ends, you can reduce licenses and costs in the next billing cycle. This elasticity prevents overspending on unused licenses (a stark contrast to the EA).
• Partner-managed support: A CSP comes with support provided by the partner. The CSP partner handles your billing and serves as your primary point of contact for support and service requests. Good CSP partners offer personalized, proactive support, often with knowledge of your environment to help optimize usage. (For example, a CSP partner might alert you to underutilized Azure resources to cut costs – a level of attention you might not get directly from Microsoft without a paid Premier support engagement.)
• No direct Microsoft contract: The legal agreement is typically the Microsoft Customer Agreement, which is provided via the partner and is an evergreen contract (i.e., no fixed term). Microsoft sets base pricing, but the partner may offer custom pricing or discounts depending on your relationship and volume. In CSP, partners have some latitude to provide incentives or bundle services.
• Azure and cloud services focus: CSP is ideal for cloud services. You get a pay-as-you-go model for Azure – no upfront monetary commitment is required as it would be under an EA. You simply pay for actual consumption each month. This is great for unpredictable or growing cloud workloads. All Microsoft online services (Microsoft 365, Dynamics 365, Azure, etc.) are available via CSP. (Note: On-premises perpetual licenses can also be bought via CSP now, but the program is primarily designed for cloud subscription management.)
• Continuous updates, no legacy Software Assurance: Because CSP deals largely in subscription licenses, traditional Software Assurance (SA) benefits (like upgrade rights or training days) are not packaged the same way. However, subscriptions like Microsoft 365 include most of those benefits inherently (e.g., continuous updates to the latest versions). For needs like training or consulting, many CSP partners offer their own value-added services.

CSP Example: A global organization with 800 users decides not to renew its EA and instead buys licenses through a CSP partner. They move to monthly subscription billing for Microsoft 365.

Over the year, if they spin up a new team of 50 contractors for a six-month project, they just add 50 licenses for those months and then remove them later – only paying for the time used.

When they close an office, they quickly reduce the number of licenses to avoid further costs. Their CSP partner also assists with cloud optimization and provides quarterly reports to the CIO on license usage.

Why choose CSP? Enterprises favor CSP when they need agility, scalability, and service. If your user count fluctuates or you’re in high-growth (or contraction), CSP ensures you’re only paying for what you use.

CFOs appreciate not having capital tied up in long contracts and the ability to treat software as an operating expense that aligns with actual headcount or usage.

The predictable monthly invoicing can simplify cash flow management (though note, “predictable” in CSP means no surprises in billing format, but costs will scale with usage).

Additionally, CSP works well if you want a hands-on partner that can provide support and cloud expertise, rather than relying solely on Microsoft’s standard support channels.

CSP is also a natural choice for organizations that don’t meet EA’s size threshold or for those transitioning a larger portion of their IT budget from fixed to variable costs.

Cost Structure and Commitment: Predictability vs. Flexibility

When comparing the Microsoft Enterprise Agreement (MEA) to CSP, one of the key considerations is the balance between cost predictability and cost flexibility.

Each model handles pricing and commitments differently, affecting your financial planning and potential savings:

• Upfront commitments and discounts (EA): With an EA, you often negotiate pricing upfront based on a committed quantity of licenses for 3 years. In many cases, this yields a lower price per user than ad-hoc purchasing. Volume discounts in an EA can be significant, especially at higher levels (e.g., 2,400+ users). Enterprises can also negotiate custom terms or additional discounts if they commit to broad adoption of Microsoft’s products (for example, committing to Office 365 E5 for all users might earn extra concessions). The trade-off is that you are locked into that commitment – the organization pays those license costs regardless of actual usage fluctuations. From a CFO’s perspective, an EA can be beneficial for budget stability: you know your annual Microsoft licensing cost in advance (barring growth true-ups). There’s also protection against list price increases – even if Microsoft raises global prices, your rate stays the same until the EA expires.
• Pay-as-you-go and operational spend (CSP): Under CSP, there is no large upfront licensing bill. You typically pay on a month-to-month basis, either per user or per consumption. This aligns costs directly with your current workforce and usage. If your company downsizes or delays a project, your Microsoft bill can decrease immediately, which avoids sunk costs on unused licenses. Conversely, if you expand or have higher usage, your costs will increase in tandem. CSP pricing is often based on Microsoft’s retail rates (or a slight discount from the partner). While you might not get the ultra-deep volume discounts of a big EA, you also don’t have to over-buy licenses “just in case.” In effect, CSP turns what might be a capital expenditure in an EA into a variable operating expense. Financial flexibility is high, but note that predictability is lower – you’ll need to forecast usage to accurately project costs. Also, month-to-month flexibility comes at a price: Microsoft’s new commerce pricing model applies a ~20% premium on month-to-month subscriptions (you pay less per license if you commit to a full year or multi-year in CSP). So, if you truly need month-to-month flexibility, budget for that premium or consider annual terms for stable portions of your need.
• True-ups vs. continuous adjustment: In an EA, if you exceed your licensed count, you perform a true-up and pay the added licenses pro rata for the remainder of the term (and then they’re locked in going forward). In CSP, adding licenses simply increases the next invoice; dropping them will decrease future invoices. There’s no concept of a yearly reconciliation because you are continuously in sync with usage. This means EA can lead to year-end surprises if not managed (new, unbudgeted licenses are discovered at true-up), whereas CSP can lead to month-by-month cost swings if usage isn’t steady.
• Cost over time: Over a full three-year period, the model’s costs are lower, which can depend on your specific situation. A fully utilized EA with a good discount can have a lower average unit cost than CSP’s month-to-month pricing. However, any EA licenses you paid for but didn’t use are pure waste. CSP might have a higher sticker price per unit, but if it prevents paying for 15% of licenses that lie idle, it could yield a lower effective cost. It’s essential to model scenarios: if your user count remains constant or grows steadily, EA’s locked rates might prevail; if your needs fluctuate or you’re uncertain about future demand, CSP might save money by trimming unused expenses. Some organizations even adopt a hybrid approach (see recommendations) to strike a balance between these factors.

To illustrate the major differences, here’s a high-level comparison table:

License Flexibility and Scalability

One of the most practical differences between Microsoft EA and CSP is how each handles changes in your license needs over time.

Enterprises rarely stay static – you acquire companies, divest units, scale up projects, or face downsizing.

How easily can you adjust your Microsoft licensing in each model?

• EA: Scale mostly one-directional (upwards). With an EA, you start with a committed number of licenses for each product. If you need more, you can always add them – Microsoft is happy to let you grow, and you’ll just true-up and pay for the additions at the agreed price. However, if you need to reduce licenses (for example, you had 1,000 Office 365 seats and now only require 900), the EA offers no mechanism to decrease your financial commitment until the end of the three-year term. You’ll continue to pay for 1,000, and you own those licenses for the term, even if not used. This means CIOs need to be cautious and perhaps conservative in setting baselines – overcommitting in an EA can result in paying for shelfware (unused licenses) for years. The EA shines in stable or growth scenarios, but it’s less friendly when trying to contract. Some flexibility exists at renewal (you can adjust your quantities or even drop products then). If you signed an Enterprise Agreement Subscription (EAS) variant, you have the option to reduce it at each anniversary. However, in the mid-term, an EA assumes a relatively static deployment.
• CSP: Scale up and down fluidly. The CSP model was built for cloud-era agility. Need 100 extra Windows 11 E5 licenses for a new project team? Add them via your partner portal – they’ll be pro-rated for the month. If 300 employees leave or a department closes, you can remove those 300 licenses and you won’t be billed for them next month. This elasticity is extremely valuable for enterprises with fluctuating needs. For example, a retail enterprise ramping up staff for the holiday season can add hundreds of Microsoft 365 accounts for a few months, then drop them in the new year, optimizing costs. In an EA, that seasonal bump would have locked the company into higher counts (and costs) all year. CSP enables true consumption-based licensing, aligning with business operations. The only caveat is if you’ve opted for an annual term for a specific subscription to save money, you’ll want to wait until that term is up to reduce those licenses (or incur a cancellation fee). But overall, CSP is far more forgiving when scaling down. This flexibility empowers IT and finance teams to closely align licensing with actual headcount or usage at any given time.
• Responding to change: If your enterprise anticipates significant mergers, acquisitions, or divestitures, consider how each model would address them. Merging organizations might temporarily need double licenses during transition (CSP could handle short-term overlaps more gracefully, whereas with EA, you might run into licensing true-up complexities). In a divestiture, CSP allows you to immediately reduce licenses post-spin-off; an EA would require you to continue paying for users who are no longer with the company until the end of the term. For high-growth tech companies or those in volatile industries, the ability to downsize risk is often a deciding factor that makes CSP attractive. On the other hand, a very stable enterprise (e.g., a utility company or government agency with a predictable workforce and IT services) might not need this flexibility. It could prioritize cost stability via an EA.

In summary, if agility and rapid scaling are priorities, CSP outperforms EA. But if your environment is predictable and well-planned for the long term, the rigidity of an EA may not be a major issue and could be acceptable in exchange for other benefits.

Support and Value-Added Services

Support and additional services differ considerably between EA and CSP, and these differences can impact the IT department’s experience as well as the total cost of your Microsoft relationship:

• Support in an EA: Enterprise Agreements themselves do not include support hours or services. Enterprises typically need to invest in a Microsoft support plan, such as Unified Support (formerly Premier). Unified Support can be expensive – often calculated based on a percentage of your EA’s total annual spend (and that percentage can rise if you consume more cloud services). The benefit is direct access to Microsoft’s support engineers and a defined response framework for critical issues. However, many enterprises find that for day-to-day support or optimization questions, Microsoft’s support might feel reactive. The EA model assumes your IT staff will handle most operations, and you call Microsoft for break-fix or escalation issues. Additionally, EAs with Software Assurance provided perks such as training days, planning services, and limited support incidents – but Microsoft has been evolving these programs as cloud services become the norm. If having direct Microsoft contacts and the ability to escalate issues to Microsoft’s engineering teams is important, you’ll likely need a support contract on top of the EA, which should be factored into the total cost of going the EA route.
• Support in CSP: In the CSP model, the partner is your support provider. Microsoft requires CSP partners to handle at least Level 1 support for their customers. A good CSP partner will offer a support plan (sometimes included in the cost of the licenses, sometimes as an add-on) that covers everything from basic help (password resets, configuration guidance) to escalation management with Microsoft on your behalf. This partner-led support can often feel more personalized and responsive because the partner’s team often knows your environment and is motivated to keep you satisfied (it’s a competitive market). Many enterprises report that a skilled CSP partner provides support that’s as good as or even better than Microsoft’s own, especially for cloud services, because the partner can also help with usage optimization and best practices – not just break-fix. For instance, a CSP partner might proactively reach out about a new feature in Azure or a looming license expiration, acting as an advisor. Keep in mind that the quality of support depends on the partner’s expertise – so vet your CSP’s capabilities (enterprise-focused CSPs often have premier support arrangements with Microsoft themselves to backstop critical issues). Another advantage is that support costs are often bundled or predictable under CSP. You might avoid the hefty percentage-based support fee and instead have a flat support arrangement with the partner.
• Partner value-added services: Beyond support, CSP partners can bundle value-added services, including migration assistance, user training, license optimization reports, and dedicated account management. Because the CSP’s business model is to keep you as a recurring customer, they often invest in services to help you get the most from your licenses. Under an EA, Microsoft provides licensing briefs and some planning workshops via Software Assurance, but you may need to hire consultants or use in-house staff for many of these tasks. Some large Microsoft customers do have a Microsoft account team (account manager, cloud solution architect, etc.) who can provide guidance, but this depends on your size and strategic importance to Microsoft. A CSP partner, by contrast, will usually assign you an account manager regardless of your size, because that’s built into their service.
• Consider your support preferences: If your organization prefers having direct control and will maintain an internal center of excellence for Microsoft technologies, an EA + Microsoft support plan might align with that model. If you lean towards outsourcing support or want a one-stop-shop experience, a CSP arrangement means the same vendor that sells you the licenses also supports them. This can simplify vendor management (but ensure the partner is enterprise-ready – check their support hours, SLA, and expertise on the products you use).
• Costs of downtime and help: CFOs and CIOs should also weigh the indirect cost factors. For mission-critical systems, quick support response is essential. With an EA + Unified Support, you have direct MS support, but at a significant cost. With CSP, you might save money, and a good partner can resolve issues quickly, but it introduces an extra link (the partner works with Microsoft on escalations). In practice, many CSP partners can resolve most cloud issues independently of Microsoft, and for truly critical issues that require Microsoft intervention, everyone is in the same queue anyway. It’s wise to include support expectations in your decision matrix – e.g., if you require a 24/7 rapid response, ensure that either Microsoft or the CSP partner can deliver it (possibly at an extra cost).

Making the Choice: Key Considerations for Enterprises

Choosing between a Microsoft Enterprise Agreement and a CSP arrangement isn’t a one-size-fits-all decision.

Global enterprises should evaluate several key factors and, in some cases, consider a hybrid approach:

• Organization Size & Spending: Very large enterprises (thousands of seats) often achieve the best pricing through an EA’s volume discounts. If you’re already at Microsoft’s highest discount level (Level D) and have a stable base of users, an EA might provide unbeatable per-user pricing. However, mid-sized enterprises (with 500–2,000 users) may find that their EA discounts are modest, and a CSP partner might offer comparable pricing without the long-term commitment. If Microsoft continues to raise the minimum requirements for EAs, many mid-market companies will effectively be guided toward CSP.
• Growth and Change Trajectory: Consider your business’s 3-5 year outlook. Are you in a growth mode with potential acquisitions and a rapidly changing workforce? Or are things relatively steady? High-growth and dynamic organizations benefit from CSP’s agility – last year’s forecast won’t handcuff you. On the flip side, if you foresee little change or only upward growth that you can plan for, an EA’s locked-in pricing could serve you well (just remember, if you grow more than expected, you’ll pay for those extra licenses at the same discounted rate in EA – which is fine – but if you grow far beyond expectations, you might miss out on deeper initial discounts you could have negotiated had you known the higher number up front). For shrinking or uncertain organizations, CSP provides a safety valve to avoid paying for unused capacity.
• Cloud Adoption and Workload Mix: If your Microsoft spend is shifting toward cloud services (such as Azure infrastructure, Power Platform, and Dynamics 365), the flexibility of CSP is attractive. Azure, in particular, is a significant differentiator: under an EA, many large customers make an upfront commitment to Azure consumption (e.g., “we commit to spend $1M on Azure over 3 years”), sometimes in exchange for a discount or credits. If they under-use it, they still paid for it; if they over-use, they pay extra (possibly at less discounted rates if beyond the commit). In CSP, there’s no such commitment – you pay for Azure as you go, and your ability to optimize or turn off resources directly translates to savings. This is aligned with cloud best practices (like scaling down dev/test environments on weekends, etc.). Therefore, enterprises deeply invested in Azure’s elasticity might lean towards CSP. On the other hand, if your Microsoft usage is largely in user licenses (such as Microsoft 365) and relatively steady, EA could be suitable. It’s also possible to use EA for user licenses but buy Azure via CSP – Microsoft now permits having an EA and still using CSP for certain things like Azure if you choose. However, you’d want to carefully manage overlapping benefits or support.
• Negotiation and Vendor Management: CIOs and CFOs skilled in vendor negotiations might leverage one model against the other. Microsoft’s sales teams and LSPs know that customers have the CSP option. Some enterprises have used CSP quotes as a benchmark during EA renewal negotiations – essentially saying, “If the EA renewal isn’t favorable, we can take our business to CSP.” In some cases, Microsoft has responded with better EA pricing to retain the direct contract. Conversely, if Microsoft isn’t offering much flexibility (perhaps for a Level A customer), moving to a CSP could be a strategic choice to shake up the status quo. Leverage is key: if you have an existing EA, always explore a CSP scenario before renewing – even if just to inform your negotiation. And if you’re with CSP, periodically check EA promotions or changes that Microsoft might introduce for enterprises, to ensure you have the best arrangement.
• Hybrid approach: These models are not mutually exclusive. Some large enterprises use a mix of EA and CSP to maximize benefits. For example, you might keep core, stable licenses (such as your base Office 365 for full-time staff) under an EA to obtain volume pricing and a price lock, but procure more volatile or project-based needs via CSP, where you can drop them when they are no longer needed. This dual approach can be complex to manage, but it’s a way to have a “flexible layer” on top of a “steady layer.” Microsoft licensing rules generally allow mixing (for instance, you could have an EA for Microsoft 365 and still buy additional M365 licenses through CSP if needed). Just be careful not to double-pay or confuse tracking. Some organizations transitioning off EA implement a phased move, gradually migrating licenses to CSP as the EA term winds down, rather than implementing a sudden change.
• Contract and Legal Considerations: EAs are negotiated contracts – legal teams can insert protective clauses (such as liability, data residency, etc.) that are important for a global enterprise. CSP’s contract (the Microsoft Customer Agreement) is more standardized and often non-negotiable on terms, since it’s a shared agreement across all customers. If your enterprise has specific legal requirements (for example, certain data handling terms or liability caps), you may include these in an EA but not in a CSP MCA. However, many partners will work with you on a supplemental agreement for services they provide. It’s worth reviewing if any contractual or compliance requirements would sway you one way or the other.
• Vendor relationship and accountability: With an EA, you have a direct relationship with Microsoft. High-spend customers receive an assigned Microsoft Account Manager, potentially have more influence over product feedback, and are invited to executive briefings. In CSP, your primary relationship is with the partner; Microsoft tends to be one step removed. Some enterprises don’t mind this (the partner often advocates on your behalf to Microsoft). Others, especially very large accounts, prefer the direct line to Microsoft that an EA provides. Think about how critical that direct interaction is for your organization’s strategic plans.

In conclusion, the choice between the Microsoft Enterprise Agreement and CSP comes down to balancing predictability versus flexibility, and direct control versus partner convenience. Many global enterprises are finding CSP’s flexibility and cloud-aligned model to be a better fit in an era of rapid change and subscription services.

Others still value the EA for its predictable budgeting and potential for deeper discounts at scale. Evaluate your enterprise’s priorities: if you prize agility and ongoing optimization, CSP is compelling; if you need certainty, structured pricing, and are large enough to negotiate well, an EA could be advantageous. And remember, you can often blend approaches to get the best of both worlds.

Recommendations (Expert Tips)

1. Analyze Your Usage Patterns: Before deciding or negotiating, do a thorough audit of your current Microsoft license usage and growth projections. Stable usage favors EA’s fixed pricing, while volatile or unpredictable usage leans toward CSP’s flexibility. Align your licensing model with your business pattern to avoid overpaying.

2. Get Comparative Quotes: Even if you’re inclined to stick with your current model, get a quote or cost estimate for the alternative. For example, if you have an EA, ask a CSP partner for a pricing proposal for your licenses (and vice versa). An apples-to-apples comparison will reveal hidden costs or savings and give you leverage in negotiations with Microsoft or the partner.

3. Leverage Hybrid Licensing: Don’t be afraid to mix models to optimize value. You might negotiate an EA for core, long-term needs and use CSP on the margins for flexibility. This hybrid approach can lock in low prices for the majority of users while keeping the option to scale down where needed (e.g., assigning stable knowledge workers to EA licenses, but seasonal or project-based workers to CSP).

4. Lock in Prices Where You Can: Whichever route you choose, try to lock pricing for a term on the portions of spend you are confident about. If going EA, lock 3-year pricing on your must-have licenses. If you’re considering CSP, consider 1-year or multi-year CSP subscriptions to establish a steady base and secure better rates (and avoid the 20% monthly premium). This guards you against the frequent price increases Microsoft has been rolling out.

5. Plan for Support Costs and Needs: Factor in how you will handle support. In an EA, budget for a Microsoft support agreement or ensure your IT team can manage with minimal support. In CSP, verify what support the partner includes and their SLA. It can be beneficial to negotiate support provisions with your CSP partner – e.g., ensuring 24/7 critical support coverage if your enterprise requires it, even if it incurs a slight additional cost. Reliable support can save significant downtime costs.

6. Stay Informed on Microsoft Licensing Changes: Microsoft’s licensing programs evolve (e.g., the introduction of the New Commerce Experience changes in CSP, or potential minimum seat changes in EA). Stay connected to a licensing advisory service or your Microsoft/LSP contacts to hear about changes that could affect your agreement choice. Sometimes, Microsoft runs promotions (such as discount incentives to move from EA to CSP or vice versa) – you’ll want to take advantage of the timing if it aligns with your goals.

7. Involve Stakeholders Early: Bring in your procurement, IT, and finance stakeholders when evaluating EA vs CSP. The CIO’s team will assess technical needs and flexibility, the CFO’s team will model the financial impact, and procurement can handle negotiation strategy. A cross-functional approach ensures that all angles – technical, financial, and contractual – are considered.

8. Consider a Trial or Pilot: You don’t have to fully commit without experience. You might try putting a small subset of licenses on CSP to test the waters (e.g., a department or a new project buys through CSP while the rest of the company remains on EA). This can reveal how the partner performs and how the billing works, on a low-risk scale, before your next enterprise-wide renewal decision.

9. Negotiate Renewal Timing Carefully: If you’re currently in an EA, plan the timeline for decision-making at least 6-12 months before it expires. If switching to CSP, you’ll want to time the switch at EA expiration to avoid penalties or gaps. Microsoft often provides renewal quotes well in advance; use that time to also engage CSP partners for comparisons. If you’re in CSP and considering an EA, align it with the end of your CSP subscription term (typically annual) to ensure a smooth transition of licenses and avoid double billing.

10. Don’t Treat Licensing as Static – Reevaluate Regularly: Whichever model you choose now, re-assess it every few years. Your company’s situation might change, or Microsoft’s programs may evolve. Regularly review whether an EA or CSP (or a different agreement, such as a Microsoft Customer Agreement for Azure) is the best fit as part of your IT strategy refresh. This prevents complacency and ensures you’re continuously optimizing costs and terms.

Checklist: 5 Actions to Take

1. Document Current State: Gather an inventory of all your Microsoft licenses and cloud services. Note how many licenses are in use vs. purchased, current costs, support contracts, and when any agreements expire. This baseline will identify if you’re over-licensed and highlight your true needs.

2. Forecast and Scenario Plan: Work with HR and business units to project your user count and IT service usage for the next 1-3 years. Create best-case, worst-case, and expected scenarios. Use these to simulate costs under an EA (with its fixed commitment) versus CSP (with variable usage). For example, model a scenario where you have to cut 15% of staff – what happens in EA vs CSP? This exercise will clarify the financial risk or benefit of each model given your potential outcomes.

3. Engage Microsoft and Partners: If you have an EA, inform your Microsoft account manager that you are evaluating all options (including CSP) – this often motivates Microsoft to put forth a competitive renewal offer. Simultaneously, reach out to one or more reputable CSP partners. Request information on their services, pricing for your license set, and support offerings. Ensure you talk to partners experienced with global enterprises (able to handle multi-region billing, compliance, etc.).

4. Evaluate and Compare Offers: When you receive proposals, compare them closely. Look beyond just the raw license cost:

• What discounts is Microsoft offering in the EA (and on what conditions)?
• What are the CSP partner’s support commitments, and are there any managed services included?
• Are there any one-time transition costs (e.g., partner charging for migration or Microsoft offering deployment funds)?
• Consider intangible benefits as well, such as the value of partner guidance or, conversely, the value of direct Microsoft engagement.
  Create a clear comparison table for decision-makers, showing the total 3-year costs under each scenario and listing pros/cons.

5. Make a Decision and Plan the Transition:

Decide on the model (or mix) that best suits your enterprise’s strategy.

When renewing an EA, initiate the internal approval process early and secure the necessary resources to review the contract for any required changes. If moving to CSP, schedule the move at a logical cut-over point (e.g., EA anniversary or expiry).

Coordinate with the CSP partner to migrate licenses and ensure all administrators and users experience a seamless transition (for instance, moving Azure subscriptions from EA enrollment to CSP, or reassigning Office 365 licenses – these need planning but can be done with Microsoft’s help).

Communicate the change internally, especially to IT support teams who might need to contact the CSP for support instead of Microsoft. A well-planned transition avoids interruption and sets expectations for how licensing and support will work in the future.

By following this checklist, you’ll systematically approach the EA vs CSP decision and implementation, covering due diligence, stakeholder alignment, and execution planning for whichever route you choose.

FAQs

Q1: Which is cheaper for a large enterprise, EA or CSP?
A: It depends on your usage stability and negotiated discounts. An EA can be cheaper per license for a large enterprise if you negotiate well and fully use all licenses, thanks to volume discounts and locked pricing. CSP might have higher list prices, but you pay only for what you need. If an EA causes you to over-purchase by 15%, those savings might be erased by paying for unused capacity. So, if you can accurately predict and use what you commit to, an EA often has cost advantages for large volumes. If not, CSP’s flexibility could yield a lower effective cost. It’s wise to do a cost comparison based on your actual numbers.

Q2: Can a global enterprise use CSP for everything, or is EA necessary at our scale?
A: Yes, many large enterprises have transitioned entirely to CSP, especially as cloud services have become predominant. Microsoft has evolved CSP (and the underlying Microsoft Customer Agreement) to accommodate large customers, offering multi-year subscription options and support for large Azure workloads. The key is selecting a CSP partner capable of handling enterprise needs (global billing, compliance, technical expertise). While historically EA was the default for big organizations, it’s no longer mandatory. That said, extremely large enterprises (with tens of thousands of seats) often continue to use EA to leverage their purchasing power. Still, even these are increasingly open to CSP if the flexibility is valued.

Q3: Is it possible (and smart) to combine an EA and CSP in one organization?
A: Absolutely. Combining the two can be a strategic way to optimize costs. For example, an enterprise might maintain an EA for certain core products to secure the best price on those (and because they know a baseline of usage won’t drop), and utilize CSP for other, more variable needs or new projects. Microsoft allows this scenario; you’ll just need to manage licenses in two places and ensure you’re not double-buying. In fact, during an EA term, you can even acquire additional products via CSP if needed (common for Azure or Power BI trials, etc.). The smart approach is to use EA for what you’re sure about and CSP for the “elastic” part of your demand. Just be cautious to track everything – you don’t want compliance issues by mixing models without proper oversight.

Q4: What happens at the end of an EA if we want to switch to CSP?
A: At the end of your EA term, you have choices. If you don’t renew the EA, any perpetual licenses you have paid for are yours to keep (for on-premises software), but your cloud subscriptions will expire unless they are transitioned. To switch to CSP, you’d coordinate with your CSP partner to have your licenses re-provisioned once the EA lapses (or shortly before, with Microsoft’s help to minimize downtime). It’s essential to begin planning at least a few months before the EA’s end. Practically, you would sign up with a CSP partner, and they would assist in moving your users’ subscriptions to the new agreement. For something like Office 365, this can be as simple as a license re-assignment in the admin portal on the cut-over day. Azure is a bit more involved – you’d move your Azure subscriptions to the partner’s management (Microsoft has a process for this). There should be no loss of service if the procedure is done correctly. Many organizations execute this transition at the EA end to avoid renewal, and partners (and Microsoft) are experienced in facilitating it. Just don’t wait until the last minute: involve your chosen CSP provider and Microsoft a good 90 days or more before expiration to map out the steps.

Q5: What do we lose if we leave our EA? (Any perks or special rights?)
A: When leaving an EA, consider a few things you might lose or need to replace:

• Volume Discount Level: You lose the specific pricing you had negotiated. Your CSP pricing might be close, but if you had a very low EA unit price locked in, ensure the CSP offer is comparable.
• Software Assurance Benefits: If your EA included Software Assurance for on-premises licenses, benefits such as training vouchers, Planning Services days, or license mobility may no longer be available (although Microsoft has been phasing out or modifying some of these programs). For pure cloud subscriptions, most SA benefits are less relevant. However, if you still use on-premises servers with SA, you may need to consider how to maintain equivalent benefits (e.g., purchasing support separately or utilizing CSP offers for training).
• Unified Support alignment: Microsoft often ties the support agreement period to the EA. If you drop the EA, you can still purchase Unified Support, but Microsoft may recalculate the cost since it’s no longer anchored to an EA price tier. Alternatively, you might rely on partner support instead, as discussed.
• Direct relationship with Microsoft: As noted, you won’t have a direct licensing contract with Microsoft. Some companies fear they’ll have less influence or fewer direct insights. In reality, you can still engage with Microsoft through user groups, advisory boards, or through your partner’s advocacy. However, it represents a shift in the engagement model.
• True-up forgiveness or other negotiated clauses: In some EA negotiations, enterprises secure special concessions (like the ability to retire licenses at renewal without penalty, or special bundling). Those custom terms don’t carry over to CSP’s standardized approach. Ensure that any unique needs are addressed through the CSP partner or an adjusted process.

Most of these “losses” have an equivalent solution or may not matter to your company. Many enterprises find that what they gain in flexibility and partner support outweighs what they lose from the EA’s extras – but it’s vital to enumerate these before deciding, so you can mitigate any gaps.

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