Case Study – Microsoft EA Renewal Service Netherlands Manufacturing Enterprise – Microsoft EA Revamp Saves 22% and Future-Proofs Cloud Strategy
Background
A Dutch manufacturing conglomerate headquartered in Eindhoven, Netherlands, engaged Redress Compliance to overhaul its Microsoft Enterprise Agreement.
The company has 15,000 employees worldwide (with about 5,000 in the Netherlands) and €5 billion in annual revenue.
Its operations span industrial equipment manufacturing and IoT solutions, with factories and offices across Europe, North America, and Asia.
The Microsoft product landscape included Microsoft 365 for knowledge workers (primarily E3 licenses, with E5 for certain engineering and security teams), a significant on-premises footprint (Windows Server, SQL Server under EA with Software Assurance), and growing Azure usage for IoT data collection and analytics.
They also utilized Dynamics 365 Finance & Operations for global supply chain management and Power Platform for some custom factory-floor applications.
The existing EA was expiring in the year’s fourth quarter, and the company’s goals were to cut costs, remove unused services, and ensure the new agreement supported their plans to gradually move more workloads to the cloud without being locked into unneeded spend.
Read our guide to Microsoft EA renewals.
Challenges
The manufacturing firm faced rising costs and structural inefficiencies in its EA. Microsoft’s renewal proposal not only had price increases due to inflation and Microsoft’s global adjustments, but also assumed the company would increase its Azure commitment by 30% to support digital transformation projects.
However, the company’s leadership was cautious about overcommitting.
Some cloud pilot projects (like advanced AI for predictive maintenance) were still in the R&D phase, and it was unclear how quickly they would scale.
There was a risk of cloud overcommitment, where the business would pay for Azure capacity that it might not use if projects stalled or took a different direction.
Additionally, the EA had accumulated various extras over the years that were now “shelfware.” For example, the firm had previously purchased a bundle of Power Apps licenses for citizen development in factories, but adoption was minimal outside a single pilot plant.
There were also Microsoft 365 A5 Security add-ons (originally acquired to enhance security) that duplicated some third-party security tools the company retained – essentially overlapping capabilities.
On the Dynamics 365 side, they were paying for more module licenses than were deployed, due to an incomplete rollout in Asia.
The company also managed multiple subsidiaries with separate Microsoft agreements, and there was interest in consolidating to gain better volume discounts. Yet, Microsoft’s quote didn’t reflect any multi-affiliate benefit.
In short, the challenges were: a potentially oversized Azure commitment, multiple underused Microsoft services included in the EA, overlapping functionalities driving up cost, and a need for a simpler, more consolidated view of their licensing to leverage their global scale.
How Redress Compliance Helped
- Global Licensing Audit and Consolidation Plan: Redress Compliance performed a comprehensive audit across all the client’s regions and subsidiaries. This included tallying all Microsoft 365 licenses and their usage, evaluating Dynamics 365 utilization (which factories were using which modules), and assessing Azure consumption versus commitments in each geography. They discovered that one European division and one Asian subsidiary had separate EA contracts with Microsoft that, if pooled with the HQ’s EA, would elevate the company to a higher discount tier. Specifically, combining their license counts would move them from an EA Level B to Level C discount bracket, unlocking larger baseline discounts. Redress created a consolidation plan to bring those entities under one EA, strengthening the negotiation position. The usage analysis revealed over 1,000 Microsoft 365 licenses (mostly E3) that were either unassigned or assigned to former employees across the global organization, partly due to M&A activity and slow de-provisioning. These would be reclaimed. The Power Apps pilot had 500 licenses purchased, but only 50 in active use – confirming that 450 could be dropped. Redress also identified the overlap where the company paid for Microsoft security features as well as third-party solutions: for example, they had Microsoft Defender as part of the M365 E5 Security add-on, but also another endpoint security product. This highlighted an opportunity to eliminate redundancy either in licenses or external spend.
- Rightsizing and EA Restructuring: Using the audit data, Redress designed a leaner EA structure. For Microsoft 365, they suggested that the company maintain E5 only for the ~1,000 users who truly benefit (such as the cybersecurity team and certain senior engineers requiring advanced analytics), and keep the rest on E3 or even introduce some Microsoft 365 F3 licenses for factory floor supervisors who primarily need email/Teams. They planned to eliminate the separate A5 Security add-ons by either fully adopting Microsoft’s security (and removing the third-party tool for cost savings outside the EA scope) or dropping those add-ons if the third-party tool was kept – in either scenario, avoiding duplicate payments for similar capabilities. For Dynamics 365, Redress re-scoped the licenses to match the deployment: they removed 20% of the licenses tied to regions not yet using the system, with the intention that these could be added later when needed (or covered under a True-Up when deployments occur). On Azure, Redress took a conservative approach: rather than a 30% increase, they proposed only a 10% increase in commit with an option to flex higher if pilot projects succeeded (effectively negotiating for Azure “burst” flexibility – ability to exceed commit at the same discounted rate if needed, but not obligating that spend upfront). They also advised using Microsoft’s MCA (Microsoft Customer Agreement) for some Azure development accounts to keep them outside the rigid EA commitment until they were production-ready. The EA restructuring also combined subsidiary contracts, which not only simplified management but also qualified for higher-volume discounts due to the aggregated spend.
- Negotiation – Maximizing Discounts and Flex Terms: Redress entered negotiations armed with the consolidation strategy and a clear list of what the client did and did not need. By presenting a unified global licensing picture, they moved Microsoft to offer Level C discounts for the new EA (the client’s volume now justified it), which alone provided substantial price reduction per license. Redress also negotiated a 22% overall cost reduction from Microsoft’s initial proposal, achieved through multiple levers: Microsoft agreed to apply the higher discount rate to all licenses (including those from the formerly separate agreements), to reduce the price of Dynamics 365 modules (given the scale and the fact some modules were dropped), and to maintain pricing on Azure at a favorable level despite the lower commit. Microsoft introduced an innovative term: if the client exceeded a certain Azure usage (above the 10% growth commitment), those overages would still receive the same discount as committed spend, giving the client confidence to grow in Azure without fear of paying a premium. Redress also pressed for flexible true-up/down rights similar to other cases: Microsoft allowed mid-term adjustments for the newly consolidated EA, meaning if one business unit shrinks, the company can reduce that portion of licenses at the anniversary (this was important given potential divestitures in some divisions). Finally, they ensured the removal of unneeded products: the final contract had the Power Apps licenses and other shelfware stripped out, but with clauses that allowed the client to add them back at the negotiated price if their adoption took off – a no-cost option to enable future use without incurring additional costs upfront.
- Long-Term Modernization Roadmap: In tandem with the negotiation, Redress helped the manufacturer outline a three-year roadmap that aligns Microsoft use with the business strategy. This roadmap balanced cloud adoption with cost control: for example, as factories modernize and potentially adopt more Azure IoT services, the roadmap has triggers to re-evaluate the EA commitment at the next renewal (with data from pilots to back it). Redress guided leveraging Software Assurance benefits to transition on-prem servers to Azure smoothly (using Azure Hybrid Benefits to save up to 40% on Windows/Linux VMs in the cloud). They also established a system for the central IT team to monitor license usage across all merged entities, thereby preventing the previous fragmentation that had led to thousands of unused licenses. The roadmap treated Microsoft licensing as a component of the company’s digital transformation plan – ensuring that as the company adopts advanced analytics, IoT, or possibly AI tools, it does so by first using small-scale subscriptions and only incorporates them into the EA once value is proven (thus maintaining cost discipline).
Outcome and Impact
- Significant Cost Savings (22% and Volume Discounts): The restructured EA resulted in a 22% cost savings compared to Microsoft’s original renewal quote. In tangible terms, the company will spend approximately €25 million instead of €32 million over the next three years on Microsoft, resulting in a savings of €7 million. Part of this came from the immediate reduction of unused licenses (elimination of wasteful spending), and part from improved discounting due to consolidated purchasing power. Achieving a higher discount level across thousands of licenses resulted in lower unit costs for Microsoft 365 and Dynamics 365 than the company had ever experienced before. Additionally, rationalizing the product mix (paying only for what’s needed) means each euro is now tied to a business outcome. The CFO remarked that the Microsoft budget line, which had previously been creeping up every year, is now actually set to be lower next year than it was last year – a rare win in a time of rising software costs.
- Eliminated Shelfware & Overlap: By cutting out the 1,000+ unused M365 licenses and 450 idle Power Apps, plus trimming excess Dynamics seats, the EA is far leaner. There’s virtually no shelfware left in the agreement from day one. Any future additions will be carefully vetted. Moreover, the overlap in security tools was addressed: the company decided to fully adopt Microsoft’s security suite for endpoint protection and phase out the third-party one, capitalizing on what they were already paying for in E5. This will save additional budget outside the EA and simplify operations. If they had chosen the opposite (keeping the third-party and dropping Microsoft’s add-on), the effect on the EA would have been similar in terms of cost. Either way, they are no longer double-paying for the same function. This kind of cleanup not only reduces cost but also complexity – IT admins now have fewer redundant systems to manage.
- Cloud Commit on the Right Terms: The Azure component of the new EA is rightsized and future-proofed. The company isn’t overcommitted, yet it has the freedom to grow. If their IoT projects take off and Azure usage needs to double, they can do so and still enjoy the pre-negotiated discounts on that growth, thanks to the burst capacity clause Redress negotiated. Conversely, if some projects remain on-premises or migrate to another platform, the company isn’t stuck paying for unused Azure. This flexibility significantly reduces the financial risk associated with their cloud strategy. Additionally, by using MCA for certain dev/test workloads as recommended, they keep those outside the EA commitment until they’re sure of long-term usage. This approach effectively combines EA and non-EA cloud buying to maximize value, a feature that Microsoft representatives typically don’t highlight, but Redress guided the client to utilize.
- Simplified Management and Governance: Consolidating multiple agreements into a single one and maintaining a clear global view of licensing has significantly simplified license management. The IT procurement team now receives a single, consolidated report from Microsoft, whereas previously they had to manage three separate ones. License allocations can be shared more easily across the organization – for example, if one country needs more and another needs less, they can balance internally rather than overpurchasing. This “shared pool” approach, coupled with the internal monitoring processes Redress helped establish, means the company is far less likely to see licenses slipping through the cracks. It also positioned them well for compliance – no region is at risk of being under-licensed while another has excess, as the central team oversees it. Governance-wise, the company has adopted a continuous improvement mindset: they plan to review Microsoft usage at least twice a year at a governance board meeting to identify any new shelfware or opportunities for optimization, ensuring they sustain the benefits achieved.
- Strategic Cloud and License Alignment: The new EA is aligned with the company’s strategic initiatives. As manufacturing transitions to Industry 4.0, IoT, and AI, the Microsoft agreement is poised to support these advancements (through Azure flexibility and available add-ons) without forcing premature adoption. The company has essentially bought itself breathing room to innovate on its terms. Furthermore, the cost savings and improved terms have freed budget that the company can invest in other areas, such as an upcoming ERP upgrade or R&D. Redress’s involvement helped the client see Microsoft not just as a vendor to appease, but as a platform to leverage competitively – they will only invest more if it makes business sense. This shift could lead to better ROI on technology investments overall.
Client Quote
“Thanks to Redress, our Microsoft agreements worldwide are finally consolidated and under control. We were able to remove the fluff – all those extra licenses and services we weren’t using – and end up with a deal that truly fits our business. Saving 22% on such a critical spend is huge for us, but just as important is the flexibility we gained. We can ramp up our cloud projects when we’re ready, without fear of penalties or wasted spend. Redress’s independent guidance was key; they challenged Microsoft’s assumptions and fought for an agreement that serves our interests first. We feel prepared for the future with this new EA.” – CIO, Netherlands Manufacturing Enterprise.
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