Case Study – Microsoft EA Renewal Service Spanish Retail Group – Microsoft EA Right-Sizing Saves 20% (€1M) and Boosts Frontline Productivity
Background
A major Spanish retail group headquartered in Madrid, with 8,000 employees and €2.5 billion in annual revenue, enlisted Redress Compliance to optimize its Microsoft Enterprise Agreement.
The company operates a chain of supermarkets and retail stores across Spain and Southern Europe, as well as an online marketplace.
Their Microsoft environment before the project was mixed: corporate office staff (about 1,500 users) were on Microsoft 365 E3, store managers on E3 as well, and a large number of frontline store employees (cashiers, stock clerks, etc.) on a combination of Microsoft 365 F3 and some had been given E1 licenses.
They also used Azure for hosting parts of their e-commerce platform and data analytics for their supply chain, although much of their core retail systems were on-premises or in a separate SaaS.
The EA included these licenses, as well as some Power BI usage for corporate analysts. The EA was up for renewal in a few months, and with razor-thin retail margins, the group was eager to cut any unnecessary IT costs while empowering its frontline workforce with the right tools.
They also wanted any new agreement to allow them to modernize their stores with cloud solutions (like mobile apps for inventory) without overspending.
Read our guide to Microsoft EA renewals.
Challenges
The retail group’s challenges centered around license misallocation and cost inefficiencies for frontline workers.
In the previous EA, many store-based employees were over-licensed. For example, a significant number had been assigned full E3 licenses, which include the Office desktop apps and other features they rarely used on the store floor.
These employees primarily use shared devices or kiosks to check email or corporate communications, tasks that a lightweight license would cover.
Conversely, some of their actual needs (like a simple mobile app for scheduling or inventory lookup) were not being met by Microsoft tools because the company hadn’t enabled certain services, partly to avoid additional licensing costs.
There was also shelfware: a notable number of Office 365 services were barely touched. For instance, they had organization-wide Yammer and SharePoint licenses as part of E3, but adoption was low in the stores – these were features the retail staff didn’t have time to use.
Microsoft’s renewal quote didn’t address these issues; in fact, it assumed an upgrade of all E3 users to E5 (to “unlock advanced security and analytics”) and pushed for more Power BI Pro licenses for broader analytics use.
The client saw this as misaligned with where value was generated in their business. Another challenge was the EA’s lack of flexibility for the retail footprint: store count and staffing levels could change with new store openings or seasonal peaks, but the EA locked them into a fixed number of licenses per year.
They had acquired a smaller competitor the previous year, which added 500 employees, and those licenses were folded into the EA at renewal; however, if certain stores were to close or be sold, they worried they’d still pay for those licenses until the term ended.
In short, the challenges included overspending on high-tier licenses for low-tech roles, underutilization of many features, a one-size EA that didn’t reflect the mix of corporate versus frontline needs, and a lack of ability to flex down if the retail footprint changed.
How Redress Compliance Helped
- Workforce License Profiling: Redress Compliance started by profiling the workforce’s needs. They separated users into categories: corporate HQ staff, store managers, and frontline store employees. For each category, they analyzed which Microsoft services those users used or needed. Using Microsoft 365 usage data and employee role information, Redress found that over 600 frontline employees had E3 licenses but used email and Teams only occasionally – a clear indication of over-licensing. Many of these could be served with Microsoft 365 F3 (which costs a fraction of E3). They also identified that some corporate users did benefit from higher features (a few analysts and IT admins truly needed E5 or Power BI Pro), but this was a small subset.Additionally, approximately 300 inactive accounts were identified (resulting from employee turnover and the acquisition of stores) that were still assigned licenses. Redress quantified the waste: those inactive and over-provisioned E3 licenses were costing hundreds of thousands of euros annually in shelfware. They also noted that the company had not been using Microsoft’s scheduling tool (Shifts in Teams), which is included even in F3 licenses – an opportunity to improve frontline productivity without extra cost, once they had the right licensing mix.
- Right-Sizing and License Mix Optimization: Redress proposed a new license allocation that aligns costs with usage. Central to this was moving a large portion of users to Frontline (F3) licenses. Specifically, approximately 2,000 store employees who didn’t require desktop Office apps or advanced features would transition from E3/E1 to F3. This change would maintain their access to email via Outlook web/mobile, Teams for messaging, and allow use of SharePoint for company info – essentially all they needed – but at roughly a third of the cost of E3. Store managers (approximately 500 people) would retain E3 because they utilized more Office applications and reporting tools. Corporate staff largely remained on E3, except for around 100 power users in analytics and IT who would upgrade to E5 or receive Power BI Pro licenses – ensuring the company wasn’t sacrificing capabilities where they mattered (e.g., the security team receives E5 for advanced threat protection, and the data team receives the necessary analytics). This redistribution meant that the overall license count didn’t change drastically, but the cost per user decreased significantly on average. Redress also cleaned up the inactive accounts – reclaiming those 300 licenses outright. For seasonal flexibility, they suggested using some “add-on” licenses via CSP for the holiday period if needed, rather than over-licensing in the EA. For instance, if they typically hire 200 temporary holiday workers, they could use month-to-month F3 subscriptions for two months instead of having 200 extra annual licenses sitting idle after January.
- Negotiating Cost and Flexibility: Armed with the new plan, Redress negotiated with Microsoft to adjust the EA accordingly. Microsoft initially resisted downgrading so many users to F3, but Redress demonstrated that these users were not utilizing the higher-tier features. They negotiated pricing that recognized the volume of F3 licenses, securing a better discount tier for F3 given the large count. They also secured a 20% overall cost reduction, which for this client translated to about €1 million over three years, considering license savings and additional Microsoft-offered retail sector incentives. One important term Redress got was the ability to flex 10% of the F3/F1 licenses annually – meaning the retailer could decrease or increase that portion of licenses at the yearly anniversary to account for store openings/closings or seasonal workforce changes. This is somewhat atypical for Microsoft, but by citing the merger scenario and possible store churn, Redress made the case that the standard EA rigidity didn’t fit a retail model. Microsoft agreed to a limited flexibility clause. Additionally, Microsoft dropped its push for immediate E5 upgrades across the board, and instead offered a discounted promo for a small number of E5 licenses (should the client choose to trial them in the future). This allowed the client to consider adopting E5 features on their timeline and only for specific roles, rather than a costly blanket upsell.
- Empowering Frontline with Tools (at No Extra Cost): Beyond the licensing negotiation, Redress advised the retailer on how to maximize the use of Microsoft tools for their frontline staff. Since F3 includes Teams and the Shifts app, Redress suggested rolling that out to improve scheduling and communication with store employees, replacing some manual processes. They also noted that with SharePoint and OneDrive available even on F3, the company could distribute training materials and updates to store staff more easily. In essence, the optimized EA not only saved money but also unlocked capabilities the retailer hadn’t utilized before. Redress helped create a rollout plan to drive adoption of these included tools, aiming to increase the ROI of the Microsoft investment. They set key metrics, such as more frequent Teams engagement from stores and the use of Power BI reports at regional levels, to ensure that cost savings didn’t come at the expense of innovation – in fact, it went hand-in-hand with better utilization of relevant technology.
Outcome and Impact
- 20% Cost Savings (≈€1M): The rebalanced license strategy and negotiated discounts resulted in a 20% reduction in Microsoft EA costs, amounting to about €1 million saved over three years. The annual Microsoft spend for the group decreased significantly, while still providing all employees with the necessary tools. This saving was critical in a low-margin retail environment – effectively, it was equivalent to avoiding the cost of several new store openings’ IT budgets. The CFO appreciated that these savings could directly bolster the company’s bottom line or be reinvested in customer-facing technology.
- Optimal License Fit for Every Role: Each category of worker now has the right Microsoft tools for their job at the right price point. Over 2,000 frontline employees shifted to F3 licenses without any loss of productivity; many didn’t even notice a change, except perhaps a new login process for Office web apps. Store managers retained E3 for full Office capability, ensuring store operations and reporting remained smooth. Power users in HQ gained E5 or required add-ons, which enhanced their capabilities (for example, security staff now have access to advanced threat analytics, and data analysts have expanded their use of Power BI). The key result is zero waste: the company is no longer paying enterprise software rates for someone who only checks email a few times a week. This right-sizing exercise is a textbook example of aligning license levels to user needs. And because it was based on thorough data analysis, it was accomplished without disrupting any workflows or compromising on necessary features.
- Improved Frontline Productivity and Morale: By extending appropriate Microsoft 365 access to all employees (even in a lighter form for frontline), the company has improved communication and inclusion. Before, some frontline staff didn’t have digital access to corporate communications or had to share generic logins. Now each has their own account under F3, enabling them to use the Teams-based scheduling, receive announcements, and provide feedback easily. Early feedback from pilot stores showed that using the Teams Shifts app for scheduling reduced confusion and missed shifts, and employees felt more connected. While cost savings were achieved, the company also experienced a positive impact on frontline operations. Essentially, they cut costs while delivering more value to end users – a win-win that was made possible by leveraging features already paid for within F3. This contributes to improved retail execution (e.g., faster restocks, more engaged employees), which can lead to enhanced customer service.
- Flexibility for Business Changes: The inclusion of the 10% flex clause means the retailer is less worried about the EA becoming an anchor if the business changes. If next year they automate some functions and need fewer people in stores, they can reduce licenses accordingly. Or if they expand into a new region and hire more staff, they can add licenses with predictable costs. This flexibility is valuable given the evolving nature of retail. Combined with the plan to use short-term CSP licenses for extreme seasonal peaks, the company has a mechanism to avoid paying year-round for something only needed briefly. Financially, this agility prevents future shelfware and ensures that Microsoft’s spending can correlate with the actual workforce size.
- Strategic Alignment and Vendor Relations: Microsoft now understands that this client demands value alignment, not just upsells. The retailer has set a precedent that it will invest in Microsoft technology where it makes sense (for instance, it has agreed to consider things like Teams Voice or more Power BI in the future for HQ), but will not simply upgrade everyone blindly. This stance, backed by Redress’s negotiation, put the client in control of the roadmap. The EA now supports the company’s strategic focus on efficiency and customer experience, rather than draining resources from it. The money saved essentially funded other digital initiatives, such as improvements to their e-commerce platform, which might not have been budgeted for otherwise. In summary, the optimized EA has become an enabler for the retailer’s broader strategy, rather than a mere expense.
Client Quote
“For the first time, our Microsoft licensing aligns perfectly with our business – and it’s saving us a fortune. Redress Compliance revealed that we were overspending in areas that added no value, particularly in our stores. By right-sizing our licenses, we reduced costs by approximately 20% (€1M) and enhanced collaboration among our staff using Microsoft 365. It’s rare to save money and enhance productivity at the same time, but Redress made it possible. They truly acted in our best interest, pushing back on Microsoft’s upsell and tailoring the agreement to fit our retail operations. We feel we have a partner in Redress that helped us get the best deal without compromise.” – IT Director, Spanish Retail Group
Call-to-Action
Retail and hospitality businesses: Are you paying full price for half-used software? Contact Redress Compliance for a free Microsoft EA Optimization Assessment. Our experts will help you right-size your Microsoft investment – ensuring you only pay for what you need and finding flexible solutions for your unique workforce. Empower your frontline and protect your bottom line with Redress Compliance at your side.
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