Steps Involved in Renewing a Microsoft Enterprise Agreement (EA)
Renewing a Microsoft Enterprise Agreement (EA) requires detailed preparation, strategic foresight, internal alignment, and effective negotiation. Successfully navigating this renewal ensures optimal licensing arrangements, cost efficiency, and long-term strategic benefits.
Below is an expanded guide outlining crucial steps for a seamless renewal process.
Read our Microsoft EA renewal FAQs.
Inventory and Usage Review
Conducting a thorough inventory and usage review is foundational:
- Audit Current Licenses: Precisely document every Microsoft license, subscription, and associated services under your EA.
- Detailed Usage Analysis: Evaluate how extensively each product or service is utilized to identify redundancies or underutilized resources.
- Identify Gaps: Note any discrepancies or potential compliance risks from licensing shortages or excesses.
Example:
A medium-sized enterprise subscribing to 2,000 Office 365 licenses discovered through detailed usage analysis that only 1,650 licenses were actively used. They optimized their renewal by not renewing 350 licenses, generating significant annual cost savings.
Needs Assessment
Assessing future licensing needs aligns your renewal strategically with your business trajectory:
- Forecast Organizational Growth: Predict increases or decreases in staff headcount and technological needs over the next three years.
- Product and Service Adoption: Analyze if new Microsoft products, such as Teams Phone or expanded Azure functionalities, align with your organization’s future direction.
- Technology Transformation: Prepare for shifts toward cloud-first strategies, remote work expansion, and any planned technology modernization efforts.
- Risk Mitigation: Consider cybersecurity upgrades or regulatory compliance needs driving specific software adoptions.
Example:
A rapidly expanding software firm anticipated a 30% annual growth in Azure cloud service consumption and strategically leveraged this information to secure preferential volume discounts during negotiations.’
Read When Should We Start Preparing for a Microsoft EA Renewal.
Stakeholder Alignment
Aligning internal stakeholders ensures cohesive decision-making and streamlined negotiations:
- Identify Relevant Stakeholders: Engage IT teams, procurement departments, finance personnel, and operational executives early in the process.
- Establish Consensus: Facilitate cross-departmental meetings to establish a unified vision and negotiation stance, thus avoiding internal conflicts.
- Clarify Objectives: Document stakeholder-agreed priorities to guide the negotiation approach and reduce ambiguity.
Example:
A multinational financial institution involved stakeholders early, achieving clear alignment, which enabled expedited negotiation processes and significantly strengthened their bargaining position with Microsoft.
Engage Microsoft or Licensing Solution Partner (LSP)
Initiating dialogue with Microsoft or your Licensing Solution Partner (LSP) well ahead of the renewal is essential:
- Early Outreach: Begin discussions 6-12 months before renewal to provide ample negotiation room.
- Preliminary Proposals: Request preliminary proposals and pricing scenarios to gauge initial Microsoft offerings.
- Approval and Discounting: Early engagement allows Microsoft to initiate internal processes required for obtaining necessary approvals and deeper discounts.
Example:
A large healthcare network contacted Microsoft one year before renewal, securing early promotional discounts and significantly improved terms, facilitating budget planning.
Explore Optimization Opportunities
Before renewal, actively seek optimization opportunities to manage costs:
- License True-down: Identify and remove unused or redundant licenses from your EA to reduce unnecessary expenditure.
- Cost-effective Licensing Models: Evaluate alternative licensing tiers or bundles, potentially shifting some users to more cost-effective licensing models or cloud-based subscriptions.
- Product Rationalization: Determine if certain products no longer serve your strategic goals and should be discontinued.
Example:
An international retail chain optimized by downgrading premium licenses and removing redundant Dynamics 365 subscriptions, cutting their licensing costs by nearly 20%.
Benchmark and Set Negotiation Targets
Effective benchmarking sets realistic, strategic negotiation objectives:
- Market Analysis: Research comparable organizations to determine typical discounts, contract terms, and renewal outcomes.
- Set Clear Targets: Establish precise targets, such as specific cost reductions, inclusion of particular services, or maximum per-user pricing thresholds.
- Leverage Insights: Use benchmarking data as leverage during negotiations, demonstrating knowledge of competitive market standards.
Example:
Using comprehensive benchmarking data, an industrial manufacturer aimed for and achieved a 15% cost reduction and inclusion of Teams Phone at a strategically predefined price point.
Negotiation
The negotiation stage is pivotal and requires strategic preparedness and robust stakeholder backing.
- Leverage Analytical Insights: Utilize detailed usage analytics and future forecasts to strengthen your negotiation positions.
- Negotiate Key Terms: Discuss pricing, flexible true-up conditions, bundled offerings, and payment terms.
- Counteroffers and Flexibility: Be prepared for iterative negotiation stages, proactively offering counter proposals and exploring creative solutions beneficial to your organization.
Example:
A global financial services company leveraged comprehensive usage and growth analytics to negotiate a tailored pricing structure and flexible true-up terms that were significantly advantageous for its future scaling efforts.
Finalize the Agreement
Finalizing the renewal requires careful attention to documentation accuracy and timing:
- Comprehensive Documentation Review: Thoroughly check all negotiated terms to ensure accuracy in product listings, pricing agreements, and service entitlements.
- Legal and Compliance Scrutiny: Ensure your legal team precisely captures, verifies, and vets all legal aspects and compliance obligations.
- Timely Execution: Promptly complete all necessary internal approvals to avoid coverage lapses between contract periods.
Example:
A logistics enterprise’s meticulous document review uncovered pricing and service terms errors, allowing correction before finalizing the renewal, thus preventing significant unexpected expenses.
Read How to Determine What to Renew or Drop in Your Microsoft EA Renewal.
Post-Renewal Communication
Effective internal communication post-renewal ensures smooth transitions and maximum utilization:
- Stakeholder Notifications: Immediately inform stakeholders of license adjustments, enabling quick adaptation to new deployment standards.
- End-user Engagement: Communicate any changes in software access or capabilities to ensure a smooth transition and minimal operational disruption.
- Systems Updates: Promptly update internal license management systems to accurately reflect the renewed entitlements, ensuring continuous compliance.
Example:
A technology firm clearly and promptly communicated new Microsoft Teams functionalities to its employees, resulting in swift user adoption and measurable productivity gains.
Conclusion
Following these expanded and detailed steps ensures your Microsoft EA renewal process is strategically beneficial, cost-effective, and seamlessly aligned with your organization’s broader objectives.
This proactive approach leads to significant savings, robust license management, and enhanced operational efficiencies.
