Case Study – Microsoft EA Renewal Service U.S. Logistics Firm – Microsoft EA Optimization Saves 15% and Enables Seasonal License Flexibility
Background
A national logistics and supply chain management company based in Chicago, IL, with 5,500 employees, engaged Redress Compliance ahead of its Microsoft EA renewal. The company (annual revenue ~$2 billion) manages warehousing, transportation, and delivery services across the U.S. Its IT setup relies on Microsoft 365 for office productivity and communication – a mix of E3 licenses for corporate staff and F3 (Frontline) licenses for warehouse and driver personnel.
They also utilize Azure for an IoT tracking system and data analytics on delivery routes, although much of their core logistics software is a third-party platform hosted in a private data center (in a hybrid environment). The EA in place was due to auto-renew in four months, covering Microsoft 365, some Power BI licenses, and a moderate Azure consumption commitment.
Read our guide to Microsoft EA renewals.
Challenges
The logistics firm faced cost and usage misalignment issues common in rapidly changing businesses. One major challenge was seasonal workforce fluctuation: during holiday peak season, they onboard hundreds of temporary workers, while in off-peak times, license usage drops.
However, their EA treated licensing statically – they had to maintain a high baseline of licenses year-round, effectively paying for maximum headcount even when it was not needed.
This resulted in shelfware during off-season months. Microsoft’s standard true-up model allowed adding licenses when usage grew but offered no way to scale down mid-term.
The company anticipated another push from Microsoft to increase their Azure commitment and possibly to upgrade their remaining E3 users to E5 (for advanced security and voice features in Teams), despite those being unnecessary for their operations.
Additionally, the firm had limited visibility into which licenses were truly being used. Some frontline workers had historically been given full E3 licenses (for example, warehouse supervisors with shared computers), even though a cheaper F3 license or a shared device license would have been sufficient.
The EA also included bundles, such as Power Platform and audio conferencing SKUs, that were underutilized.
Cost escalation was a concern – the finance team projected that, without intervention, the 3-year renewal could cost 15-20% more than the previous term due to increased license counts and price adjustments.
The key challenges are eliminating wasted spend on unused/off-season licenses, resisting unwarranted upsells, and obtaining flexibility to adjust licenses in line with the business cycle.
How Redress Compliance Helped
- Deep Usage and License Audit: Redress Compliance worked with the company’s IT asset management team to gather detailed usage data. They analyzed Microsoft 365 login and activity reports to identify licenses that hadn’t been used in months – many corresponded to accounts of seasonal staff who were no longer with the company. They found that, on average, about 800 licenses were idle during off-peak periods, representing pure shelfware for half the year. The audit also revealed instances of license misallocation: e.g., dozens of warehouse staff had E3 licenses even though their work did not require the full Office suite (these users primarily needed email and occasional Teams access). Conversely, a few power users lacked access to Power BI Pro, which they needed – indicating a mismatch where resources could be reallocated at no net cost. This comprehensive review highlighted where the EA was overshooting actual needs.
- Optimized Licensing Plan (Right-Sizing): Using the audit insights, Redress designed an optimized licensing plan that right-sized the solution. First, they recommended standardizing frontline workers on Microsoft F3 licenses (which are lower-cost and tailored for firstline workers) instead of E3. This change would still provide essential email, Teams communication, and access to SharePoint, but at a fraction of the cost of E3. Next, they planned the license counts to reflect seasonal needs, maintaining a core base of licenses for full-time staff and leveraging short-term licenses for peak periods. Redress introduced the idea of leveraging the CSP program for temporary workers – for example, adding licenses via CSP for 3-4 months during the holidays, then removing them, rather than over-committing in the EA. They also identified unnecessary product bundles in the previous EA (like an enterprise-wide Power Automate license) that could be removed, and instead suggested a “mix and match” approach: keep essential services in the EA for volume discount, but handle niche needs (like a handful of Power BI Pro or Project Online licenses) separately to avoid inflating the EA’s scope.
- Negotiation for Flexible Terms: Redress Compliance led the negotiation with Microsoft, focusing on flexibility and cost. They achieved a 15% reduction in Microsoft 365 unit pricing through benchmarking and negotiating discounts, citing that deals for companies of similar size often fall within that range. In parallel, Redress negotiated a novel term for flexibility: Microsoft agreed to classify a portion of the licenses as an “Enterprise Subscription” rather than a perpetual EA, allowing the company to true-down those licenses at the anniversary. In practice, this meant the client could reduce up to 500 licenses in years 2 and 3 if not needed – a critical concession that addressed their seasonal workforce issue. For Azure, Redress ensured the company did not increase its commitment unwisely. Instead, they kept a modest consumption commitment with the right to use pay-as-you-go for any overage. This protected the client from paying for unused Azure capacity while still enabling growth if their new IoT analytics took off.
- Long-Term License Management Strategy: Beyond the immediate negotiation, Redress helped the client implement a strategy for ongoing license management. They set up quarterly internal reviews of license usage to continually re-harvest any unused licenses (for example, promptly reassign or remove licenses when an employee leaves or a temp contract ends). They also provided training to procurement and IT managers on leveraging Microsoft’s CSP and new Microsoft New Commerce Experience (NCE) subscriptions to achieve agility, allowing the company to dynamically add or drop short-term licenses outside the EA without penalty. This proactive management means the company will be prepared for future true-ups and the next renewal, with data in hand to justify every license – avoiding last-minute scrambles.
Outcome and Impact
- Cost Savings Realized: The optimized EA and negotiated discounts resulted in 15% direct cost savings on Microsoft 365 licensing costs, amounting to approximately $1.2 million saved over three years. Microsoft’s initial renewal offer was $8 million; Redress brought the committed spend down to around $6.8 million. Additionally, by offloading seasonal licenses to flexible arrangements, the company avoids an estimated $200,000 per year in what would have been wasted spend on unused off-season licenses. These savings improved the IT budget immediately and created ongoing savings during each low season.
- Seasonal Flexibility: This engagement significantly altered how the logistics firm manages Microsoft licenses about its business cycle. The inclusion of EA Subscription licenses (with true-down rights) and the use of CSP for peak periods means the company is no longer paying for 500+ extra licenses year-round that it only needs during a few months. In the first year after renewal, they executed a post-holiday true-down, removing 450 unnecessary licenses – an unprecedented ability under their prior static EA. When the next peak arrives, they will add licenses on a short-term basis and only pay for those months. This flexibility closely aligns IT costs with operational reality, essentially turning licensing into a scalable utility rather than a fixed cost.
- Right-Sized, Efficient Licensing: The new license allocation ensures each employee has the appropriate tools without overkill. By relocating approximately 300 warehouse and driver personnel from E3 to F3 licenses, the company significantly reduced costs while still meeting the needs of those users. Management now has clear insight into license usage; for example, if a Power BI Pro license isn’t used in 90 days, it can be reassigned to someone who needs it. The EA no longer carries broad bundles that nobody uses – everything in the agreement has a purpose and an owner. This operational efficiency in license management also reduces compliance risks and overhead, since there’s less bloat to keep track of.
- Strategic Use of the Microsoft Ecosystem: By resisting Microsoft’s push for an all-E5 environment and a significant Azure commitment, the client maintained control over its IT strategy. They invested in what delivered value (collaboration tools for all, security for those who need it, cloud resources where sensible) and avoided shiny extras that didn’t fit their business. With Redress’s help, the logistics firm established a more vendor-agnostic stance – they signaled to Microsoft that they require contracts on their terms. For example, rather than accepting a costly enterprise-wide Teams Phone plan that Microsoft pitched, they opted to pilot it at one distribution center first. This careful, needs-driven adoption ensures that any future expansions of Microsoft services will be justified by ROI. The company is now in a strong position to manage its Microsoft investments proactively, rather than reactively renewing whatever is in place.
Client Quote
“Our business isn’t static, and now our Microsoft agreement isn’t either. Redress Compliance helped us break free from the rigid EA model. They found a way to accommodate our seasonal staffing in our licensing – something we didn’t even realize was possible. We achieved about 15% savings, but more importantly, we’re no longer wasting money on unused licenses. Redress’s team truly put our interests first, pushing back on Microsoft’s upsells and securing terms that allowed us to adjust our usage as needed. It feels like we finally have control over our Microsoft spend.” – CIO, U.S. Logistics Firm
Call-to-Action
Does your organization have fluctuating needs or feel stuck with an inflexible Microsoft contract? Reach out to Redress Compliance for a free Microsoft EA Optimization Assessment. We’ll help you find the wiggle room in your EA – whether it’s cost savings, flexible terms, or a smarter license mix – so your Microsoft investment drives business value year-round.
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