How Redress Compliance helped a 15,000-employee U.S. manufacturer achieve a 20% cost reduction on its Microsoft EA renewal, eliminate 1,200 unused licences, consolidate global licensing under one agreement, and secure annual true-down flexibility.
A large U.S. manufacturing company based in Chicago, with 15,000 employees and operations across North America, Europe, and Asia, was approaching its Microsoft Enterprise Agreement renewal. The industrial manufacturer’s IT environment included a mix of on-premises systems for plant operations and an increasing use of cloud services.
E3 for all office staff, E5 for R&D and engineering teams using advanced analytics
Licences with Software Assurance for data centres across multiple plants
Moderate commitment supporting IoT telemetry and supply chain analytics
The EA was set to expire in 6 months. The company sought to optimise licensing costs and better accommodate its global operations, which had undergone workforce and IT shifts — including an acquisition and a divestiture — during the past term.
An acquisition and divestiture during the last term left the EA with 1,200+ unused M365 seats tied to the divested unit. Microsoft’s initial renewal quote not only maintained those excess licences but added a 5% price increase citing “annual adjustments.”
Microsoft was pushing an upgrade of engineering departments to full M365 E5 and Power BI Pro for all users (bundled into a suite) — moves that would significantly increase costs without clear ROI for most users.
European and Asian affiliates were purchasing Microsoft services outside the EA, creating fragmented licensing with poor visibility into usage and spending. Microsoft’s rigid EA structure, organised by legal entity and country, made consolidation challenging.
Manufacturing is cyclical. During downturns, the firm needed the ability to scale down user counts or Azure usage — something the current EA didn’t support. Standard true-up-only terms and lack of licence portability across regions felt misaligned with dynamic operations.
Redress conducted a thorough inventory across all global locations. They identified roughly 1,200 unassigned or former-employee M365 E3 licences in the U.S. (a result of the divestiture and staff turnover). In Europe, a subsidiary was paying for a separate Office 365 subscription outside the EA. These optimisation opportunities meant avoiding payment for up to 10% of total M365 seats in the renewal.
Redress analysed usage patterns and found that only the core product design team actively used E5 advanced analytics features — many R&D users were satisfied with E3 plus occasional Power BI access. They also discovered excess SQL Server core licences from a previous overestimation.
Reduced E5 to 300 critical users; moved remaining to E3 with à la carte add-ons
Reduced excess core licences to match actual deployment
Leveraged existing Windows Server SA licences to reduce Azure VM costs
For E3 vs. E5 decision frameworks, see Navigating Microsoft Negotiation Strategies.
Redress worked with procurement and legal to consolidate the European subsidiary’s subscriptions into the main EA as an affiliate enrolment. They also negotiated language permitting licence transfers between regions (within affiliates) without Microsoft’s prior approval, as long as total counts remained within contracted amounts.
Using industry benchmarks from comparable manufacturing EAs, Redress challenged Microsoft’s pricing. They countered the 5% increase by demonstrating the risk of the client shifting workloads to alternative cloud providers. Microsoft conceded to a deeper discount on M365 licences and a more reasonable Azure pricing tier.
Redress secured provisions allowing 5% annual true-down of M365 user counts if business conditions changed — a rare concession in standard EAs. They also negotiated an Azure “flex pool”: unused Azure commitment could roll over or be applied to other Microsoft cloud services (Power Platform), rather than being forfeited. These terms aligned the contract with the cyclical nature of manufacturing.
Several million dollars in savings over the 3-year term. Driven by scrapping 1,200 excess licences, optimising the E5/E3 mix, and securing additional discount percentages. The annual Microsoft budget decreased despite Microsoft’s original push for an increase.
All major Microsoft subscriptions across U.S. and Europe under one agreement. Single pane of glass for licence management. Better visibility, simplified compliance, and the ability to move licences where needed.
5% annual true-down on M365 seats. Azure flex pool with rollover capability. The contract adapts to industry ups and downs rather than forcing the company to pay for unused capacity during slow periods.
E5 limited to 300 power users. E3 for the workforce with à la carte add-ons. Azure Hybrid Benefit leveraged to eliminate double-payment for Windows in Azure. Ongoing licence review processes established.
“We thought Microsoft had all the power in these negotiations — until we brought in Redress. They demonstrated that, with the right data and strategy, we could set the terms. They uncovered that we were oversubscribed and overspending worldwide. We negotiated a new EA that cut our costs by 20% and simplified everything. Redress even helped us secure terms to adjust for our industry’s ups and downs, which is practically unheard of with Microsoft.”
— VP of IT Procurement, U.S. Manufacturing Company
It’s rare but achievable with proper leverage. Standard Microsoft EAs only allow true-ups (increases) at anniversary dates. However, for large customers with demonstrated business cyclicality, Microsoft will sometimes agree to a limited true-down (typically 5–10% per anniversary). The key is presenting credible data on business variability and making clear that without this flexibility, you may choose a different licensing model or vendor entirely.
Microsoft offers “affiliate enrolment” under an EA, allowing subsidiaries in different countries to be included under the parent agreement. This requires negotiation to ensure pricing is consistent, licences can be transferred between regions, and local compliance requirements are met. In this case, Redress rolled the European subsidiary into the main EA and negotiated language permitting licence transfers between affiliates without Microsoft’s prior approval.
E5 adds advanced security, compliance, analytics (Power BI Pro), and phone system capabilities over E3. It’s typically worth the premium only for users who actively use multiple E5-exclusive features. For most users, E3 with selective add-ons (e.g., Power BI Pro at ~$10/user/month) is more cost-effective. In this case, Redress found only 300 of 15,000 users truly needed E5 capabilities — the rest were better served by E3 with targeted add-ons.
Azure Hybrid Benefit allows you to use existing Windows Server or SQL Server licences with active Software Assurance to run workloads on Azure at reduced rates. Essentially, you bring your own licence rather than paying for a new Azure licence. This can save 40–55% on Azure VMs compared to pay-as-you-go pricing. Many organisations underutilise this benefit — as in this case, where Redress identified the opportunity to apply it more aggressively across the firm’s Azure estate.
Standard EAs don’t allow mid-term reductions for divestitures. However, at renewal, you have full negotiating power to right-size. Redress recommends conducting a comprehensive licence audit 6–12 months before renewal, documenting all unused seats from M&A activity, and presenting the data to Microsoft as justification for a significantly reduced renewal baseline. In this case, 1,200 seats tied to a divested unit were eliminated at renewal, driving substantial savings.
We’ll help you optimise your licences and negotiate a flexible, cost-effective agreement — so you only pay for what you need, when you need it.
This case study is part of our Microsoft Enterprise Agreement Guide pillar. Explore related case studies and guides: