Case Study – Microsoft EA Renewal Service U.S. Media & Entertainment Company – Microsoft EA Overhaul Cuts Costs 25% and Empowers Cloud Creativity
Background
A Los Angeles-based media and entertainment conglomerate (industry: film and digital content production) with 12,000 employees engaged Redress Compliance to optimize its Microsoft Enterprise Agreement.
The company, known for its television networks and streaming service, has approximately $15 billion in annual revenue and operates globally.
Its Microsoft environment includes Microsoft 365 for corporate functions (a mix of E3 and E5 licenses, with E5 primarily used by executives and IT/security teams), extensive use of Teams for collaboration across creative teams, and Azure cloud services powering parts of its streaming platform and data analytics on viewer behavior.
They also leverage Power BI for internal analytics and have a small deployment of Dynamics 365 for finance. The EA was in its final year, and a decision regarding renewal or restructuring was on the horizon.
The goal was to reduce unnecessary spending and ensure the Microsoft agreement could flexibly support innovative projects in the pipeline (like AI-driven content indexing) without locking the company into unwanted costs.
Read our guide to Microsoft EA renewals.
Challenges
The media company’s challenges centered on over-licensing and vendor-driven bundling that didn’t fully align with its needs.
Microsoft had heavily promoted M365 E5 suites, and over the years, the company had accumulated E5 licenses beyond what was truly needed, resulting in many E5 features (e.g., advanced compliance, Phone System) not being widely adopted.
The IT team estimated that nearly 30% of E5 features remained unused, as many creative staff members only used core Office apps and Adobe Creative software, rather than the advanced features of E5.
This aligns with common patterns where enterprises oversubscribe to top-tier licenses without fully utilizing them.
Furthermore, Microsoft’s renewal proposal included costly additions such as enterprise-wide Power Platform licensing and a push towards a larger Azure commitment (to host more streaming workloads on Azure).
The company was cautious about overcommitting to Azure, as it also utilized AWS for some services. They wanted to remain cloud-agnostic for their customer-facing platforms and avoid vendor lock-in.
Another pain point was the lack of transparency and flexibility in the current EA. The finance team found it challenging to attribute Microsoft costs to specific projects or departments, which hindered accountability.
True-ups always resulted in surprises, especially when new projects spun up, requiring temporary licenses or cloud resources. Microsoft’s proposed terms didn’t offer any relief here – if anything, bundling more services in the EA would further obscure cost allocation.
The media firm needed to distinguish between what it was using and what it was paying for, eliminate excess costs, and negotiate an EA that supported their fast-moving creative projects (which often start and stop) without incurring deadweight expenses.
How Redress Compliance Helped
- License Utilization Analysis: Redress Compliance initiated the project with a comprehensive analysis of Microsoft 365 and other licenses in use. They found that out of roughly 5,000 M365 E5 licenses, only about 3,000 had users actively leveraging any E5-exclusive features (like Advanced Threat Protection or Power BI Pro). The remaining 2,000 users were candidates for downgrades to E3, which would still cover their needs (email, Office apps, Teams) at a much lower cost. Redress also identified dozens of Visio and Project licenses that were assigned across various teams “just in case” but not actively used – classic shelfware ripe for elimination. On the Azure front, Redress reviewed the past 12 months of Azure usage, which revealed that the company was only consuming about 60% of its existing Azure monetary commitment, as some planned cloud migrations had been delayed. Without adjustment, the company was headed toward incurring significant costs for unused cloud capacity. This analysis provided a clear picture of what Microsoft products and services truly delivered value to the client’s operations.
- Rearchitecting the EA – Right Products, Right Size: Using the data, Redress devised a rearchitected EA tailored to the client. Key changes included shifting 2,000 users from E5 to E3 and procuring a limited number of standalone Microsoft 365 add-ons for specific needs (for instance, a Phone System add-on for a subset of users who needed advanced calling, rather than E5 for all). This approach ensured those who needed premium features still had them, but the majority did not carry that cost. They also recommended removing enterprise-wide Power Platform bundles – instead of blanket licensing Power Apps or Power BI for everyone, the new plan was to license these for the specific teams using them (e.g., data analytics and marketing), which was more cost-effective. On Azure, Redress proposed reducing the EA’s Azure commitment to align with actual use, and structuring any additional cloud needs on a pay-as-you-go basis or short-term agreements. They even explored a multi-cloud negotiation tactic: by signaling that the company could leverage AWS or GCP if Azure pricing weren’t favorable, Redress gained leverage to secure a better Azure discount without increasing commitment. The re-architected EA also separated a few items. For example, developer tools and test environments could be handled via Visual Studio (now Azure DevOps) subscriptions outside the EA, which gave the engineering teams more flexibility.
- Negotiation – Cost Cuts and Improved Terms: Redress Compliance led a robust negotiation with Microsoft. Highlighting the company’s status as a marquee media brand (which Microsoft wants as a reference customer), they pressed for significant cost concessions. The team achieved a 25% overall cost reduction from Microsoft’s initial renewal quote. This was achieved through a combination of line-by-line cost cuts (for instance, securing a deeper discount on M365 E3 than the standard rate, as more users would be on E3) and removing unnecessary elements from the deal. When Microsoft representatives saw the detailed usage data, they conceded that maintaining 5,000 E5s wasn’t defensible. Instead, they focused on retaining some E5 and ensuring the company stayed on the Microsoft cloud for new projects. Redress secured flexible cloud terms, including an Azure arrangement where the company could shift a portion of its unused Azure credits toward AI or analytics services in Azure in the future (an incentive Microsoft offered once the threat of losing cloud workloads became apparent). Additionally, Redress negotiated improved transparency measures: the new EA would include quarterly Microsoft-led consumption reports, and Microsoft agreed to provide tagging mechanisms to help attribute Azure costs by project, aiding the client’s cost management. While these aren’t standard in EAs, pushing for them helped address the client’s concerns about transparency.
- Long-Term Alignment with Business Needs: After finalizing the EA, Redress worked with the client to ensure governance in the future. They helped implement an internal tagging system for licenses (mapping licenses to departments or productions) to improve cost tracking. They also established a cadence for semi-annual reviews with Microsoft to discuss usage and new needs, effectively transforming the EA from a static contract into a living framework that could adapt. Redress guided evaluation of any new Microsoft offerings (such as when Microsoft introduced an AI-powered Copilot feature), outlining how to pilot it with a small group rather than purchasing it for everyone. The result is a Microsoft strategy closely aligned with the media company’s creative and technical roadmap: the company can adopt new tech when it proves valuable, and the EA won’t become an anchor weighing down innovation.
Outcome and Impact
- Major Cost Savings: The renegotiated EA eliminated unnecessary spending and delivered a 25% cost savings, amounting to approximately $10 million over three years. Microsoft’s initial proposal for the renewal was approximately $40 million; Redress brought the committed spend down to roughly $30 million. This saving was achieved even as the company maintained (and even slightly expanded) the Microsoft services it truly uses – demonstrating that the fat was trimmed without loss of muscle. For example, by eliminating 2,000 unused E5s and some redundant licenses, the company saved millions of dollars annually, while still providing those users with the needed E3 licenses.
- Higher ROI on Licenses: With right-sizing, every dollar spent on Microsoft now aligns with actual business needs. The license ROI improved significantly – previously, paying E5 prices for an E3 use-case meant poor value. Now, each user’s license level reflects their actual usage profile. The reduction of shelfware (e.g., reclaiming unused Visio/Project licenses) results in almost zero waste; the IT team estimated that utilization of assigned licenses has improved, such that more than 95% of licenses are actively used quarterly, up from ~70% before. This efficiency is not only a cost win but also ensures the company isn’t paying for capabilities it doesn’t deploy.
- Cloud Flexibility and Control: By adjusting the Azure commitment downward and negotiating the ability to use multiple clouds, the media company avoided being over-leveraged with Microsoft. They retained negotiation leverage in the future and the freedom to choose the best cloud for each workload. The new EA’s Azure component is flexible – if certain streaming services scale up on Azure, they can increase usage at the negotiated rate; however, if not, they won’t be penalized for under-consumption. Microsoft’s concession allowing unused credits to be channeled into other Azure services (like AI APIs that the company plans to experiment with) means the client can extract value even if their core infrastructure usage dips. This kind of creative term essentially safeguarded the client from future Azure waste.
- Enhanced Transparency and Management: The inclusion of improved reporting and internal cost attribution has made Microsoft’s spending much more transparent. Each quarter, the CIO and CFO receive a detailed breakdown of Microsoft costs by department and project, enabling them to identify trends (e.g., a spike in Azure usage due to a new pilot project) and take action as needed. This level of insight was absent before and often led to finger-pointing at true-up time; now it’s a managed process. Internally, the IT asset team continues to work with Redress (or using Redress’s provided tools) to monitor license usage. The company has effectively adopted a culture of continuous optimization for its Microsoft environment – treating it not as a fixed expense but as a portfolio of services to be regularly evaluated. This cultural change is a lasting impact of the engagement.
- Empowering Innovation: Perhaps the most strategic outcome is that the Microsoft EA is no longer seen as a blocker to innovation. The company has confidence that if a new creative project kicks off needing cloud resources or collaboration tools, they can provision what’s needed without renegotiating the whole EA or incurring massive unplanned costs. The EA has guardrails and headroom for growth in the right areas, and none of the baggage of unused licenses dragging it down. In the fast-paced media industry, this flexibility to pivot and rapidly develop new capabilities (such as the AI content indexing pilot) under the umbrella of a well-negotiated EA is invaluable.
Client Quote
“We’ve turned our Microsoft agreement from a costly necessity into a strategic asset, thanks to Redress Compliance. They peeled back the layers of our EA and showed us where we were bleeding money on things we didn’t use. The 25% savings speak for themselves, but what’s even more important is the flexibility we gained. Now we can accelerate our cloud and AI projects knowing our contract won’t hold us back or surprise us with costs. Redress was skeptical of the ‘one-size-fits-all’ bundle Microsoft tried to sell us – and they were right. In the end, we got a tailored deal that supports our creative business. Redress truly had our back as an independent advisor.” – CTO, U.S. Media & Entertainment Company
Call-to-Action
Your Microsoft EA should fuel innovation, not stifle it. Contact Redress Compliance for a free Microsoft EA Optimization Assessment to uncover hidden savings and craft an agreement that empowers your business. We help you cut through unnecessary costs and secure the terms you need for the future.
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