What Is a Microsoft Enterprise Agreement?
- Volume Licensing: Allows businesses to buy software in bulk.
- Customizable Plans: Tailored to meet company needs.
- Flexible Payment: Annual or multi-year terms available.
- Software Assurance: Includes updates and support.
- License Management: Centralized control over licenses.
What Is a Microsoft Enterprise Agreement?
In today’s rapidly evolving technological landscape, enterprises require effective tools and licensing solutions to keep up with their growth, flexibility, and budgetary needs.
A Microsoft Enterprise Agreement (EA) represents a strategic volume licensing solution tailored specifically for large organizations with 500 or more users or devices.
Designed to simplify purchasing, deployment, and management of Microsoft products and services, the EA is a trusted solution for businesses pursuing modernization, predictable costs, and digital transformation.
Core Components and Structure of the Microsoft Enterprise Agreement
The Microsoft Enterprise Agreement is structured to provide enterprises flexibility and scalability, ensuring they can make the most of Microsoft’s expansive technology offerings.
The following key components make the EA a comprehensive solution for businesses adopting a unified licensing framework.
Agreement Fundamentals
The EA is based on a three-year commitment, offering price protection and predictability over the term. This allows enterprises to maintain stable costs, making it easier to budget for IT needs and software investments over a multi-year period. During this time, organizations can adjust their licensing needs to account for growth or changes within their business environment through annual “True-Up” assessments, where licenses can be added based on actual usage without waiting for the agreement to conclude.
The ability to conduct annual True-Ups provides flexibility, allowing organizations to remain compliant while ensuring they have sufficient licenses to accommodate expansion or change. This feature aligns the licensing cost structure with an enterprise’s real-time growth, making it both predictable and adaptable.
Platform Commitment
One of the fundamental aspects of the EA is the requirement for a platform commitment. Organizations must license at least one Microsoft product enterprise-wide, such as a comprehensive set of licenses and services for each user or device. Microsoft 365 is often chosen as the standard platform commitment, offering a bundle that includes Office 365 applications, Windows 11, and Enterprise Mobility + Security (EMS).
This platform commitment requirement helps organizations simplify their licensing approach by providing comprehensive access to Microsoft’s productivity and security tools suite. Committing to Microsoft 365, for example, provides an integrated solution that helps businesses enhance productivity while ensuring security and compliance across their environments.
Key Features and Benefits of the Enterprise Agreement
The Microsoft Enterprise Agreement offers several benefits that attract large-scale organizations.
Let’s explore some of the key features that set this agreement apart.
Volume Pricing Advantages
The EA offers substantial pricing advantages, particularly for large enterprises that need many licenses. The agreement utilizes tiered pricing, with discounts based on the organization’s size. Pricing tiers are labeled from A to D, with higher discounts available for organizations that require more licenses.
This structure provides savings for businesses that operate at scale. The higher the volume of licenses, the better the discount offered, which means organizations with a large user base benefit from significantly reduced costs compared to purchasing individual licenses.
Software Assurance Integration
Every Enterprise Agreement includes mandatory Software Assurance (SA), Microsoft’s maintenance and support program. Software Assurance offers a variety of benefits designed to enhance an organization’s use of Microsoft products, such as:
- Access to the Latest Versions: Organizations automatically gain access to the latest software versions, helping them stay current without paying additional upgrade costs.
- Comprehensive Training and Resources: Software Assurance provides access to training resources, which help organizations enhance the skills of their IT teams and end-users.
- Technical Support: The agreement includes technical support services, ensuring rapid response to issues.
- Additional Deployment Rights: Enterprises benefit from flexible deployment rights, allowing them to adapt Microsoft solutions across different environments with fewer licensing complexities.
Simplified License Management
Managing licenses can be challenging, especially for large organizations with a global presence. The EA simplifies this process by consolidating all licenses under a single agreement with centralized procurement and management. With annual True-Up capabilities, enterprises can adjust their yearly license count to reflect their usage and growth.
This centralized approach also aids in compliance tracking, an essential aspect of software asset management. Enterprises can easily assess their license position and ensure they comply, reducing the risk of under-licensing or overspending.
Read about Microsoft SCE enrollments.
Product Coverage Under the Microsoft Enterprise Agreement
The Microsoft Enterprise Agreement provides organizations with a broad spectrum of Microsoft technologies, enabling enterprises to choose the tools that best suit their needs. Products covered under an EA include:
| Category | Products |
| Office Products | Office 365, Microsoft 365, Exchange Online, SharePoint Online, Teams |
| Windows OS | Windows 10/11 Enterprise |
| Server Products | Windows Server, SQL Server, Exchange Server |
| Cloud Services | Azure, Dynamics 365 |
| Security Solutions | Enterprise Mobility + Security (EMS) |
| Development Tools | Visual Studio Enterprise, Professional |
This wide-ranging product offering ensures that organizations can standardize on Microsoft technologies across their entire IT environment, from cloud services to productivity tools and security solutions.
Types of Enterprise Agreements
Microsoft offers different types of Enterprise Agreements to cater to varying needs. The two primary options are the Standard Enterprise Agreement and the Enterprise Subscription Agreement (EAS).
Standard Enterprise Agreement
This traditional licensing model allows organizations to acquire perpetual licenses alongside Software Assurance, paid through three annual installments. At the end of the three-year agreement, organizations retain perpetual ownership of the licenses, though Software Assurance and its benefits end unless extended through a renewal.
Enterprise Subscription Agreement (EAS)
In contrast to the standard EA, the Enterprise Subscription Agreement provides licenses on a subscription basis. This model has several key benefits:
- Lower Initial Costs: The subscription model has lower upfront costs than buying perpetual licenses.
- Greater Flexibility: Organizations can increase or decrease license counts yearly based on their requirements.
- No Perpetual Rights: Licenses are provided for the duration of the agreement, but organizations can buy out the licenses to retain them on a perpetual basis at the end of the term.
Cost Considerations
When evaluating a Microsoft Enterprise Agreement, it’s important to consider recent market trends that may impact the cost of licenses and Software Assurance:
- Microsoft 365 product family pricing has seen an approximate 10% increase.
- SQL Server licensing costs have risen 10% for Enterprise Edition two-core packs.
- Software Assurance costs typically amount to around 25% of the overall license cost.
Despite the recent cost adjustments, the EA continues to provide substantial benefits for large organizations, particularly when factoring in volume discounts, budget predictability, and the breadth of solutions included in the agreement.
Strategic Advantages of a Microsoft Enterprise Agreement
The Microsoft Enterprise Agreement offers strategic benefits to enterprises beyond licensing. It is a holistic tool for efficiently managing Microsoft solutions.
Technology Access and Integration
By adopting an EA, organizations can access the latest Microsoft technologies, whether on-premises, in the cloud, or as a hybrid deployment. This is crucial for enterprises that leverage cutting-edge technologies to maintain competitiveness. Additionally, EA customers benefit from advanced security features, particularly important in today’s threat landscape.
The EA also supports cloud integration, enabling enterprises to extend their on-premises solutions into the cloud with Azure and Dynamics 365. This flexibility allows businesses to adopt cloud solutions on their terms, at their own pace, which is key for organizations with hybrid IT environments.
Read about Microsoft EA for Government entities.
Financial and Budgetary Benefits
One major advantage of an EA is budget predictability. With fixed pricing over the three-year term, organizations can easily plan their IT expenditures, which is particularly helpful for maintaining cost stability. Additionally, volume discounts and price protection during the agreement period help reduce financial uncertainty and provide cost savings compared to ad-hoc purchases.
The flexible payment options associated with the EA are also valuable. They allow organizations to spread costs over three annual installments instead of facing a large upfront payment, which can be a significant advantage for organizations that need to be particularly cost-conscious.
Implementation Considerations
Organizations need to consider several implementation requirements to fully leverage the benefits of a Microsoft Enterprise Agreement.
Qualification Requirements
To qualify for an EA, an organization must have a minimum of 500 users or devices, though the threshold is lowered to 250 for public sector organizations. In addition, enterprises must commit to licensing at least one core Microsoft product across all users or devices enterprise-wide and agree to a minimum three-year term.
Management Requirements
Successful implementation of an EA requires proper planning and ongoing management. This includes regular asset inventory management, which is essential for determining the licenses required yearly, and conducting True-Up assessments to align license counts with actual use.
Additionally, organizations must clearly understand Microsoft’s product use rights to avoid compliance issues. Properly managing the agreement helps optimize license utilization, ensuring that the organization pays only for what it uses, thereby maximizing the return on investment.
Future Outlook for the Enterprise Agreement
The Microsoft Enterprise Agreement continues evolving to meet modern enterprises’ changing needs. With increased focus on cloud services, subscription-based licensing models, and enhanced security and compliance, the EA remains a crucial tool for organizations seeking to implement digital transformation strategies.
As more organizations transition toward cloud solutions, Microsoft is shifting the focus of its licensing programs to reflect this trend. Enhanced integration with cloud services, advanced security capabilities, and a push towards more flexible subscription-based models indicate the future direction of the Enterprise Agreement.
FAQ: What Is a Microsoft Enterprise Agreement?
What is a Microsoft Enterprise Agreement?
A Microsoft Enterprise Agreement is a volume licensing program for businesses. It provides flexible pricing and terms based on the number of licenses and the organization’s specific needs.
Who qualifies for a Microsoft Enterprise Agreement?
Large businesses or organizations with at least 500 users or devices typically qualify for an Enterprise Agreement.
What products are covered under a Microsoft Enterprise Agreement?
It covers Microsoft software, cloud services like Azure, and other tools like Office 365.
How long is a Microsoft Enterprise Agreement valid?
The agreement is typically valid for three years, with the option to renew.
Is the Microsoft Enterprise Agreement customizable?
Yes, it offers flexibility to tailor the terms and licenses based on the company’s specific needs.
What benefits does a Microsoft Enterprise Agreement offer?
It provides cost savings, access to the latest software, cloud services, and comprehensive support options.
What happens if the organization needs more licenses during the agreement?
You can add licenses to your agreement through a process called “true-up,” adjusting the contract as the business grows.
Can small businesses get a Microsoft Enterprise Agreement?
Microsoft Enterprise Agreements are generally designed for larger organizations with more than 500 users or devices.
Are there any payment options available with a Microsoft Enterprise Agreement?
Yes, payment can be made annually or with different financing options depending on the agreement.
Does a Microsoft Enterprise Agreement include support?
Yes, it includes technical support and can be extended with additional services as required.
What is the difference between an Enterprise Agreement and a Microsoft 365 subscription?
An Enterprise Agreement is for larger organizations with volume licensing, while Microsoft 365 is a subscription-based service with cloud integration.
How do you sign up for a Microsoft Enterprise Agreement?
You must contact a Microsoft partner or reseller who will assist with the contract and pricing.
Can the terms of an Enterprise Agreement be modified?
The terms can be modified during the renewal period or with mutual agreement.
Is the Microsoft Enterprise Agreement applicable globally?
It is available in many countries, though specific terms may vary by region.
What happens at the end of the agreement?
At the end of the term, you can renew the agreement, switch to a different licensing model, or move to another provider.
