Navigating the complexities of software licensing can be daunting for any organization, and the Microsoft Enterprise Agreement stands as a beacon of clarity amidst this often confusing landscape.
As one of Microsoft’s most comprehensive licensing solutions, it offers a unified, cost-effective approach to managing and deploying Microsoft products and services across large-scale enterprises.
In this article, we will delve into the nuances of the Microsoft Enterprise Agreement, uncovering its key benefits, unique features and how it can significantly streamline your organization’s software management strategy. Buckle up as we embark on a journey to demystify one of the most beneficial tools in enterprise software licensing.
What’s The Microsoft Enterprise Agreement?
A Microsoft Enterprise Agreement (EA) is a volume licensing program designed for large organizations with 500 or more users or devices.
This comprehensive program provides a platform for organizations to standardize their IT infrastructure across the enterprise, leverage volume discounts to reduce costs, and manage their Microsoft licenses under one unified agreement.
The EA offers the flexibility to choose among several licensing options for Microsoft products, including cloud services like Office 365 and Azure and on-premise software such as Windows, Microsoft Office, and other server products.
The Microsoft EA simplifies license management and allows organizations to add and adjust products according to their changing business needs..
- What's The Microsoft Enterprise Agreement?
- Microsoft Enterprise Agreement Details
- Two Types of Microsoft Enterprise Agreements
- Pros and Cons of Microsoft Enterprise Agreement
- Pros and Cons of Microsoft EAS
- Expert advice on EAS vs EA – What should you pick?
- Microsoft EA Renewal Check-List
- Products part of Microsoft Enterprise Agreement
- Microsoft EA vs CSP
- Understanding Microsoft Volume Licensing Service Center
- FAQs About The Microsoft Enterprise Agreement
- Case Study
- Simplify License Management with a Microsoft Enterprise Agreement – Learn More Now
- Microsoft Enterprise Agreement Optimization Service
Microsoft Enterprise Agreement Details
- Eligibility: Businesses with 500 or more users or devices are eligible for the Microsoft Enterprise Agreement.
- Commitment: The Enterprise Agreement requires a three-year commitment, with renewal options.
- Coverage: It provides access to Microsoft’s suite of services, including Office 365, Azure, and Dynamics 365.
- Licenses: The agreement offers different licenses: Core CAL or Enterprise CAL for users or devices and server licenses for data centers.
- Pricing: Pricing is volume-based, offering better rates for larger organizations.
- True-Up: Annually, businesses must account for any additional licenses used beyond the original agreement, known as a True-Up.
- Software Assurance: This is included providing access to the latest software versions, training, and support.
- Payment Flexibility: Customers can pay upfront or spread payments equally over three years.
- Cloud Services: Offers flexibility to transition to cloud services at your own pace.
Two Types of Microsoft Enterprise Agreements
Microsoft Enterprise Agreement (EA)
The Microsoft Enterprise Agreement (EA) is a volume licensing package for organizations with 500 or more users or devices. Under this agreement, organizations can acquire licenses for Microsoft products and services, such as Office 365, Azure, and Dynamics 365, while taking advantage of volume discounts.
The EA is a three-year agreement during which the organization can adjust the number of licenses according to their business needs, with annual True-Up requirements. The EA also includes Software Assurance, providing access to the latest software versions, training, and support.
Microsoft Enterprise Subscription Agreement (EAS)
The Microsoft Enterprise Subscription Agreement (EAS) is similar to the EA but based on a subscription model. Organizations still get access to Microsoft’s suite of products, but instead of buying licenses, they subscribe to them for one to three years.
This can be a more cost-effective solution for organizations with fluctuating staff numbers, allowing them to increase or decrease the number of subscriptions annually. Unlike EA, EAS allows organizations to decrease the count of licenses during the agreement term, offering greater flexibility.
Difference between EA and EAS
The key difference between the EA and EAS lies in the ownership and flexibility of the licenses. With an EA, the organization owns the licenses after the three-year agreement.
It can continue to use the software indefinitely, whereas, with an EAS, the organization subscribes to it and must renew the subscription to continue using it. In terms of flexibility, while both agreements allow organizations to add licenses,
EAS provides more flexibility by also allowing them to reduce the number of licenses during the agreement term.
Pros and Cons of Microsoft Enterprise Agreement
Pros of Microsoft EA:
- Volume Discounts: Organizations benefit from discounted rates due to the bulk purchase of licenses.
- Software Assurance: Included in the agreement, it provides access to the latest software versions, training, and support.
- Flexibility: Ability to add licenses as needed throughout the contract term.
- Simplicity: One agreement covers all licenses, making management and compliance easier.
- Predictability: Organizations can plan their IT budget better as the cost of licenses is known upfront for the three-year term.
Cons of Microsoft EA:
- Minimum Commitment: Requires a minimum of 500 users or devices, limiting its applicability for smaller businesses.
- Lock-in Period: The agreement is for three years, which may not suit organizations with short-term needs.
- Limited Decrease: Organizations can only decrease the license count at the end of the three-year term, not annually.
- True-Up Costs: If an organization adds licenses during the agreement term, they must pay for the additional licenses at the next annual True-Up.
- Ownership Costs: While owning licenses might seem beneficial, it could lead to higher costs in the long run if not appropriately managed, due to ongoing maintenance and support costs.
Pros and Cons of Microsoft EAS
Pros of EAS (Enterprise Agreement Subscription):
- Lower Upfront Costs: As a subscription model, EAS offers lower initial costs than EA’s upfront licensing fees.
- Flexibility: EAS allows you to adjust the number of licenses up and down annually, providing better adaptability to changes in your business size.
- Always Up to Date: With EAS, organizations always have access to the latest versions of Microsoft software.
- Transparency: The subscription model provides predictable, recurring costs, making budget planning easier.
- Software Assurance: Like EA, EAS includes Software Assurance providing access to the latest updates, training resources, and support.
Cons of EAS (Enterprise Agreement Subscription):
- Ongoing Payments: Unlike the EA, where you own the license after the initial cost, EAS requires continual payment to maintain access to the software.
- Potential Long-Term Cost: Depending on the length of usage, the subscription costs could surpass the one-time purchase cost of EA.
- Minimum Commitment: EAS also requires a minimum commitment of 500 users or devices, which may not be suitable for smaller businesses.
- Lock-in Period: EAS agreements typically last three years, which might not be ideal for organizations with rapidly changing needs.
- True-Down Limitations: While EAS allows the reduction of licenses, it’s limited to once per year at the annual true-down period.
Expert advice on EAS vs EA – What should you pick?
|Criteria||Choose EA (Enterprise Agreement) When||Choose EAS (Enterprise Agreement Subscription) When|
|Upfront Costs||You have a sufficient budget to pay the upfront licensing fees and prefer to have a one-time cost.||Your budget is limited, and you prefer lower initial costs with a subscription model.|
|Long-Term Costs||You plan to use the software for an extended period, making the one-time purchase cost cheaper in the long run.||You require the software for a shorter period, making the subscription cost-effective.|
|License Flexibility||You expect the number of licenses required to remain fairly stable over time.||Your business is dynamic, and the number of licenses needed may change annually.|
|Software Updates||You don’t require immediate access to the latest software versions and can manage with Software Assurance updates.||You want immediate access to the latest software versions as they are released.|
|Business Size||You have a more significant business with over 500 users or devices and want to own the licenses.||You have a medium to large business with over 500 users or devices and prefer a flexible subscription.|
|Commitment Period||You can commit to a more extended contract period and want to avoid recurring payments.||You prefer a shorter commitment period and are comfortable with ongoing payments.|
Microsoft EA Renewal Check-List
- Review Current Agreement: Look at the details of your current Microsoft agreement, and ensure you understand all the terms and costs.
- Evaluate Usage: Monitor and review your actual usage of Microsoft products. This includes software and cloud services. Make sure you’re using all the licenses you’ve paid for.
- Identify Needs: Determine your future needs. Will you need more licenses or fewer? Are there additional products or services you’ll want to include?
- Assess Compliance: Ensure that you comply with your current licensing agreement. This includes the number of licenses, their use, and optimizing your EA.
- Benchmark Costs: Compare your current agreement costs to market averages. Are you paying more or less than similar organizations?
- Understand Changes in Microsoft’s Offerings: Microsoft regularly updates its software offerings and licensing models. Make sure you’re aware of any changes that could impact your renewal.
- Consider Alternatives: Look into alternative licensing agreements, like an Enterprise Agreement Subscription (EAS) or Cloud Solution Provider (CSP), to see if they might fit your organization better.
- Negotiate: Once you understand your needs and options, negotiate your renewal agreement with Microsoft. Engaging a licensing expert or consultant to assist with this process might be beneficial.
- Plan for the Future: Think about your organization’s future needs. You might want to include options for adding licenses or services in the future.
- Documentation: Make sure all agreements and changes are documented. This is important for future reference and for maintaining compliance.
Products part of Microsoft Enterprise Agreement
|Office Products||Office 365, Microsoft 365, Exchange Online, SharePoint Online, Teams|
|Windows OS||Windows 10 Enterprise, Windows 11 Enterprise|
|Server Products||Windows Server, SQL Server, Exchange Server, SharePoint Server|
|Cloud Services||Azure, Dynamics 365|
|Enterprise Mobility + Security||Intune, Azure Active Directory Premium, Azure Information Protection|
|Developer Tools||Visual Studio Enterprise, Visual Studio Professional|
Microsoft EA vs CSP
|Comparison Criteria||Microsoft EA||CSP|
|Contract Term||Typically 3 years||No fixed term, monthly subscription|
|Commitment||Requires a minimum commitment||No minimum commitment|
|Pricing||Fixed pricing for the term of the contract||Dynamic, can change as per market|
|Flexibility||Typically three years||High flexibility, can change subscription anytime|
|Customer Support||Direct from Microsoft||Provided by the partner|
|License Management||Managed through Volume Licensing Service Center (VLSC)||Managed through Partner Center|
|Target Audience||Suitable for large organizations||Suitable for SMBs and larger organizations seeking flexibility|
Understanding Microsoft Volume Licensing Service Center
The Microsoft Volume Licensing Service Center (VLSC) is a web-based tool that provides organizations with a central location to manage their Microsoft software licenses. The VLSC allows organizations to view and manage their license agreements, download software, and access product keys.
The VLSC provides access to tools like the License Advisor and License Summary. These tools help organizations determine their necessary licenses and ensure compliance with licensing requirements.
It is also important to note that Microsoft SPLA is not included in Microsoft EA.
FAQs About The Microsoft Enterprise Agreement
What is the difference between an Enterprise Agreement and an Enterprise Subscription Agreement?
The Enterprise Agreement is a traditional licensing program that provides perpetual licenses for Microsoft software products. The Enterprise Subscription Agreement is a subscription-based licensing program that provides access to Microsoft software products for a specified period.
Can I pay for software licenses in installments?
Yes, the Microsoft Enterprise Agreement provides the option to pay for software licenses in installments rather than upfront.
What is an enterprise subscription agreement?
An enterprise subscription agreement is a contract between a software provider and an organization that allows the organization to use the software on a subscription basis. The agreement usually includes terms for updates and support.
What are the benefits of Microsoft Enterprise Agreement?
The Microsoft Enterprise Agreement (EA) offers several benefits, including discounted pricing, the ability to spread payments annually, simplified license management through a single agreement, and the flexibility to add and adjust products and services to meet changing business needs.
What are the disadvantages of Microsoft Enterprise Agreement?
The primary disadvantage of a Microsoft Enterprise Agreement is that it requires a three-year commitment, which may not suit organizations with fluctuating numbers of users. Also, it can be complex to manage, requiring a minimum of 500 users/devices.
What is the difference between CSP and enterprise agreement?
The Cloud Solution Provider (CSP) program allows businesses to go month-to-month or commit to longer terms for cloud services, providing flexibility. On the other hand, an Enterprise Agreement (EA) requires a three-year commitment but offers a discount for this upfront commitment.
What is the threshold for Microsoft EA?
The threshold for a Microsoft Enterprise Agreement is 500 users or devices. This makes the EA better suited for larger organizations.
What are the benefits of Microsoft E5 over E3?
Microsoft E5 includes all the features of E3 plus additional features such as advanced threat protection, voice capabilities, Power BI Pro, and advanced compliance tools.
What does EA stand for in Azure?
In Azure, EA stands for Enterprise Agreement. It’s a volume licensing package for large organizations, including discounts for purchasing bulk software.
What does Microsoft EMS mean?
EMS stands for Enterprise Mobility + Security. Microsoft provides tools to manage and secure users, devices, apps, and data.
How does Windows Enterprise licensing work?
Windows Enterprise licensing is typically done on a per-device or per-user basis. Licenses are usually sold through volume licensing programs like the Microsoft Enterprise Agreement.
What is a Microsoft Enterprise Enrollment?
Enterprise Enrollment is part of the Microsoft Enterprise Agreement that organizations complete enrolling in specific Microsoft services, like Office 365 or Azure.
What are the types of Microsoft licenses?
Microsoft offers several types of licenses, including individual retail licenses, OEM licenses, volume licenses (like the Microsoft Enterprise Agreement), and subscription-based licenses (like Office 365).
What are the two features of an enterprise agreement?
Two key features of an enterprise agreement are the ability to spread payments over the term of the agreement and the ability to increase or decrease license counts on an annual basis to accommodate changing business needs.
How long is a Microsoft Enterprise Agreement?
A Microsoft Enterprise Agreement typically lasts for three years.
How long does a CSP agreement last?
A CSP agreement can be as short as one month or as long as three years, depending on the specific terms of the agreement.
What is a subscription in Microsoft Azure?
A subscription in Microsoft Azure is an agreement with Microsoft to use one or more cloud-based services, often for a specific amount of usage at a set price.
What is a Microsoft MCA?
Microsoft Customer Agreement (MCA) is a simplified agreement that provides consistent customer purchasing terms, regardless of the organization’s size or purchase volume.
What is the percentage discount for Microsoft Level D?
Level D is Microsoft’s program’s highest volume licensing level, typically offering the highest discounts. The discount varies by product and volume but can be up to 45%.
What minimum commitment must an EA customer make to purchasing the Azure services each year?
The minimum monetary commitment for an Azure Enterprise Agreement customer is typically $15,000 per year. However, this may vary depending on the specifics of the agreement.
How does MS EA compare to Select Plus?
Select Plus was no longer eligible after 2015. It was aimed at organizations with smaller users than EA.
MS EA vs Open Value, what are the differences?
Microsoft Enterprise Agreement is ideal for larger organizations with 500+ users or devices. In contrast, Microsoft Open Value suits small to mid-sized businesses with five or more desktop PCs.
MS Enterprise Agreement vs MPSA?
While the Enterprise Agreement is designed for larger organizations with 500+ users or devices, MPSA offers a more flexible approach for organizations of various sizes.
A Microsoft Enterprise Agreement is a cost-effective and flexible way for organizations to manage their software licensing needs.
The agreement provides access to a broad range of Microsoft software products, flexible licensing options, and the ability to add or remove licenses during the agreement term.
The program also simplifies license management by providing a single agreement that covers all software licenses and access to the Microsoft Volume Licensing Service Center.
Before signing a Microsoft Enterprise Agreement, organizations should evaluate their software needs, budget, and license management capabilities.
Strategic EA Renewal Results in $14 Million Savings for a Multinational Corporation with Redress Compliance
The client was a multinational corporation operating across multiple continents and industry verticals. Their existing Microsoft Enterprise Agreement (EA) was nearing its renewal date, and they were seeking assistance in optimizing their software licensing to avoid unnecessary costs.
The multinational corporation had a complex IT infrastructure, with thousands of software users across various departments. Managing software licenses on such a scale was daunting, and the company was concerned that they were not utilizing their existing licenses efficiently. They were also apprehensive about potentially overspending on unnecessary licenses in the upcoming EA renewal.
Redress Compliance was brought in to conduct an in-depth analysis of the company’s software usage and license allocation. Our team of experts used a combination of data analysis, stakeholder interviews, and industry best practices to identify areas of inefficiency and potential savings.
The key findings and actions included:
- Identification of Unused Licenses: Redress found that many licenses were allocated to employees who no longer needed or had left the company. These licenses were reclaimed, reducing the required license count for the upcoming EA renewal.
- Optimization of License Types: Redress identified that many employees were allocated higher-cost licenses than necessary for their roles. The company could still meet its software needs while reducing costs by reallocating these to lower-cost license types.
- Negotiation Support: Redress Compliance provided strategic advice during the EA renewal negotiation process, ensuring the company secured the best possible terms and prices.
With Redress Compliance’s expert guidance, the multinational corporation was able to optimize its license usage and secure more favorable terms in its Microsoft EA renewal. The proactive management of their software licensing resulted in substantial cost savings of $14 million, demonstrating the value of a strategic approach to EA management.
Moreover, the project also created a robust licensing management framework for the company, ensuring they would remain efficient and compliant in their software licensing for years. This case study exemplifies Redress Compliance’s commitment to delivering clients tangible value and strategic insights.
Simplify License Management with a Microsoft Enterprise Agreement – Learn More Now
Redress Compliance is your trusted partner for all things compliance.
Our team of experts has the knowledge and experience to help your business stay compliant and avoid any potential issues.
Whether you need advice on a specific compliance issue or ongoing support, we’re here to help.
Contact us today to learn more about how we can support your business.
Microsoft Enterprise Agreement Optimization Service
Our Microsoft Enterprise Agreement (EA) Optimization Service is designed to help organizations maximize the value of their Microsoft licensing agreements while ensuring compliance and cost efficiency.
This service is perfect for businesses seeking to get the most out of their Microsoft EA, especially as renewal time approaches.
- License Inventory Assessment: We start by thoroughly reviewing your existing Microsoft licenses. This includes identifying all active, inactive, and underutilized licenses and understanding the specific software and services each license covers.
- Usage Analysis: We analyze your actual usage data to identify areas of over-licensing and under-licensing. This information is critical to ensure your organization is fully compliant and not paying for unnecessary licenses.
- License Optimization: Our team will recommend reallocating and reclassifying licenses to ensure you have the right licenses for your needs. This process often results in significant cost savings.
- Renewal Support: We provide strategic guidance during the EA renewal process, helping to negotiate better terms and prices.
- Risk Assessment: We identify potential areas of non-compliance and provide recommendations on how to mitigate these risks.
- Strategic Planning: We help you plan for future Microsoft software needs, ensuring your EA aligns with your organization’s strategic goals and budget.
- Cost savings: By optimizing your license usage, you can avoid paying for unnecessary licenses and negotiate better terms in your EA renewal.
- Compliance assurance: Our service helps you fully comply with Microsoft’s licensing rules, avoiding costly penalties and legal risks.
- Strategic alignment: We ensure that your Microsoft EA aligns with your organization’s strategic goals and budget, helping you to get the most value out of your investment
Contact us today if you need expert help with your Microsoft Enterprise Agreement!