Customizing Microsoft EA to Fit Your Needs: Negotiation Strategies for Smarter Contracts
Why Microsoft Pushes a One-Size-Fits-All EA
Microsoft’s default sales playbook for Enterprise Agreements (EA) is a one-size-fits-all bundle. The sales team often tries to bundle as many products and services as possible under your EA, pitching it as an “all-in-one” solution.
This broad product bundling means you could end up licensing the full Microsoft 365 suite, Azure services, Dynamics modules, and more for every user – whether you need them or not.
From Microsoft’s perspective, a bigger bundle drives more revenue and locks you into their ecosystem. But for you, the customer, it frequently results in paying for unused Microsoft licenses (known as shelfware).
In other words, you might be buying licenses for products or features that your teams never actually use. Read our ultimate guide to Microsoft EA negotiations.
Enterprises that accept Microsoft’s one-size-fits-all EA often overpay significantly. It’s common to see companies sign a 3-year EA that is bloated with unnecessary products simply because they were part of the default package.
This leads to shelfware sitting idle – for example, expensive security or compliance add-ons enabled for all employees when only a small IT team uses them, or Power Platform credits that never get consumed.
All this unused capacity translates to overspend. You’re essentially funding Microsoft’s sales agenda instead of your own business needs.
The risk of an uncustomized EA goes beyond just wasted money. An EA that isn’t tailored can also limit flexibility and create future costs. If your contract is filled with products you don’t deploy, you may face true-up charges for growth in areas you don’t even utilize, or miss out on budget for innovations you need.
This is why savvy CIOs and CFOs insist on tailoring the Enterprise Agreement scope to fit their specific business needs. The goal is to optimize Microsoft EA licensing by eliminating overspend on unused services and ensuring that every line item aligns with actual requirements.
The following Microsoft EA customization strategies demonstrate how to break free from Microsoft’s one-size-fits-all approach and negotiate a more tailored, custom-fit contract.
Step 1 — Identify What You Use
The first step in customizing your EA is to get a clear picture of what you use. Before entering into any renewal or negotiation, conduct a thorough internal usage audit across all Microsoft products in your environment.
Examine Microsoft 365 usage (including Office apps, Teams, SharePoint, and security features), Azure consumption, and any Dynamics 365 or Power Platform licenses.
The goal is to pinpoint shelfware and underutilized SKUs.
For example, you might discover that a certain advanced compliance module in your Microsoft 365 E5 suite is barely touched, or that only 100 out of 500 purchased Power BI Pro licenses are actively in use. This data is gold when it comes to tailoring your EA.
As you audit, separate the “must-haves” from the “nice-to-haves.” Which Microsoft products are mission-critical to your operations and widely adopted by your teams? Those are your must-haves – the licenses you’ll need to carry forward.
In contrast, identify features or products that sound promising on paper but are rarely utilized within your organization. Perhaps a developer tool or an analytics add-on was included for all users, yet only a small specialist team leverages it.
These are candidates for removal or reduction. By quantifying usage and adoption, you build a fact-based inventory of what’s truly needed.
This exercise not only reveals opportunities to reduce waste, but it also empowers you with hard data to drive negotiations in the next steps.
Read our negotiation guide how to Getting Discounts Beyond Standard EA Pricing
Step 2 — Negotiate Out Unnecessary Products
Armed with your usage data, you can now negotiate the removal of unnecessary products from your EA.
This is where you push back against Microsoft’s default bundle and remove the pieces that don’t fit your needs.
For example, if your audit reveals an underutilized Dynamics 365 module or a Power Platform SKU that offers minimal value, explicitly exclude it from the renewal scope.
Microsoft sales representatives will often resist these removals – it’s not in their interest to reduce your contract. You may hear arguments like “But this product is part of the bundle” or pressure to keep it “just in case.”
Stay firm and back your stance with data: if a product has low or zero usage, there’s no reason to pay for enterprise-wide licensing of it.
Be prepared for pushback. Microsoft might claim that removing a product will forfeit certain discounts or that you’re missing out on a future capability.
Don’t be swayed. Remind them (and yourself) that any discount on an unused product is meaningless – it’s still money wasted. Emphasize your company’s strategy of no shelfware and insist the EA reflects actual requirements.
It often helps to propose concrete contract language that excludes specific products or bundles you won’t use.
For instance, you can negotiate an amendment stating that certain underutilized SKUs are excluded from the agreement, or that you reserve the right to license a product only to a subset of users who require it (as opposed to an enterprise-wide license).
By carving out these unnecessary elements, you streamline your EA to cover only what delivers value, forcing Microsoft to focus the negotiation on the products that truly matter to your business.
Step 3 — Add Flexibility for Future Needs
Customizing an EA isn’t just about removing things – it’s also about adding flexibility for the future. Business needs evolve, and a smart contract accounts for that.
One effective tactic is negotiating custom clauses that allow product substitutions or adjustments over the EA term. For example, you might secure a clause that lets you swap one product for another of equal value if your priorities change.
Suppose you drop a certain security product in year 2 in favor of a new Microsoft solution – a substitution clause could let you apply those license funds to the new product without penalty.
Microsoft won’t offer this upfront, but if you ask and justify it (especially if you’re committing to Microsoft’s platform overall), they have leeway to include such terms.
Another key area of flexibility is how you handle true-ups and growth. In a standard EA, you’re locked into a set of products and can only increase quantities (true-up) annually – there’s no ability to reduce. To better align costs with actual adoption, negotiate a structure where true-up costs reflect real usage.
For instance, if you plan to roll out a new product gradually, you might negotiate to start with a smaller quantity and only true-up as more users onboard, rather than paying for everyone from day one. You could also seek price protections or credits if a project doesn’t ramp up as expected. The idea is to pay for real adoption, not optimistic forecasts.
Don’t forget to address the flexibility of on-premises to cloud migration. Many enterprises are in the midst of a transition – for example, moving from on-premises Office licenses to Microsoft 365 cloud subscriptions, or from SQL Server to Azure SQL. Ensure your EA has provisions to support this migration without incurring additional costs.
This could mean the ability to reallocate budget from an on-prem product to its cloud equivalent, or to phase one out mid-term in exchange for ramping up the other.
For example, negotiate terms that allow you to reduce on-prem licenses as you move to Azure services, applying the value of those licenses toward Azure credits or subscriptions. The goal in all cases is to avoid being trapped: your EA should have the flexibility to accommodate new technologies and business changes without incurring financial penalties.
Step 4 — Tailor Terms to Your Business Roadmap
No two businesses are the same, and your Microsoft agreement should reflect your unique plans. Tailor the EA’s terms to your business roadmap and future milestones. Start by aligning the scope with your known digital transformation plans.
If you are aware of major initiatives on the horizon (for example, a transition to a hybrid cloud architecture or the deployment of a new CRM system), ensure the EA’s product mix and timing align with these. Don’t let Microsoft load up your contract with products that aren’t on your roadmap. Instead, focus on the technologies that are.
If your company is likely to undergo mergers, acquisitions, or divestitures, this should explicitly be addressed in your EA terms. Microsoft’s standard EA is not very forgiving if your organization’s size or structure changes mid-term – you typically can’t reduce licenses even if you spin off a division.
However, you can negotiate custom M&A clauses. For example, include a term that allows you to proportionally adjust license counts (or carve out part of the agreement) in the event you divest a business unit.
Conversely, if you acquire a company, negotiate rights to add those users at a pre-agreed rate or have them co-terminate with your EA. These kinds of tailored terms ensure the contract scales with your business rather than forcing your business to fit the contract.
Also consider your cloud strategy and hybrid needs. If you intend to maintain some on-premises systems for a while, ensure the EA includes hybrid use benefits or dual-use rights so you’re not paying twice.
If you’re eyeing new Microsoft offerings like Copilot (the AI-powered assistant) or a niche Azure service, be cautious about locking in today. Those might be unproven products or subject to change. It’s perfectly reasonable to avoid committing to unproven or peripheral services in your EA scope.
You can negotiate evaluation periods or simply leave them out, with the option to purchase later if they prove valuable. The bottom line: shape the EA to serve your strategy, instead of bending your strategy to fit Microsoft’s standard EA.
By doing so, you avoid lock-in to technologies that aren’t ready or relevant, and you keep your options open to adopt new solutions on your timetable.
Step 5 — Negotiate Scope, Not Just Discounts
When it comes to EA renewals, many companies focus on securing a significant discount from Microsoft. But a 20% discount on a bloated scope is still a bad deal. The smarter approach is to negotiate the scope first, then the discount. In practice, this means your primary negotiation focus should be what’s included (and excluded) in the EA, rather than just haggling over percentages off list price.
Microsoft often initially quotes a large bundle with an attractive overall discount to make it appear as though you’re saving money. Don’t take that bait. Optimize the scope by eliminating all non-essential elements, as discussed in earlier steps.
It’s far better to pay for a lean, relevant set of products at maybe a slightly lower discount than to pay for a heap of unused services at a higher discount. Remember, the best way to save money is not to spend it on unneeded items in the first place.
Use independent data and analysis to validate your scope decisions. Rely on the findings from your internal usage audit rather than Microsoft’s projections or blanket recommendations. If Microsoft says “most customers buy X product,” that’s not a good enough reason for you to buy it – check if your users need X.
If Microsoft insists that a certain department “could benefit” from a tool, verify this with the business owners internally. You can also leverage benchmarks or advice from independent licensing advisors (if available to you) to sanity-check what truly similar companies include or exclude.
Come to the table with a justified scope: “This is what we need and no more.” By doing so, you shift the negotiation conversation. Instead of haggling purely on price, you’re debating the substance of the deal, where you have a solid footing.
Once the scope is right-sized, then negotiate the best pricing and discount you can on that tailored package. This way, every dollar you spend is productive, and any discount you win is on a clean, optimized base, ensuring genuine savings.
Step 6 — Governance and Internal Alignment
Achieving a truly customized Microsoft EA requires strong governance and internal alignment on your side. Microsoft’s negotiators are experts at exploiting internal disconnects, so you need a united front.
Start by building a cross-functional team for the EA renewal process that includes IT, procurement, finance, and ideally a few key business stakeholders.
Each brings a critical perspective: IT knows the technical needs and usage patterns; procurement knows negotiation tactics and contract fine print; finance watches the budget and ROI; and business unit leaders can validate what tools are needed on the ground.
By assembling this team early, you ensure all angles are covered and prevent last-minute surprises (like a department head saying “we can’t drop that product” at the eleventh hour).
Together, establish clear decision criteria for what should be included in the EA and what should be excluded. Agree on the following principles: We will not include a product unless an executive sponsor or team has explicitly requested it and will use it; We will favor smaller license quantities with room to grow over bulk upfront commitments; We will remove any product with consistently low adoption.
Having these criteria in writing helps your team stay disciplined when Microsoft’s sales reps try to upsell additional services.
It also makes internal debates easier – you can objectively refer back to the agreed rules. This kind of governance prevents the scope from creeping back up due to internal politics or “nice to have” wish lists.
Finally, document everything related to your scope negotiations and custom terms for future reference. Keep a log of what was removed or added and why, what special terms were negotiated, and any concessions Microsoft agreed to.
This documentation becomes invaluable at the next renewal cycle. Three years down the road, you don’t want to rediscover shelfware that you had already eliminated this time around, nor do you want to lose a hard-won flexible term because no one remembers to insist on it again.
Strong internal governance and record-keeping ensure that each EA renewal builds on the last – continuously refining your Microsoft licensing to stay efficient and aligned with your business.
Plus, maintaining internal alignment and a unified voice means you’ll negotiate from a position of strength, with Microsoft realizing that your company knows exactly what it wants.
Red Flags That Your EA Isn’t Customized Enough
How can you tell if your Enterprise Agreement is still too “cookie-cutter”? Watch for these red flags that indicate your EA wasn’t customized sufficiently:
- Products included that no team has requested or needs. If you scan your EA and find licenses for a software or service that none of your departments asked for, it’s a glaring sign of overscoping. This means you were likely sold on Microsoft’s bundle rather than your actual requirements – and you’re paying for something nobody uses.
- Microsoft resisted all scope adjustments during negotiation. If every time you tried to remove or tweak the product mix, Microsoft’s reps pushed back and you ultimately conceded, you probably ended up with their standard EA. An inability to change the default offer means the contract is likely filled with Microsoft’s agenda, not your custom terms.
- EA costs are growing faster than your usage. Over the term, or especially at renewal, check how your spend has changed about your user count or adoption of Microsoft services. If you see costs rising 10–20% (or more) while your workforce or actual usage grew only a few percent, you’re paying for growth that isn’t real. That gap is usually due to shelfware or unwarranted product additions – clear evidence the EA wasn’t right-sized to begin with.
If any of these red flags sound familiar, it’s time to intensify customization and renegotiation efforts. A properly tailored Microsoft EA should closely match your usage profile and strategic needs – anything else is money left on the table.
FAQ
Q: What’s the biggest mistake enterprises make with Microsoft EA scope?
A: The biggest mistake is accepting Microsoft’s pre-packaged bundle without removing unused products. Too many companies simply renew whatever Microsoft presents to them, resulting in paying for shelfware. Always customize the scope to eliminate what you don’t use.
Q: Can I remove products from my EA mid-term?
A: Usually, no. Once an EA is signed, the scope is locked in for the term (typically 3 years). You generally cannot drop products or reduce license counts mid-term. That’s why it’s critical to negotiate out unwanted products upfront at renewal. Scope adjustments must be made before you sign, as mid-term changes are very limited.
Q: How do I future-proof my EA?
A: Negotiate substitution rights and flexible true-up terms. In practice, this means building in the ability to swap products if needed and only pay for what you actually deploy. For example, secure terms that let you replace a product with a newer equivalent, or provisions that let your spending adjust if adoption is slower or faster than expected. This flexibility ensures your EA can adapt as your needs evolve.
Q: Does Microsoft allow custom clauses?
A: Yes – but only if you push for them. Microsoft won’t volunteer custom terms by default, but they will often agree to reasonable custom clauses when the deal size and your persistence justify it. For instance, you can negotiate special terms for things like merger/divestiture adjustments or specific usage rights. The key is you must propose and insist on these clauses; they won’t be handed out automatically.
Q: What’s the first step in customizing an EA?
A: The first step is to conduct an internal usage and adoption audit well before your renewal. Gather data on what licenses and services are being used and to what extent. This audit reveals where you’re over-licensed or underutilizing certain products. Armed with that insight, you can approach Microsoft with a clear plan to tailor the EA – focusing on what to keep, cut, or adjust – based on real usage evidence. This sets the foundation for a smarter, needs-based agreement.
