Starting Early: Timeline for EA Renewal Preparation (2025 Edition)
When should you start planning your Microsoft EA renewal? This 2025 guide outlines the steps to prepare 6–12 months in advance—from license cleanup to internal alignment—so you enter negotiations with confidence and achieve cost savings.
For organizations renewing a Microsoft EA in 2025, starting early is key. Below, we outline why early preparation matters and offer a 12-month renewal timeline to maximize your leverage and savings.
Read our overview on how to manage Microsoft EA renewals.
Why Early EA Renewal Planning Creates Leverage
Microsoft’s sales playbook for Enterprise Agreement renewals often relies on last-minute urgency. If you only start negotiations a few weeks before expiration, Microsoft knows you’re low on time and options.
By contrast, starting early (6–12 months out) shifts power back to you.
You can fully assess your needs, rally your internal team, and explore alternatives long before Microsoft dictates the timeline.
Key benefits of preparing well in advance include:
- Visibility into usage: With time to audit your licenses, you won’t renew blindly. You’ll spot unused licenses and true needs, preventing over-licensing.
- Cost control: Cleaning up shelfware and right-sizing licenses ahead of renewal can significantly trim costs before negotiations begin. It also helps set a realistic budget target (e.g., aiming to keep spending flat even if Microsoft pushes extras).
- Negotiation leverage: With time to research pricing and consider alternatives, you can push back on Microsoft’s first offer from a position of strength. For instance, Microsoft’s 2025 pricing changes (like price hikes and no volume discounts) make early negotiation even more critical.
- Unified internal front: Starting early gets IT, procurement, finance, and executives aligned on goals. Microsoft can’t divide and conquer if everyone internally agrees on what you will and won’t accept.
The 12-Month Renewal Timeline
12 Months Out — Building the Foundation
- Form a cross-functional team: Assemble a core group from IT, procurement, finance, and legal to lead the renewal. Involving all stakeholders early prevents internal surprises and keeps everyone on the same page.
- Audit current usage: Inventory all Microsoft licenses and track their usage. Identify “shelfware” (licenses paid for but not used) and any under-licensing. This baseline shows what to cut or adjust before renewal.
- Set priorities: Clarify what your organization needs from the new EA term. Are you focused on cost savings, planning a cloud migration, or deploying AI tools like Microsoft 365 Copilot? Agree on clear goals (e.g,. “no net increase in cost” or “enable X new capability within budget”) to guide your negotiations.
9 Months Out — License Cleanup and Rationalization
- Eliminate waste: Use your audit findings to streamline your operations. Remove or reassign unused licenses and downgrade expensive ones as needed. For example, if some users have E5 but don’t need its advanced features, plan to move them to E3. Every license you drop now lowers your renewal spend.
- Review costly services: Check the uptake of add-ons such as Microsoft Teams Phone, Power BI, or Dynamics. If a service isn’t being widely used, consider cutting it or reducing its quantity at renewal. Make sure you’re only paying for tools that deliver value.
- Preempt surprises: Conduct an internal true-up to fix any compliance gaps. If you find you’re under-licensed somewhere, address it now. Tidying up compliance removes any chance for Microsoft to spring a last-minute “audit surprise” as leverage.
6 Months Out — Benchmarking and Scenario Planning
- Explore scenarios: Develop a few “what-if” licensing scenarios. For instance, compare keeping most users on E3 versus upgrading many to E5, or scenarios with versus without certain add-ons (such as security packages or Copilot). Price out each option so you know which mix best fits your needs and budget.
- Benchmark pricing: Research typical pricing and discounts for companies like yours. You should have target numbers based on market data or past deals. If Microsoft provides an initial quote, compare it to your benchmarks and flag any items that appear unusually high. Also factor in Microsoft’s 2025 pricing changes (e.g., removal of volume discounts) so you can negotiate around those.
- Plan for cloud and AI: Decide how you’ll handle the significant offers Microsoft might present (such as a large Azure commitment or adding Microsoft 365 Copilot). Determine if you’d pilot these in a limited way or hold off for now. Having your stance ready means you won’t be caught off guard by upsell attempts.
3 Months Out — Negotiation Positioning
- Finalize your “ask” list: Write down exactly what you’ll request from Microsoft. Include target discounts on key products, any price caps or fixed pricing, and special terms you need (e.g., flexibility to drop 10% of licenses if headcount falls). This ensures you cover all your priorities when negotiations begin.
- Line up alternatives: Identify fallback options in case you can’t get a satisfactory deal. Could you extend the current agreement briefly? Move some users to another platform? Let Microsoft sense (tactfully) that you have options. A credible plan B keeps pressure on them to offer a fair deal.
- Align leadership: Ensure executives are fully on board with the plan. Brief the CIO, CFO, and other key leaders on your strategy and its limitations. That way, Microsoft hears a single, united message from your organization. They won’t find any internal division to exploit.
Pre-Renewal License Audit for Microsoft EA Negotiations
Final 30 Days — Locking in the Right Deal
- Resist sales pressure: In the final stretch, Microsoft will push to close fast (with “sign by this date” offers). Stay patient and evaluate the deal on its merits. Don’t let their quarter-end rush force you into a subpar agreement. If needed, be willing to wait — their urgency is a sales tactic.
- Secure protections: Push for terms that safeguard you over the next 3 years. Lock in any discounts for the full term and cap any price increases. If you’re adding new services (like Azure commits or Copilot licenses), include provisions to adjust if your needs change. These measures prevent surprise costs later.
- Double-check the paperwork: Before signing, verify that the contract accurately reflects everything agreed upon. Ensure pricing and discounts are accurate and that any special terms (such as flexibility, caps, etc.) are clearly stated. It’s easier to fix mistakes now than after signature, so review everything carefully. Then sign the renewal a few days before expiration to avoid any gap.
Consider this: Evaluating Microsoft EA Renewal vs Alternative Options.
Example Timeline in Action — A Prepared Renewal vs a Reactive One
Proactive Example:
One company began planning 12 months in advance and reaped significant benefits. They eliminated a lot of shelfware, avoided unnecessary E5 upgrades, and entered negotiations with data and alternatives on hand. Microsoft, seeing this preparation, offered bigger discounts and flexible terms. The company ultimately saved millions with a deal tailored to its specific needs.
Reactive Example:
Another firm waited until the last minute to focus on renewal. With no usage analysis, they let Microsoft dictate the terms — upgrading everyone and adding new products at Microsoft’s pricing. After signing, they discovered many of those features went unused, yet they were locked into a pricey three-year deal—a costly lesson in overspending.
Make sure you Evaluating Microsoft EA Renewal vs Alternative Options
Renewal Timeline Checklist (Quick Reference)
- ✅ 12 months out: Build your team, audit licenses, set goals.
- ✅ 9 months out: Clean up licenses; eliminate shelfware.
- ✅ 6 months out: Benchmark pricing; plan scenarios.
- ✅ 3 months out: Finalize strategy; have plan B ready.
- ✅ 30 days out: Close on your terms (best pricing and terms).
FAQ
When should I start preparing for EA renewal?
Ideally, about 12 months before your EA expires (at a minimum of 6 months). A year gives you time to audit, plan, and build leverage. If you wait until only a month or two remain, you’ll have very little time and may end up stuck with whatever Microsoft offers.
Can I negotiate without starting 12 months out?
Yes. You can still negotiate even if you didn’t start a year early – it’s just harder to get a great deal when you begin late. With only a few months left, you won’t have as much usage data or backup options, so you’re more likely to settle for Microsoft’s terms. Even if time is short, push for the best terms you can instead of simply signing the first offer.
What’s the biggest mistake enterprises make?
Waiting too long to start the process. Last-minute planning leads to rushed decisions and often means you renew services you don’t need or accept Microsoft’s upsells without question. Skipping the license audit is another major misstep – it means you’ll continue to pay for shelfware. In short, lack of preparation is the costliest error.
How do I align IT and procurement for renewal?
Get them working together from the start. Establish a joint team or schedule regular meetings with IT, procurement, finance, and other key stakeholders. Agree on shared goals (like staying within budget while meeting key needs). Encourage IT to share usage data and requirements, and procurement to share cost constraints and negotiation plans. When IT and procurement present a united front, Microsoft gets one consistent message (with no easy way to play one side against the other).
How can early prep save real money?
By cutting costs upfront and improving your negotiating position. Cleaning up unused licenses early means you’re not paying for them again – often saving a large amount right off the bat. With more lead time, you can also negotiate better discounts since you’ve done your homework and have options. And you won’t be pressured into buying “shiny” add-ons you don’t need. Overall, early preparation can save hundreds of thousands (even millions) of dollars compared to a last-minute renewal.
