Evaluating Renewal vs. Alternative Options in Microsoft EA Negotiations
Why You Need a Plan B Before Renewal
Microsoft’s sales teams often assume enterprises will automatically renew their Enterprise Agreement.
But walking into a renewal negotiation without a Plan B leaves you with almost no leverage. Signaling that renewal is not the only path immediately shifts the dynamic in your favor. Read our overview on how to manage Microsoft EA renewals.
By exploring alternatives before your renewal, you put Microsoft on notice that its offer must be competitive.
If their proposal isn’t good enough, you can confidently say “no” and turn to your Plan B – a true walk-away option.
That credible backup (your negotiation BATNA) forces Microsoft to take your demands seriously, rather than dictating terms.
Never approach an EA renewal assuming you have no choice. Even if you expect to stay with Microsoft, act as if you might not.
By developing a solid Plan B, whether moving some licenses to a CSP partner or shifting certain workloads to another vendor, you inject healthy tension into the process.
Showing that you have viable options forces Microsoft to earn your business on your terms.
Option 1 — Comparing CSP vs EA
One readily available alternative to an EA renewal is Microsoft’s Cloud Solution Provider (CSP) program.
Understanding the differences between EA and CSP is key.
In short:
- Commitment & Flexibility: An EA is a fixed three-year commitment with a set number of licenses, whereas CSP is pay-as-you-go with month-to-month adjustments. EA locks you in (you generally can’t reduce licenses mid-term), while CSP lets you scale up or down as needed, paying only for what you use.
- Pricing: EAs offer volume discounts and fixed pricing in exchange for a commitment across the entire enterprise. CSP typically charges close to list prices, but since you can drop unused licenses at any time, you won’t pay for shelfware. This means CSP can end up being cheaper if your usage declines or fluctuates.
CSP may be a better fit if you expect workforce changes or uncertain needs, or if your organization is below Microsoft’s EA size threshold. The flexibility to instantly right-size licensing is valuable for companies that don’t want to over-commit.
Negotiation tactic:
Even if you prefer an EA for other reasons, obtain a CSP quote from a Microsoft partner for your current licenses and Azure usage. Bring that data to your renewal meeting – for example, “With CSP, we’d pay roughly $X per month and could shed unused licenses on the fly.”
Showing Microsoft that you have a viable pay-as-you-go option puts pressure on them. Faced with the prospect of you moving to CSP, Microsoft is more likely to counter with deeper EA discounts or more flexible terms to convince you to stay.
Plan ahead by reviewing the EA Renewal Preparation Timeline.
Option 2 — Shifting Workloads to Competing Vendors
Consider which parts of your Microsoft portfolio have viable competitors and signal that you’re evaluating them.
For example, if you run significant workloads in Azure, consider what Amazon AWS or Google Cloud can offer. If your company relies heavily on Microsoft 365, explore Google Workspace or other tools for some users.
You don’t have to leave Microsoft entirely, even letting them know you might move a portion of your spend (for example, one department or one application) to a rival will get Microsoft’s attention.
Microsoft would rather offer you discounts or add value on their side than risk you migrating that slice of business to a competitor.
Option 3 — Trimming Shelfware Through Selective Renewal
Renewal time is also your chance to shed licenses and services you aren’t really using – the infamous “shelfware.” Microsoft won’t volunteer this, but you are free to drop or downsize any products when your EA expires.
Analyze your usage data and identify what isn’t needed. By trimming the fat in this way, you immediately cut costs and send a clear message: you refuse to pay for value you’re not getting.
This selective approach (“we only renew what we use”) strengthens your negotiating position.
Microsoft will see that you’re willing to walk away from unnecessary components, which can prompt them to offer better pricing or incentives on the products you do choose to renew.
Option 4 — Extending Current EA with Short-Term Flexibility
Sometimes the best move is to buy time. If you’re not ready to commit to a new three-year EA (for example, if you’re still finalizing your IT strategy), ask Microsoft if you can extend your current EA for a short period – say 6 or 12 months.
Microsoft doesn’t advertise it, but such extensions are often negotiable.
This approach allows you to continue under existing terms for a bit longer, rather than rushing into a subpar deal.
It also signals to Microsoft that you won’t be rushed by the deadline. Microsoft would often rather grant an extension than see your contract lapse entirely.
Use the extra time to further evaluate alternatives, so that when the extension ends, you’re even better prepared to negotiate or switch if needed.
Option 5 — Using Alternatives to Unlock Discounts
The real payoff for all this effort is in the discounts and concessions you can get. When Microsoft genuinely feels competition for your account, it will often come back with a better deal.
For example, present them with a credible proposal that is 15% cheaper (whether from a CSP model or a competitor like AWS or Google). Microsoft will be under pressure to match or beat it to retain your business.
This strategy only works if your Plan B is believable, which is why gathering hard data (quotes, ROI analyses, pilot results) is so important. Present your findings calmly and factually rather than as a threat.
If Microsoft sees you have done your homework and truly might shift to an alternative, they are far more likely to sharpen their pencil and give you the kind of discounts or flexible terms you’re looking for.
Pitfalls to Avoid When Considering Alternatives
Leveraging alternatives is powerful, but you must execute carefully to avoid undermining your strategy.
Watch out for these pitfalls:
- Not validating feasibility: Make sure any alternative you mention is technically plausible – if you float a move with no homework or ability behind it, Microsoft will see right through it.
- Overplaying your hand: Don’t make exaggerated threats to leave that you can’t follow through on. Microsoft’s negotiators will detect a bluff. It’s fine to say you’re exploring options, but claiming you’ll quit Microsoft entirely (when you likely won’t) only hurts your credibility.
- Internal misalignment: All stakeholders on your side need to present a united front. Mixed signals will undermine you – for example, one team telling Microsoft “don’t worry, we’ll renew” while another talks about alternatives. Coordinate internally so Microsoft hears a consistent message: you value their products, but you are seriously considering other options.
FAQ
Q: Do enterprises leave Microsoft EAs for CSP?
A: Yes – some companies choose to forgo renewing an EA and use CSP instead, at least for certain parts of their environment. But simply having CSP as an alternative gives you leverage to get a better renewal deal.
Q: How much leverage do alternatives create?
A: A credible Plan B can greatly boost your leverage – often pushing Microsoft to offer far bigger discounts than it otherwise would. We’ve seen customers save well into the double digits (percent-wise) by entering negotiations with a strong alternative in hand.
Q: What if alternatives aren’t realistic for all our workloads?
A: They can still help. You don’t need an option for everything – even one viable alternative (for a particular application or department) gives you bargaining power. Microsoft will take that partial Plan B seriously if you’ve done your homework.
Q: Can we extend our EA while evaluating options?
A: Yes. You can often negotiate a short extension of your EA (6–12 months) if you need more time. Microsoft may agree, especially if the alternative is you going month-to-month without a contract. Just be sure to ask before your EA expires so there’s time to work it out.
Q: What’s the best timing for evaluating alternatives?
A: Start about 12–18 months before your EA expires. Big changes and thorough comparisons take time, and you don’t want to be scrambling at the last minute. Beginning early also shows Microsoft that your Plan B is well-developed, making your potential switch far more credible when negotiations begin.
