Introduction – The Renewal Dilemma
Your Microsoft Enterprise Agreement (EA) is coming up for renewal. Should you simply renew it, or rebid and explore alternatives? Renewing means signing on for another three-year commitment with Microsoft.
Rebidding means going to market for other options – whether that’s a different Microsoft licensing program (like CSP or the newer MCA) or even non-Microsoft solutions. Read our guide to Microsoft Renewal Negotiation: How to Cap Price Uplifts and Secure Discounts.
Rebidding forces you to ask: “Is our current EA still the best fit, or could a different approach serve us better?”
The path you choose will lock in your spending and capabilities, so it’s worth carefully weighing whether to stick with the status quo or chart a new course.
When Renewal Makes Sense
There are scenarios where renewing your Enterprise Agreement is the smarter move:
- High Microsoft usage: If your organization is heavily using Microsoft’s core services (e.g., Office 365 across all users, and significant Azure workloads), an EA often maximizes value. Being “all-in” on Microsoft means you benefit from the EA’s volume discounts and comprehensive coverage for your whole enterprise.
- Valued EA-only benefits: Enterprise Agreements come with perks via Software Assurance and other programs (like version upgrades, license mobility, or dedicated support arrangements). If your organization relies on these enterprise-grade benefits and services, sticking with an EA ensures you retain them.
- Strong existing discounts: If your current EA was negotiated with steep discounts or price protections, renewing helps preserve those favorable terms. Moving to a different licensing program would likely reset your pricing to higher rates, so keeping the EA maintains your advantageous deal.
- Simplified compliance: An EA puts all your Microsoft licensing under one umbrella. You have a single contract covering all users, thereby reducing the risk of licensing gaps or audit surprises. This one-and-done approach greatly simplifies license oversight.
When to Consider Switching
In other cases, it might be time to rebid and explore alternatives to an EA:
- Reduced size or scope: If your user count has dropped below the EA program’s minimum (typically 500 seats), an EA no longer makes sense. Smaller organizations often save by switching to a Cloud Solution Provider (CSP) model where no minimums apply.
- Need for flexibility: If you anticipate frequent changes in headcount or service usage, a rigid 3-year agreement can lead to overspend (paying for licenses you no longer need). Switching to a monthly or annual subscription model, such as CSP, allows you to scale up or down quickly and pay only for what you use.
- Azure-centric needs: If most of your Microsoft spend is in Azure, the Azure-only Microsoft Customer Agreement (MCA) could be a better fit. MCA lets you pay for Azure as you go, instead of maintaining a full EA for cloud usage.
- Unfavorable renewal offer: If Microsoft’s proposed renewal comes with a hefty price increase or weaker discounts than expected, it’s a clear signal to evaluate alternatives. It’s worth seeing if another program or provider can offer a better value.
- IT strategy shift: Major strategic changes (like a cloud-first policy, a divestiture, or plans to diversify vendors) can also make an EA less optimal. In such cases, a more flexible mix of solutions or multiple smaller agreements might fit your new direction better.
Stay away from these, Microsoft Renewal Negotiation Pitfalls: 5 Mistakes to Avoid.
Options to Evaluate
If you decide not to renew the EA, here are the main alternative paths to consider:
Option 1: Switch from EA to CSP
Moving from an EA to Microsoft’s Cloud Solution Provider program means buying your licenses and cloud subscriptions through a certified reseller partner instead of directly from Microsoft.
The big advantage of CSP is flexibility. There’s no three-year lock-in – you can adjust license counts as needed (often month-to-month) and pay only for what you actually use. Many organizations with fluctuating needs prefer this agility.
The trade-off is potentially a higher cost per unit and fewer built-in perks. Without an EA’s volume pricing, you might pay closer to standard rates in CSP. Pricing isn’t locked long-term, so Microsoft could raise subscription prices during your term.
Also, some benefits tied to an EA’s Software Assurance (like certain upgrade or hybrid-use rights) may not be included in CSP licenses. CSP is generally best suited for mid-sized or rapidly evolving companies that prioritize agility over the absolute lowest cost per license.
Option 2: Switch from EA to an MCA (Azure-Only Agreement)
Another route is to shift your cloud services to a Microsoft Customer Agreement (MCA) – Microsoft’s modern direct agreement for cloud purchases, particularly Azure. Under an MCA, you deal directly with Microsoft and pay-as-you-go for Azure services. There’s no fixed term or minimum commitment.
For organizations heavily invested in Azure, an MCA offers simplicity. You pay only for Azure resources used, without bundling user licenses you don’t need.
However, an MCA covers only Azure (you’d need separate arrangements like CSP for Microsoft 365 or other products), and unlike an EA, it doesn’t come with built-in volume discounts – you mainly pay standard Azure rates unless you negotiate a special discount for a large commitment. MCA makes sense if Azure is your primary need and you want a straightforward, direct deal for it.
Option 3: Break Up the Microsoft Stack (No EA)
The most drastic option is not to sign a new enterprise agreement at all – essentially breaking up your Microsoft stack. You forgo a single Microsoft agreement and instead use multiple vendors or smaller subscriptions for each need.
For example, you might replace Office 365 with Google Workspace, or move some workloads from Azure to AWS, while still using Microsoft tools on a limited basis as needed. The appeal is paying only for what you need – and gaining leverage by not being dependent on one vendor.
The downside, of course, is complexity. Managing multiple vendors and integrating different platforms can strain your IT team.
You also lose some convenience and integration that come with sticking to one ecosystem. A full break-up is only realistic if your IT team is prepared for a multi-vendor strategy and has the resources to handle the added complexity.
Negotiation Angle – Using Rebid as Leverage
Even if you expect to stay with Microsoft, it pays to run a parallel rebid. Getting quotes from CSP partners or other vendors gives you concrete data to push back on Microsoft’s offer. Make sure Microsoft knows you have real alternatives.
A Credible Plan B isn’t a bluff – it forces Microsoft to take you seriously. When they see you’re prepared to walk away, they will often sharpen their pricing or add incentives to keep your business.
Renewal vs Rebid Comparison
To summarize, here’s a comparison of renewing your EA versus rebidding into a different path:
| Path | Pros | Cons | Best For |
|---|---|---|---|
| EA Renewal | Stability; keeps volume discounts and enterprise benefits | Rigid 3-year commitment; can’t reduce licenses mid-term | Large organizations fully utilizing the Microsoft stack |
| EA → CSP | Very flexible (add/remove seats as needed); pay-per-use pricing; partner provides support | No price lock (costs can change); few/no Software Assurance perks; higher per-user cost without volume discount | Cloud-first or fast-growing orgs; mid-sized enterprises needing agility |
| EA → MCA (Azure) | Azure-focused and simple; direct Microsoft relationship; no multi-year lock | Covers only Azure (need separate deals for other products); standard pricing (unless you negotiate a special discount) | Companies primarily invested in Azure services |
| Break Up the Stack | Maximum vendor flexibility; optimize each solution’s cost; strong competitive leverage | Very complex to manage (many vendors, integrations); potential disruption switching off Microsoft; no bulk discount across vendors | Organizations with a multi-vendor IT strategy and strong IT management capabilities |
FAQs
Q: Is CSP always cheaper than an EA?
A: Not necessarily – CSP’s pay-for-what-you-use model can save money, but if you have a big EA discount, an EA might still be cheaper per license.
Q: Can we switch licensing programs before our EA term ends?
A: Generally, no. Your EA binds you until it expires, so plan any program change for the end of the EA term.
Q: Does the EA still matter in 2025?
A: Yes. For large enterprises (thousands of users, including on-premises needs), the EA remains very relevant in 2025. Microsoft is phasing out EAs for smaller customers, but at the high end, it still offers the best discounts and coverage.
Q: What if Microsoft won’t budge on a poor renewal offer?
A: Use your other quotes as leverage and be prepared to walk. Microsoft often improves an offer when they see you’re ready to switch – and if they don’t, that confirms it’s time to move on.
Q: Is breaking up the Microsoft stack realistic?
A: Only if you’re truly prepared. Replacing Microsoft completely is complex, so most organizations do it partially (using some alternatives alongside Microsoft rather than eliminating it). A full break-up requires a clear multi-vendor strategy and high tolerance for complexity.
Five Expert Recommendations
- Benchmark alternatives early: Get CSP/MCA quotes before renewing your EA so you know the market price.
- Don’t renew by default: Assess whether a different licensing program (or mix of programs) would suit your current needs better.
- Use the rebid for leverage: Mention your other quotes in negotiations to pressure Microsoft for a better deal.
- Right-size your licensing: Ensure your next agreement matches your current user count and usage. (Your EA from three years ago might be oversized now.)
- Renegotiate, don’t just extend: Treat renewal as a chance to improve pricing and terms, not just rubber-stamp the old deal.
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