Reducing Microsoft Enterprise Agreement Costs: Practical Strategies for Savings

Reducing Microsoft Enterprise Agreement Costs: Practical Strategies for Savings

Microsoft Enterprise Agreement (EA) costs can spiral out of control without tight oversight. Bundled products, changing pricing models, and unused licenses often leave enterprises paying far more than necessary.

This playbook offers proven Microsoft EA cost optimization strategies to reduce waste, right-size licenses, and negotiate more favorable terms. The goal is to reduce Microsoft EA costs while preserving the flexibility and value your business needs.

The insights below – from cleaning up “shelfware” licenses to leveraging negotiation timing – have helped organizations achieve double-digit percentage savings on their EA renewals in 2025.

Why Microsoft EA Renewals Are Cost Traps

Enterprise Agreements are meant to simplify licensing, but they can become cost traps at renewal time.

Several factors contribute to unexpected cost growth in EAs:

• 2025 Pricing Shift – No More Volume Discounts: Microsoft is flattening volume licensing discounts for online services. Starting in November 2025, automatic tiered discounts (Levels B–D) will be eliminated; all customers will pay the Level A (list price) by default. This pricing “simplification” means large enterprises lose the built-in bulk discount they used to enjoy. A renewal after this change can sharply increase costs unless you proactively negotiate or adjust your approach.
• Bundled Scope Creep: Over a 3-year EA term, it’s easy to accumulate products and seats that sounded useful but ended up underutilized. Microsoft’s bundles (such as Microsoft 365 E5, which includes security, compliance, and analytics) often result in paying for unused features and licenses. For example, an EA might include company-wide access to a tool like Power BI or Teams Phone System, even if only a fraction of employees actively use it. This scope creep means wasted spend on shelfware.
• Inflexible Commitments: The EA model encourages committing to a set number of licenses for the term. If your organization’s needs shrink (e.g., layoffs or project cancellations), you may be stuck overpaying for unused capacity until the next renewal. Similarly, Azure consumption commitments can result in “prepaid” cloud spend that isn’t fully utilized, leading to a wasted budget.
• Unified Support Cost Tie-Ins: Microsoft often ties its Unified Support fees to a percentage of your EA spending. If you renew your support co-terminus with the EA, any increase in licensing costs will also automatically raise your support costs. Without careful separation or negotiation, support can become an escalating line item that tracks the growth of your EA spend.

The combination of these factors can turn a routine EA renewal into a budget breaker. Below is a summary of common EA cost leak areas and their estimated impact:

As the table shows, the potential waste is significant. The good news: each of these leaks is avoidable. The following steps outline how to systematically cut Microsoft Enterprise Agreement spend and lock in savings.

5 Strategic Steps to Reduce Your Microsoft EA Costs

Reducing EA costs requires a combination of license housekeeping, Azure optimization, savvy negotiation, and strategic planning.

Here are five practical steps to trim the fat from your Microsoft EA and achieve substantial savings:

Step 1 — Clean Up License Waste

Audit and identify shelfware:

Start by thoroughly auditing your current license usage. It’s common to find that a sizable chunk of purchased licenses is not being used at all or is underutilized.

For instance, many enterprises discover that 15–25% of their Microsoft 365 seats are either unassigned, allocated to former employees, or assigned to users who never log in. These idle licenses (also known as “shelfware”) represent pure overspend.

Leverage admin portals and reports for Microsoft 365, Teams, Power BI, Dynamics, etc., to see active users and feature usage. Tools like Microsoft’s usage analytics or third-party software asset management solutions can help pinpoint which licenses or subscriptions have little or no activity.

Reclaim or reallocate unused licenses:

Once you’ve identified unused licenses, take action. Plan to true-down these licenses at your next renewal – in other words, remove them from your EA so you’re not paying for them in the future. If some licenses are only lightly used or assigned “just in case,” consider reclaiming them now and reassigning to users who genuinely need them.

For example, if you have 500 Visio Pro licenses but only 50 active monthly users, you can likely reduce the number of licenses to 450 in the renewal. Similarly, if 300 employees have an expensive Power BI Pro license but usage data shows only 100 ran reports in the last 90 days, reduce that count and save. Every license you drop is an immediate cost savings.

Downgrade over-provisioned users:

Not everyone needs a top-tier E5 license. Analyze whether users with Microsoft 365 E5 are using the advanced features that come with it (like advanced security, compliance, Power BI, audio conferencing, etc.). If not, downgrade them to E3 or E1/F3 licenses that better match their needs.

The price difference is significant – E5 can cost around $57 per user/month, whereas E3 is roughly $36, and an F3 (frontline) license is about $10. That means E5 is about 60% more expensive than E3. By downgrading, say, 1,000 users from E5 to E3, an enterprise could save approximately $21 per user per month, totaling around $252,000 over a three-year term for those licenses. License cleanup and right-sizing are usually the single biggest levers for immediate EA savings. It ensures you’re not overspending on unused capacity or deluxe features that provide no value in practice.

True-down before renewal:

Most EA customers can only adjust (true-down) their quantities at the renewal (or annually if on an EA Subscription). Mark this on your calendar: a few months before the EA end date, finalize the reduced counts you plan to renew. Don’t let inertia roll your existing numbers forward.

By proactively retiring or reducing underutilized products now, you avoid carrying that waste into the next agreement. For example, one company that meticulously cleaned up its licensing realized it could remove 10% of its E5 seats and a handful of seldom-used Dynamics 365 modules at renewal – leading to millions in savings over the new term. In short, license cleanup and rationalization should be the first step in any EA cost reduction plan.

Step 2 — Optimize Azure and Reservation Commitments

Many enterprises spend a large (and growing) portion of their Microsoft budget on Azure cloud services.

This is another area ripe for cost optimization within your EA:

Review Azure consumption vs. commitment:

If your EA includes an Azure monetary commitment (e.g., you committed to spend a certain dollar amount on Azure annually or over 3 years), compare it to actual usage. Are you consistently under-consuming the commitment?

For instance, if you committed to $1 million of Azure per year but only used $800,000, you’re leaving $200,000 of value on the table each year – effectively a waste of 20%.

In the next renewal, reduce the Azure commitment to a realistic level to avoid overpaying. Conversely, suppose you regularly exceed your committed amount and pay higher overage rates. In that case, that’s a sign to negotiate a bigger commitment (or better discounts) to cover your known usage at a lower unit cost.

Maximize reserved instances and savings plans:

Azure offers substantial discounts for reserving resources or using Azure Savings Plans. These require up-front commitment to use certain compute or database capacity for 1 or 3 years, but can cut costs by 20–60% compared to pay-as-you-go rates. Analyze your Azure workloads – which VMs, databases, or services run 24/7 or are steady in usage? Purchase Azure Reserved Instances (RIs) or apply a Savings Plan for those predictable workloads. This way, you’re utilizing your EA Azure spend more efficiently.

Many companies find that they can trim thousands of dollars per month by converting their always-on resources to reserved pricing. Just be careful to size reservations properly; overcommitting on RIs that you don’t use fully is another form of waste. Adjust reservations as needed (Microsoft now allows some flexibility in exchanging or canceling RIs).

Combine EA with CSP for flexibility:

Don’t feel obligated to put every last Azure (or Microsoft 365) subscription on the EA if it’s not advantageous. A split strategy can yield both cost savings and flexibility. For example, keep your core, predictable Azure workloads under the EA (to leverage any negotiated discounts or to draw down your commitment), but consider using the Cloud Solution Provider (CSP) program or a Microsoft Customer Agreement (MCA) for certain projects or variable workloads. CSP is a month-to-month model offered through a reseller, allowing you to scale down or cancel at any time.

If you have a short-term development project or a fluctuating need, running it via CSP ensures you pay only for actual usage and aren’t locked into a 3-year commitment for that portion. Similarly, some companies move non-production or experimental workloads to CSP accounts for agility, while keeping production under EA.

The key is to mix and match: use EA where you get cost advantages on committed spend, and use CSP/MCA where you need month-to-month flexibility or where a partner can offer a better deal. Now that Microsoft’s volume pricing is flattening, CSP offers might even come in lower than EA for equivalent services, so it’s wise to compare.

Optimize your cloud usage:

Ultimately, pure cost management within Azure itself is crucial. Rightsize VMs, eliminate orphaned storage, shut down dev/test resources when not in use – all the good cloud governance practices – so that your Azure consumption is efficient.

An optimized Azure environment means you can potentially commit less and save more. Tie this back to EA by ensuring any Azure credit or commitment you negotiate aligns with the trimmed, efficient usage level, not a bloated one.

Remember, every dollar of Azure not wasted is a dollar you don’t need to purchase from Microsoft in the first place.

Step 3 — Negotiate the Best Terms in Your EA

When it comes to EA renewals, how you negotiate is as important as what you negotiate. After cleaning up your usage, negotiation is where you lock in the savings. Here are key tactics:

Start early (9–12 months in advance):

Time can be your ally. Don’t wait until the last minute to engage with Microsoft on your renewal. Initiating the process 9-12 months before your EA expiration gives you time to explore options, solicit competitive proposals, and methodically build leverage.

More importantly, it allows you to plan your renewal around Microsoft’s sales timeline. Microsoft’s fiscal year ends on June 30, and their sales teams face quarterly and annual quotas. By starting early, you can aim to have your deal ready to close at a strategically opportune time (for example, in Microsoft’s Q4, April–June, or even Q2/Q3 if your company’s year-end is December).

Vendors offer the deepest concessions when they’re hungry to close the sale – leveraging Microsoft’s fiscal urgency can translate into better discounts or extras for you. Early negotiation also means you’re not cornered into accepting a bad deal due to time pressure as the deadline looms.

Secure multi-year price protection:

Cloud service prices and Microsoft’s list rates have a history of creeping up annually. During negotiation, insist on price protection for the full EA term. This can be in the form of fixed pricing (each product locked at today’s price for 3 years) or, at the very least, capped year-over-year increases (e.g., no more than a 5% increase per year).

Do not accept vague language about “prevailing rates” in years 2 and 3 – nail down the costs to the extent possible. If Microsoft announces a general price hike or currency adjustment, having your pricing fixed in the contract insulates your budget.

Multi-year rate locks or caps give you predictability and prevent unwelcome cost surprises mid-term.

Push for true-down and swap rights:

A standard EA often locks you into a quantity for the term, but savvy customers negotiate flexibility clauses. True-down rights allow you to reduce license counts mid-term (or at least at the anniversary) under certain conditions. For instance, if your company divests a business unit or undergoes layoffs, a true-down clause could let you decrease those 1,000 licenses instead of paying for unused subscriptions until the end. Microsoft may not grant an unlimited ability to reduce, but even a one-time adjustment or the ability to drop a certain percentage of licenses can be hugely valuable.

Additionally, seek the right to flexibly reassign or swap licenses as needs change.

This might mean the ability to convert some license allocations to different products of equivalent value if your strategy shifts (for example, trading a portion of Office 365 licenses for Dynamics 365 licenses mid-term, or swapping from one Microsoft 365 plan to another as roles change).

At a minimum, ensure that you can reallocate licenses between users freely (which is generally allowed) and that if you need to introduce a new product, you can adjust your mix without incurring a penalty.

The overarching principle is to avoid getting locked into paying for something you don’t need for three years – bake as much flexibility into the contract as you can.

Negotiate beyond the sticker price:

With volume tier discounts disappearing, you’ll need to negotiate explicitly for any desired discount. Treat Microsoft’s initial pricing as a starting point. Come armed with benchmarks – if you know peers or have consultants who can share what similar organizations pay, use that data.

It’s not uncommon for large enterprises to achieve 15-30% off list prices on major components of the EA through skillful negotiation. Microsoft reps won’t lead with their best offer, so you have to ask and push. Be prepared to justify why you deserve a better price (e.g. commitment to Microsoft’s cloud, willingness to be a reference, consideration of moving workload to a competitor, etc.).

Also, negotiate the terms, not just unit prices: for example, include a “most favored customer” clause if you can (so you get price protection if Microsoft gives a bigger discount to another similar client), or ensure the agreement includes deployment planning days, training credits, or other value-adds at no cost. All these enhance the deal without increasing your spend.

Step 4 — Avoid Costly Renewal Pitfalls

As you navigate the renewal, beware of common pitfalls that can undermine your cost-saving efforts:

Separate Unified Support from the EA:

Microsoft will often present an EA renewal quote that bundles Unified Support (the Premier/Unified support contract) to co-terminate with your EA. This is convenient for them, but it can be costly for you.

Unified Support is typically priced as a percentage of your total Microsoft spend – often in the high single digits or more. If you roll it into the EA, any growth in licenses or services automatically inflates support costs. Instead, decouple support from the EA renewal. Negotiate your support contract separately and possibly on a different timeline.

This provides you with the flexibility to adjust support levels or switch to alternatives as needed. Some companies leverage third-party support providers or negotiate a reduced support scope to save money.

By splitting it out, you ensure that a hard push from Microsoft to “just renew everything together” doesn’t lock you into paying an ever-growing support bill tied to your EA size. You may find that you can save 20% or more on support costs by right-sizing or competitively sourcing it once it’s no longer automatically tied to your license spend.

Resist forced upsell features:

Microsoft’s sales strategy often includes bundling flashy new products or features into its renewal. In 2024–2025, for example, Microsoft 365 Copilot (the new AI assistant suite) is a hot add-on they will try to upsell broadly, at roughly $30/user.

Similarly, there are niche Azure services or advanced security add-ons that Microsoft may position as “you should just add these for all users in your EA.”

Be very cautious about any large-scale upsell if the adoption or business value is unproven. It’s perfectly fine to pilot new technologies like Copilot or Azure AI services – in fact, doing a limited pilot is smart – but do not commit enterprise-wide licenses for them right out of the gate. The cost can be enormous, and if your users don’t end up using it, you’ve paid for another bundle of shelfware.

Push back on upsells by asking for evidence of value, and if interested, consider negotiating a small-quantity pilot program instead of a full commitment.

Often, Microsoft offers a discounted or free trial period for new products. Take advantage of that rather than pouring millions into a company-wide deployment of something not yet vetted.

Use role-based licensing, not one-size-fits-all: A classic overspending mistake is taking a blanket approach to licensing – for example, renewing 5,000 E5 licenses just because “that’s what we did last term.” Instead, adopt role-based licensing segmentation. Different groups of users have different needs: many information workers might only require the standard Office 365 E3 feature set; frontline workers might need even more limited F3/E1 licensing; only specific roles (IT admins, data analysts, executives dealing with sensitive data) might truly need the full E5 suite with advanced security, telephony, and BI.

By matching license levels to roles, companies can avoid purchasing expensive capabilities for individuals who won’t utilize them. This tailored approach was likely part of your Step 1 cleanup, but it’s worth emphasizing during renewal negotiations. Insist on the flexibility to purchase a mix of license types and adjust counts per type.

Microsoft often encourages organizations to go “all-in” on top tiers, but you have every right to tailor the mix to your specific needs. For example, you might renew with 1,000 E5, 3,000 E3, and 2,000 F3 licenses instead of 6,000 E5s across the board. The savings from such an approach are huge, and it aligns spending with actual usage.

Don’t auto-renew without scrutiny:

Lastly, a general pitfall – never treat an EA renewal as just a paperwork exercise. Microsoft will gladly have you sign a renewal that mirrors your old agreement, plus some nominal growth, but that usually incorporates all the existing inefficiencies and then some.

Always approach renewal as a renegotiation and rebid opportunity. Even if you intend to stay with Microsoft for all services, act as if you have choices (because you do – from alternative licensing programs to competing products for certain workloads).

Scrutinize every component and question its necessity. This mindset prevents the complacency that often leads to 10–20% cost creep every renewal cycle.

Step 5 — Bundle Smartly, Benchmark Wisely

Bundles and benchmarks can be two powerful tools to reduce EA costs when used to your advantage:

Leverage bundle deals strategically: Microsoft, at times, offers incentive bundles – e.g., if you adopt Product X, they’ll give you a better price on Product Y. Rather than blindly accepting Microsoft’s bundles, flip the script and bundle on your terms. Identify lower-value items you might be willing to add in exchange for savings on higher-value ones. For instance, you might say, “We’ll commit to a small rollout of Microsoft 365 Copilot for 500 users as a pilot, but in return, we want a 15% discount on all our Office 365 E3 licenses.” You’re giving Microsoft something they want (a new product adoption story) in exchange for what you want (cost reduction on your core).

The key is to bundle small, manageable add-ons that won’t break your budget, but which Microsoft sees as strategically important. By packaging these into the negotiation, you can extract broader concessions. This approach turns bundling into a cost-saving tactic rather than a cost-increase trap.

Benchmark against peers and alternatives:

It’s vital to benchmark your EA offer. Microsoft’s pricing can be opaque, and with the removal of standard volume discounts, you need to validate that the deal you get is in line with market reality. Utilize any available data points – such as other enterprises in your industry or licensing advisors familiar with typical discount ranges. If you discover that companies of similar size are paying 20% less for certain licenses, you can go back to Microsoft with that information. Additionally, consider competitive alternative quotes as leverage.

For example, large organizations sometimes evaluate moving certain workloads to Google Workspace or AWS just to have a negotiating chip. Even if you won’t switch, having a credible alternative quote or strategy can pressure Microsoft to improve its offer.

Similarly, get quotes from CSP resellers for the same licenses – now that Level A pricing is the baseline, a CSP might offer, say, 5% off on M365 seats to win your business. Microsoft’s direct sales team would often rather match or beat that than lose the seat count.

Use these external benchmarks to ensure you’re not overpaying simply because you didn’t ask what others are paying.

Watch the 2025 discount removal impact:

A special note on timing – if your renewal is after November 2025, be very vigilant about the loss of automatic Level B-D discounts. If you previously enjoyed a 15% discount, for example, as a Level D member, please note that your renewal quote may be at the full list price. However, Microsoft can still provide discretionary discounts; it’s just no longer automatic. So in your negotiations, explicitly bring up this point: “With the pricing changes, we expect an equivalent discount to what our volume earned us before.”

If you don’t, you risk a substantial jump in cost per license. In short, hold Microsoft accountable for the fact that pricing “consistency” shouldn’t mean loyal big customers pay more – you need to negotiate that buffer back in.

Use third-party and multi-channel leverage:

Beyond pricing, leverage independent options. For support, as mentioned, third-party providers (for example, certified Microsoft support partners) can sometimes deliver the needed help at a fraction of the cost of Microsoft’s Unified Support.

Getting a quote from such a provider and being willing to use it can either save you money directly or give Microsoft an incentive to adjust its support pricing to keep you.

Likewise, if certain niche Microsoft products are expensive, consider whether a third-party software could replace them – and mention that in discussions. Even if you plan to stick with Microsoft’s solution, the mere possibility of losing that portion of business can strengthen your negotiating hand.

By bundling smartly and benchmarking wisely, you ensure you’re not blindly accepting Microsoft’s first offer but instead crafting a deal that reflects competitive market rates and your specific business priorities.

Example Scenario — Achieving a 20% EA Cost Reduction

To illustrate these strategies in action, consider a hypothetical enterprise – ACME Corp – facing an EA renewal. ACME has 10,000 users and a substantial Microsoft footprint, including Microsoft 365, Dynamics 365, and Azure. Their annual EA spend before optimization is $15 million.

By applying the above steps, here’s how they slashed costs:

• License Cleanup and True-Down: An audit revealed 1,000 unused or underused M365 licenses across the company (some E5s assigned to employees who left or never used E5 features). ACME also identified that 30% of their users assigned E5 could be perfectly well-served with E3. Before renewal, they eliminated those 1,000 stray licenses and downgraded 2,000 E5 users to E3. These actions reduced their Microsoft 365 bill by approximately $1.2 million per year – a roughly 15% drop in the M365 category of spend.
• Azure Optimization: ACME was committing $5M/year to Azure but using only about $4.5M due to overestimating certain projects. They rightsized the commitment to $4M for the new term (with flexibility to pay-as-you-go if they exceed it) and heavily adopted Reserved Instances for their steady workloads. This change saved them an estimated $ 500,000 per year in Azure costs by eliminating paid-but-unused capacity and leveraging 1-3 year RI discounts on 60% of their VMs. They also moved a small testing environment to a CSP subscription, which, at a slightly higher unit rate, still saved money because it could be shut down on demand.
• Negotiation Wins: Starting negotiations 12 months early, ACME signaled to Microsoft that they were considering splitting their productivity suite between Microsoft 365 and Google for some users, and moving certain cloud workloads to AWS. They leveraged Microsoft’s fiscal year-end to strike a deal. Microsoft offered an overall 15% discount on M365 licenses (to keep Google out) and provided $ 200,000 in Azure credits to discourage any move to AWS. ACME also negotiated a price lock: a 0% increase on all user licenses for 3 years, along with a clause allowing a 5% true-down of seats at the 18-month mark if business conditions changed.
• Avoiding Upsells & Splitting Support: Microsoft was eager to sell ACME on a company-wide Microsoft 365 Copilot and a new Dynamics module. ACME instead agreed to a pilot purchase of 300 Copilot licenses for one department, with an understanding that a broader rollout would be considered next year if ROI is shown. In exchange, Microsoft provided the pilot at 50% off for a six-month period. ACME also took Microsoft’s Unified Support out of the EA package. By bidding out and negotiating separately, they reduced their annual support fee by 25% (choosing a Standard support plan aligned to their needs rather than the default comprehensive plan).

After these measures, ACME Corp’s new EA came in around $12 million per year, down from $15 million – roughly a 20% cost reduction. Over the 3-year term, that’s $9 million saved. Equally important, the new agreement is more flexible and better aligned with actual usage, making future savings and adjustments easier.

Microsoft EA Cost Reduction Checklist

To ensure you capture all possible savings, use this EA cost reduction checklist as you prepare for renewal:

☐ Conduct a detailed usage audit across Microsoft 365, Dynamics 365, Azure, etc. Identify unused licenses, underutilized services, and consumption patterns.
☐ Reclassify or retire underutilized licenses ahead of renewal. Plan to drop shelfware and downgrade users who don’t need premium licenses (e.g., E5 → E3).
☐ Maximize Azure savings by reviewing cloud usage. Purchase reserved instances or savings plans for steady workloads, and adjust any overcommitted Azure spend.
☐ Negotiate price protections and flexibility: Lock in multi-year pricing or caps on increases. Push for the right to reduce licenses or swap products if needed.
☐ Separate Unified Support from the EA to negotiate support on its terms. Right-size the support level or consider third-party support to save costs.
☐ Pilot new features instead of full commitment: Avoid costly enterprise-wide add-ons (like Copilot or advanced analytics) until proven. Do small pilots to evaluate value first.
☐ Time your renewal for leverage: Plan negotiation timelines to coincide with Microsoft’s end-of-quarter or fiscal year-end, when they are most motivated to deal.

This checklist serves as a quick action plan to eliminate waste and secure a leaner, smarter Microsoft agreement.

5 Recommendations for Immediate Impact

If your organization is aiming to trim Microsoft costs, don’t wait for the next renewal to get started.

Here are five high-impact actions you can initiate right now:

1. Start Early – Prep 12 Months Before Renewal: Proactively preparing a year in advance gives you time to gather data, explore alternatives, and build negotiation leverage. Mark your calendar and assemble a team to begin the EA review well in advance of the expiration.
2. Audit and Right-Size Your Licenses Now: Do a thorough license utilization review and start cleaning up immediately. Eliminate or reassign any unused licenses this quarter – there’s no reason to pay for oversubscription even one more month. Initiate a program to align license levels with user roles, so you’re not overspending on features people don’t use.
3. Engage with Microsoft (and Alternatives) on Pricing: Initiate a dialogue with your Microsoft account team to discuss your concerns regarding costs. In parallel, talk to a few Cloud Solution Provider partners or other vendors. Getting quotes and understanding market options will either give you negotiating leverage or actual cheaper avenues. Signal to Microsoft that you are seeking the best value, whether within or outside the EA – it will encourage them to present creative solutions and discounts.
4. Decouple and Reevaluate Support: If you’re under a Unified Support agreement, analyze your support usage and costs. Consider negotiating a reduction in scope or switching to a third-party support provider for a portion of services. At a minimum, plan to separate the support renewal from the EA. This move can immediately save a significant portion of your spend (often support accounts for 10% or more of your EA costs) and enhance your flexibility.
5. Build EA Cost Optimization into IT Governance: Make cost optimization an ongoing discipline, not a one-time project. For example, establish a quarterly process to review license assignments and Azure spending. Ensure that whenever employees leave or change roles, their licenses are adjusted promptly. Establish an internal policy that requires any new Microsoft product adoption to undergo a cost-benefit analysis. By embedding these practices, you continuously keep costs in check and avoid the end-of-term fire drill.

By implementing these steps, you can start reducing waste and establishing a culture of cost-conscious license management well before the big renewal arrives. Early gains will compound, and you’ll enter your next EA negotiation from a position of strength.

FAQ

Q: What drives unexpected EA renewal cost growth?
A: Several factors can cause EA costs to jump at renewal. One is unchecked license creep – if you never removed licenses for departures or downsized plans for lesser-used features, you might be renewing more licenses than you use. Another driver is Microsoft’s pricing changes, such as the removal of volume discounts after November 2025, which can raise the baseline price you pay. Additionally, accepting new product add-ons or bundles without vetting usage can inflate your spend. Lastly, escalator clauses (annual price increases built into the EA) can compound over a three-year period. All these underscore the need for a careful review and negotiation to prevent unexpected increases.

Q: How much can we save by doing a true-down versus a blanket renewal?
A: It varies, but organizations that perform a thorough true-down (rightsizing to actual needs) often see savings on the order of 10–20% or more on their EA. For example, if you identify that 15% of your licenses are unused and you remove them, that’s a direct 15% cost reduction on those products. If you also downgrade a portion of users to cheaper license tiers, you add further savings. In contrast, a “blanket renewal” that just extends all current licenses will carry forward all the inefficiencies. In dollar terms, even a 10% reduction on a $10 million annual EA is $1 million saved per year. True-downs ensure you only pay for what you need, which is the simplest path to significant savings.

Q: Will removing the automatic discount tiers after Nov 2025 drastically raise our costs?
A: If your organization previously benefited from a higher price level (B, C, or D), the removal of those volume discount tiers can increase your costs unless you take action. For instance, Level D pricing might have been 15-20% lower than the Level A list price. Without that automatic discount, a renewal quote could indeed come in at 15-20% higher unit prices. This represents a significant potential cost increase for large enterprises. However, you are not without recourse: you can negotiate custom discounts with Microsoft to mitigate or even eliminate the difference. The key is awareness – don’t assume your old pricing will carry over. Come prepared to push for similar (or better) discounts as a discretionary deal. Also, explore CSP quotes as a sanity check; if a reseller is willing to give you a better rate, use that in your negotiation. In short, yes, the policy change could increase costs, but savvy negotiation can help offset them.

Q: Can splitting Unified Support from the EA save money?
A: Yes, in many cases it can. Unified Support is often priced based on a percentage of your total Microsoft spend, so as your total spend increases, support costs also automatically rise. By splitting it out, you can treat support as its contract and scrutinize it independently. Many companies find they can reduce support coverage to what they use – for example, maybe you don’t need 24/7 problem resolution on every product, or you can opt for a lower tier for certain services. You might also solicit bids from third-party support firms for things like Office 365 or Azure environment support – some providers claim to cut costs by 30-50% versus Microsoft’s price. Even if you stick with Microsoft, negotiating support separately often yields concessions (e.g., credit for unused support hours, adjusted pricing if your EA spend drops, etc.). The main benefit of not co-terming support with the EA is flexibility: you gain the freedom to adjust or switch support annually based on needs, which can save money over the static, percentage-based approach.

Q: Should we push for Copilot (and other new features) as pilots instead of full commitments?
A: Absolutely. For any new, unproven, or not yet widely adopted product (like Microsoft 365 Copilot in 2025), a pilot approach is wise both financially and practically. By starting with a pilot (say, a few hundred users or a specific department), you limit your spend while evaluating the real-world value. This prevents a scenario where you commit to, for example, 5,000 Copilot licenses at $30 each per month – a huge cost – only to find six months later that hardly anyone is using the AI features to their full potential. Beyond cost containment, pilots provide you with data and user feedback to determine if an enterprise-wide rollout is worthwhile. Microsoft is often amenable to pilot programs; they may even provide promotional discounts or support for them, as they want you to eventually scale up. From a negotiation standpoint, opting for a pilot can be used as a bargaining chip (“We’ll try X product on a small scale, but we need better pricing on Ycore product in return”). In summary, piloting new features helps avoid overspending on hype and ensures that, if you do invest at scale, it’s based on proven value and adoption within your organization.

Related articles

• Eliminating Shelfware in your Microsoft EA
• Optimizing Cloud Spend Within Your EA.
• Leveraging Promotions and Incentives in Microsoft EA
• Microsoft EA Term Length Strategy for Cost and Flexibility

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