Avoiding Common Microsoft EA Renewal Pitfalls: Mistakes You Can’t Afford

Avoiding Common Microsoft EA Renewal Pitfalls

Introduction – Why Pitfalls Happen

As a Microsoft negotiation expert who’s been across the table in hundreds of Enterprise Agreement (EA) renewals, I’ve seen buyers make the same costly mistakes time and again.

Microsoft’s licensing model is deliberately complex, and the renewal process is often stacked in Microsoft’s favor if you walk in unprepared. The result? Too many organizations overpay or get locked into rigid contracts that don’t truly serve their interests.

In this article, I’ll share a candid, experience-based look at the common EA renewal pitfalls and Microsoft licensing traps that procurement teams often fall into—and how to avoid them.

Think of it as a no-nonsense field guide to help you sidestep these mistakes and negotiate an EA deal that actually aligns with your business needs.

Let’s dive into the major pitfalls you can’t afford to overlook, and how to ensure your organization doesn’t fall victim to them.

Pitfall #1: Relying on Verbal Promises

I’ve seen account managers casually promise discounts or flexibility in conversation, only to have those promises evaporate in the final contract.

Verbal assurances might make you feel comfortable, but if they’re not written into the EA, they simply don’t exist. Customers end up shocked later when they realize none of those handshake deals made it into the agreement, leaving them stuck with terms that favor Microsoft.

The fix is straightforward: get everything in writing. Insist that every concession, discount, or adjustment a rep offers is documented in the EA or an official amendment.

No matter how friendly or sincere your Microsoft rep seems, if a commitment isn’t in the contract, it’s not real, and you can’t bank on it.

Pitfall #2: Last-Minute Negotiations

Too many organizations wait until a month or two before expiration to start negotiating their EA renewal. That’s exactly what Microsoft hopes for, because a last-minute customer has minimal leverage.

If you engage late, you won’t have time to explore alternatives or thoroughly push back on terms, and Microsoft’s deal desk knows it. They’ll run out the clock, and you’ll end up cornered into accepting whatever is on the table. I’ve seen companies sign mediocre renewals simply because they felt out of time.

The remedy is to start early—ideally 9–12 months before your EA expires. This gives you time to set a strategy, get internal buy-in, and let Microsoft know you won’t be rushed into a bad deal.

If you’re already only a few months from expiration, consider asking for a brief extension (3–6 months) rather than scrambling into a subpar three-year contract. Microsoft would rather extend you a bit than lose you entirely, and that extra time can be the difference between a poor outcome and a great one.

Pitfall #3: Auto-Renewal / Default Rollovers

Some companies approach an EA renewal on autopilot, simply rubber-stamping the same deal as last time without scrutiny. Microsoft is pleased when you do this, but it often means you carry forward a significant amount of waste.

You might end up renewing licenses you no longer need—classic shelfware—or sticking with terms that no longer fit your business. I’ve seen clients auto-renew and later realize they were paying for products that nobody was using.

Instead, treat every renewal as a fresh negotiation. Even if you plan to stick with Microsoft, approach the renewal as if you were starting from scratch. Audit what you’re actually using, identify what you can cut or downgrade, and renegotiate accordingly.

Don’t let “same as last time” thinking lock you into another round of overspending; your business isn’t the same as it was three years ago, and your contract shouldn’t be either.

Pitfall #4: Over-Commitment (Shelfware Galore)

Microsoft often encourages customers to opt for higher-cost options they may not need. A prime example is pressure to move everyone onto the top-tier Microsoft 365 E5 suite, even if only a fraction of those features will be used.

Similarly, Microsoft might encourage an unrealistically high Azure spending commitment. The result of these tactics: you pay for a lot of unused capabilities. All those underutilized licenses and cloud services—often called shelfware—end up draining your budget without enough value in return.

Resist over-buying by right-sizing your agreement. If E5 isn’t needed for all employees, deploy it only where it makes sense and use less expensive licenses elsewhere.

Be conservative with Azure commitments—pledge what you know you’ll use, not what Microsoft hopes you’ll spend. You can always scale up later if needed.

Also, whenever possible, negotiate flexibility (for instance, the ability to adjust your Azure commitment or repurpose unused licenses). License for your actual needs, not for Microsoft’s sales targets.

Pitfall #5: Accepting the “Best Price” at Face Value

Microsoft reps love to claim that their initial offer is giving you a standard, “best price” discount. I’ve heard that line in plenty of negotiations, and too many customers accept it at face value.

The truth is, Microsoft’s first offer is usually not its best offer; it’s just the most convenient for them. If you take the “standard” discount without question, you’re likely overpaying. I’ve seen companies later discover that peers of similar size negotiated much better discounts by pushing back.

So never simply trust a “best price” claim—verify it. Do your homework by gathering pricing benchmarks from industry peers or consultants. Get comparative quotes from Microsoft’s Cloud Solution Provider partners, and even consider alternative solutions (like Google or Amazon) for leverage.

Armed with this information, you can challenge Microsoft’s first offer and demand a better deal. Microsoft often has more wiggle room than they admit; if they see you know the market and might walk away, they’re far more likely to sharpen their pencil.

Pitfall #6: Ignoring Business Changes

Too often, EA renewals are negotiated based only on today’s headcount and needs, ignoring how much can change in three years. Your organization might acquire another company, divest a unit, double its staff, or lay people off during the term.

I’ve seen clients pay for far more licenses than they needed after a downsizing, because their EA had no allowance to reduce counts. I’ve also seen companies grow fast and run out of licenses, then pay through the nose for extras at list price mid-term.

Always build flexibility into your EA to account for change. Negotiate the right to “true-down”—reduce your license count and costs—if your user base shrinks. Include clauses for mergers, acquisitions, or divestitures so you can adjust licenses without penalty when your organization changes shape.

And don’t overestimate your needs at the start; it’s safer to slightly undershoot and add licenses later than to overcommit and be stuck with excess. By planning for change, your EA can adapt to your business instead of becoming a burden.

Pitfall #7: Hidden Costs – True-Ups & Compliance Surprises

Hidden costs, such as true-ups and compliance issues, often blindside customers after an EA is signed.

A “true-up” is the bill for any usage above your licensed quantities during the term. I’ve seen companies get hit with large fees at year-end because they added users or enabled features without proper licenses.

It’s also common to misunderstand Microsoft’s rules—maybe you thought moving a workload to the cloud meant you could drop certain on-prem licenses, when in fact you still needed them. Such oversights can lead to unexpected costs and even trigger a Microsoft audit if they suspect under-licensing.

Prevent these surprises by being vigilant and proactive. Make sure you understand the true-up terms in your contract—know when and how extra usage is measured and charged. Where possible, negotiate protections like price caps for added licenses or grace thresholds for minor overages.

Internally, keep track of your license usage throughout the year and run your own compliance checks before renewal.

If you catch a shortfall or overuse, address it with Microsoft during the renewal negotiations (when you have leverage) rather than after. Staying on top of usage and compliance will save you from nasty last-minute bills.

Pitfall #8: Falling for “Bundle & Save” Upsells

As the renewal nears, Microsoft often dangles “bundle and save” offers to get you to spend more. They might suggest adding a product like the new AI-powered Copilot or a security suite to your EA at a big discount. I’ve seen organizations take these deals, thinking the steep discount makes it worthwhile.

The trap is, a discount on something you don’t truly need isn’t a savings at all—it’s an unnecessary cost. Those extra products (advanced security, Power Platform add-ons, analytics tools, etc.) often end up underused.

You pay for features that employees don’t fully adopt, meaning you’re spending money on shelfware simply because the bundle sounded like a bargain.

To avoid this, stay disciplined: only bundle products that align with a confirmed business need and a clear adoption plan. Don’t let a flashy discount distract you from your actual requirements—it’s perfectly fine to say “no thanks” and stick to core licenses.

If there’s a new product you genuinely want to try, do a small pilot or short-term subscription instead of bundling it into a three-year deal.

And if you do bundle something, negotiate a safety net: for example, the option to drop or reduce that product after a year if it isn’t delivering value. The goal is to avoid paying for hype and ensure every component of your EA delivers real value.

Pitfalls & Solutions Table

Below is a quick-reference table summarizing these common pitfalls, what happens in each case, the result, and how to avoid it:

Five Expert Recommendations

• Start early and control the timeline—Microsoft wins when you run out of time.
• Never trust a verbal commitment—if it’s not in the EA, it doesn’t exist.
• Benchmark everything—Microsoft’s “best price” isn’t the best until you’ve compared.
• Protect against shelfware—license for what you’ll actually use, not what Microsoft wants to sell.
• Negotiate flexibility into every deal—include true-downs, M&A clauses, and renewal protections.

Ultimately, preparation and vigilance are your most effective tools. By avoiding the pitfalls above and following these best practices, you can turn your Microsoft EA renewal from a minefield of traps into an opportunity to secure better value and terms for your organization.

Related articles

• The Verbal Promise Trap: Why You Must Get Everything in Writing in Microsoft EA Negotiations
• The “True-Up” Trap: Avoiding Surprises in Microsoft EA True-Up Costs
• Shelfware in Microsoft EAs: Identifying and Eliminating Over-Licensing
• Trapped in Your Microsoft EA? How to Ensure Flexibility and Avoid Lock-In
• Reading the Fine Print: Don’t Let Microsoft’s Assurances Hide Contract Gotchas

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