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Microsoft EA Negotiations

Exiting or Downsizing a Microsoft Enterprise Agreement

Exiting or Downsizing a Microsoft Enterprise Agreement

Exiting or Downsizing a Microsoft Enterprise Agreement

Exiting or downsizing a Microsoft Enterprise Agreement (EA) is a significant decision for any organization. An EA is a multi-year, volume licensing contract that many large and mid-sized companies use to cover Microsoft 365 subscriptions, Azure cloud spend, Dynamics 365 licenses, and more under one agreement.

However, changes in business strategy, cost pressures, or shifts toward more flexible cloud models can drive IT leadership and sourcing professionals to reconsider this commitment.

This advisory article provides a comprehensive, Gartner-style analysis of how to strategically plan an EA exit or reduction.

We cover key considerations, potential risks, financial implications, alternative licensing options, stakeholder alignment, and the long-term strategic benefits of making a change.

Clear recommendations and practical examples are included to guide CIOs and procurement leaders through this complex transition.

Key Considerations Before Leaving or Reducing an EA

Before deciding to exit or shrink your Microsoft EA, evaluating your current state and objectives is crucial. Key factors to consider include:

  • Business and Usage Drivers: Why are you considering an EA exit or reduction? Common reasons include mergers or divestitures reducing user counts, shifting to cloud-native services, budget cuts, or frustration with unused licenses. Ensure the decision aligns with your broader IT strategy – for example, if you’re moving to a more agile or consumption-based model, an EA may no longer fit. Conversely, a full exit might be less attractive if stability and fixed pricing are priorities.
  • Current License Utilization: Perform a thorough inventory of your Microsoft licenses and cloud services under the EA. Identify what is being used versus what you’re paying for. Many organizations find they are over-licensed – e.g., paying for more Microsoft 365 seats or Azure commitments than needed. Pinpoint areas of under-utilization or shelfware. This analysis will highlight where costs can be trimmed (such as dropping unused Dynamics 365 modules or excess Office 365 seats), which is essential for right-sizing. Include any Software Assurance benefits in this review; note which benefits you actively use (training days, support, upgrade rights) so you can plan for their loss or replacement if leaving the EA.
  • Contract Commitments and Timing: Review your EA agreement terms and expiration dates. Typically, EAs run on a three-year term. You usually cannot reduce license counts mid-term (except at specific anniversary points for some subscriptions) – reductions (a “true-down”) are only allowed at renewal. Plan your exit for the end of the EA term to avoid penalties. Mark critical dates: Microsoft often requires notice of 30-60 days before the end if you do not intend to renew. Also, plan for a final True-Up if applicable – you’ll need to report any increases in usage since the last anniversary and settle those before exiting.
  • Future Needs and Scalability: Project your organization’s technology needs 1-3 years out. If you anticipate growth in users or new projects, downsizing the EA could lead to higher future costs if you add licenses later outside of a volume agreement. On the other hand, if you expect contractions or highly variable usage (seasonal or project-based staffing, for example), moving to pay-as-you-go models can avoid locking in excess capacity. Consider pilots or upcoming initiatives: are you planning to deploy new Microsoft services (e.g., Power Platform apps, additional Dynamics modules) that might be cheaper under an EA discount? Or are you moving away entirely from some Microsoft stack components? Align the decision with these forward-looking plans.
  • Market and Vendor Developments: Stay aware of Microsoft’s licensing program changes. Microsoft has been evolving its agreements. For instance, the Microsoft Customer Agreement (MCA) has emerged as a replacement for traditional EAs in many cases. Starting in 2025, Microsoft even announced it would phase out the EA for certain smaller enterprises, pushing them to modern purchase models. These shifts can influence your strategy. If Microsoft is steering customers like you toward direct subscriptions or Cloud Solution Provider channels, you may find enhanced incentives or smoother migration paths for those options. Conversely, suppose you’re a very large customer still eligible for EA. In that case, Microsoft may fight hard to keep your business, which could translate into deeper discounts if you negotiate to renew a smaller EA. Keep an eye on Microsoft’s roadmap and leverage any changes to your advantage.

By carefully examining these considerations, you can determine if a full exit, partial renewal, or hybrid approach will best meet your organizational needs.

Risks and Challenges of Exiting an EA

Breaking away from an Enterprise Agreement or significantly reducing its scope carries several risks and challenges. It’s important to recognize and mitigate these potential pitfalls:

  • Loss of Volume Discounts: One of the primary benefits of an EA is discounted pricing based on volume (tiered by number of users or spend). If you leave the EA, you could lose those programmatic discounts on Microsoft 365 licenses or Azure services. Purchasing the same products via monthly subscriptions or smaller plans may carry higher unit prices. For example, an Office 365 E3 license under EA might be ~15% cheaper than buying it month-to-month through a partner. As you exit, prepare for Microsoft’s “sticker price” unless you negotiate new discounts in alternate channels.
  • “True-Up” Becomes “Pay-Up”: Under an EA, you report additional usage annually and add it to your bill (true-up), often at pre-agreed rates. After exiting, any increase in users or consumption will require buying new licenses on the fly, likely at less favourable rates. This isn’t necessarily bad – you pay only when needed – but costs can spike if your organization unexpectedly grows. Budget predictability may decrease without the EA’s fixed pricing; you’ll need diligent monitoring of cloud usage to avoid overruns.
  • Software Assurance and Benefits Gaps: Enterprise Agreements bundle Software Assurance (SA), which provides valuable perks: rights to new software versions, training vouchers, planning services days, and 24×7 support from Microsoft. Exiting the EA means losing automatic access to these. If you still rely on SA benefits (e.g., upgrade Windows/Office regularly or use training/support days), you’ll need to budget for replacements. Some benefits can be replaced – for instance, you might purchase support contracts separately or adopt Microsoft’s Unified Support. But those could add cost, eating into savings. Carefully evaluate which SA benefits you use and how to compensate for their loss in the new model.
  • Compliance and License Management Complexity: With an EA, compliance is relatively straightforward – you true-up once a year and are covered organization-wide. License management becomes more complex in a fragmented model (multiple subscriptions, perhaps multiple providers). There’s a risk of falling out of compliance (e.g., deploying more copies of a server software than you have licenses for, once not all are under a single agreement). As you exit, you must implement strong Software Asset Management practices to track licenses purchased via different channels. Independent SAM tools or services can help you stay compliant and optimized outside the EA umbrella.
  • Transition and Migration Disruption: The process of switching licensing models can itself be challenging. For example, moving thousands of Office 365 users from an EA tenant to a new licensing source (CSP or direct) must be planned carefully to avoid service interruption. Azure subscriptions might need to be transferred to new agreements – a procedural task that, if mishandled, could risk billing errors or even service suspension. Operational hiccups are a risk: your IT team will have to coordinate cutover dates, reassign licenses, and double-pay for a short period in some cases to ensure continuity. Planning and testing are critical to minimize disruption during the changeover.
  • Internal Resistance and Stakeholder Concerns: An EA exit can encounter internal pushback. Finance might worry about losing the ability to forecast a fixed yearly spend. Business unit leaders might fear losing access to certain tools or benefits. Your Microsoft account team will certainly try to convince you to keep the EA (potentially warning of dire consequences of leaving). Be prepared to address these concerns with data and a solid plan. Maintaining stakeholder buy-in (discussed below) is crucial to avoid last-minute reversals or unhappy users.
  • Potential for Higher Long-Term Costs: If not executed with a clear strategy, downsizing or exiting an EA could lead to higher costs in some scenarios. For instance, if you exit but need to add many licenses back due to growth or a new project, you might pay more than if you had kept a discounted EA. Similarly, certain legacy products (e.g., older SQL or Windows Server licenses) might have been cheaper to maintain via SA. Once off EA, you might pay full price for upgrades or cloud equivalents (the “From SA” discount disappears). The cost modelling section below addresses how to mitigate this through careful analysis. The key is to avoid a narrow focus on short-term savings that could inadvertently increase your three-year TCO (Total Cost of Ownership).

By anticipating these risks, you can devise mitigation plans (e.g., negotiating custom discounts for your new licenses, timing the transition to avoid service overlap, tightening license tracking, etc.). Many organizations have successfully moved away from EAs, but it requires proactive risk management to do so smoothly.

Cost Implications and Financial Modeling

The financial impact is one of the most pivotal aspects of deciding whether to exit or reduce an EA. A detailed cost analysis will illuminate whether the move makes economic sense.

Here’s how to approach the cost modelling:

1. Compare EA vs. Non-EA Costs: Build a multi-year model (at least 3 years, since a standard EA term is three years) comparing scenarios:

  • Status Quo (Renew EA): Use your current EA pricing and any proposed renewal discounts from Microsoft. Account for projected growth, user reductions, and the resulting true-ups/true-downs at renewal. Include the cost of Software Assurance if it’s built into your EA.
  • Downsized EA: Perhaps you keep an EA with fewer products or users (if Microsoft allows a smaller enrollment). What pricing and discount tier would apply if you drop to a lower band (e.g., from Level D to Level C discount)? Factor in any partial renewals – for example, renewing only Microsoft 365 on EA but moving Azure out.
  • CSP Model: Price out the equivalent licenses and Azure consumption through a Cloud Solution Provider on a monthly or annual subscription basis. Use current CSP price lists (and, if possible, get quotes from a couple of CSP partners for any discounts they offer). Remember, CSP pricing might include a partner’s margin, typically a few per cent over Microsoft’s base prices.
  • Direct Subscriptions (MCA or Web Direct): Also model purchasing directly via Microsoft’s Customer Agreement or web portal. This may be similar to CSP pricing (often at list price unless you have an enterprise deal via MCA). Sometimes, Microsoft might offer incentive credits or intro discounts for moving to their new commerce experience – inquire about any such programs and include those if applicable.

2. Factor in Hidden and Sunk Costs: Ensure your model accounts for costs that aren’t immediately obvious:

  • Loss of “From SA” Discounts: If you currently have discounted cloud subscriptions (for instance, Office 365 E5 From-SA licenses that are cheaper because you previously owned licenses), note that moving to CSP or new subscriptions will likely forfeit those discounts. Increase those license costs to normal prices in the post-EA scenario.
  • Azure Pricing Differences: Azure is often billed at a pre-negotiated discount, or you might have a monetary commitment under an EA. Outside an EA, Azure could be pay-as-you-go with smaller discounts unless you negotiate an Azure-only deal or use a partner’s optimized pricing. Check if your EA gave you special Azure rates and adjust post-EA Azure costs accordingly.
  • Support and Extras: As mentioned, you might need to buy support separately (Microsoft Unified Support or a partner support package) if you value the support that came with your EA/SA. Likewise, training costs might increase if you use many Microsoft training vouchers. Quantify these and add them to the post-EA scenario.
  • License Transition Costs: During the switch, you may have a one-time overlap (e.g., paying one last EA quarterly instalment while starting new subscriptions) or administrative costs (consulting fees for migration support, etc.). These transitional costs should be included in year one of the post-EA model.

3. Assess One-Time vs Recurring Savings: Identify which cost changes are one-time vs ongoing. For example, if you choose not to renew certain on-premises licenses’ SA, you save those renewal fees each year, resulting in recurring savings.

If you had a large EA pre-payment, ending it might free up cash flow initially (one-time benefit). Conversely, paying monthly via CSP instead of annually upfront could have cash flow benefits, possibly a higher total over time. Break out the model to show the impact of cash flow, which might also matter to your finance team.

4. Scenario Planning: Prepare a few scenarios to test sensitivity:

  • Best case: You downsize, and your usage remains lower than expected, capturing maximum savings.
  • Worst case: Shortly after exiting, your company acquires another firm or expands, forcing you to add many licenses at full price—how much more would that cost compared to if you had stayed in EA? This helps illustrate the risk range.
  • Most likely case: Based on realistic growth or shrinkage projections. This is your base comparison for decision-making.

5. Include Strategic Value, Not Just Dollars: While cost is paramount, remember to weigh strategic benefits in your “business case” (more on benefits later). For instance, the value of flexibility is hard to quantify but important – perhaps avoiding a long lock-in is worth a slight premium. Try to translate some benefits into financial terms. E.g., if monthly flexibility avoids paying for 200 unused licenses for half a year, that’s X dollars saved in that scenario. Exiting the EA means you can switch to a different vendor’s solution for certain workloads in year 2, including the cost difference or avoidance.

6. Validate with an Independent Model: Given the complexity, it may help to use a cost modelling template (see Tools & Resources at the end) or have an independent licensing advisor review your assumptions. Microsoft or its resellers will happily provide comparisons, but remember, they have a vested interest in you staying (or moving) a certain way. An unbiased model will give your leadership confidence in the numbers.

Doing this financial homework will give you a clear picture of the trade-offs. In some cases, the analysis might reveal that staying in an EA (or perhaps opting for a smaller EA plus some flexible licensing) is the cheapest over the term.

In others, the savings from exiting are substantial. Either way, having a detailed cost model arms you with the facts needed for stakeholder buy-in and negotiations with Microsoft or alternative providers.

Licensing Transition Options and Alternatives

When exiting or downsizing an EA, you must decide how to license the Microsoft products in the future. The good news is you have multiple options and can mix and match as needed.

Below, we discuss how to transition the major components of a typical EA – Microsoft 365, Azure, and Dynamics 365 – and considerations for remaining on-premises licenses.

  • Microsoft 365 (Office 365 & EMS)Seat Licensing: Instead of procuring user subscription licenses through an EA, you can purchase Microsoft 365 (formerly Office 365) plans via other channels:
    • Cloud Solution Provider (CSP) program: In this partner-led model, you buy licenses from a Microsoft reseller on a subscription basis. You can adjust seat counts month-to-month or annually, providing flexibility absent in the EA. CSP partners can also bundle value-added services (migration support, user training, etc.) with the licenses. Be aware that the partner sets pricing; it may be at Microsoft’s list price or with a small discount, but partners add a margin for their services. The trade-off for flexibility is potentially paying a bit more per license compared to a volume EA price. When moving to CSP, map your existing licenses to equivalent offers (e.g. Office 365 E3 to Microsoft 365 E3) and schedule the cutover at EA expiration so users maintain continuity. A well-coordinated CSP transition can be seamless – you’ll essentially get new license keys or assignments in your admin portal that replace the expiring EA ones. Microsoft Customer Agreement (MCA) – Direct: Microsoft now offers large customers the option to buy cloud subscriptions directly through an MCA (also referred to as MCA-E for enterprise). This is an evergreen agreement you sign with Microsoft, with no fixed term. Initially focused on Azure, as of 2023, the MCA has expanded to seat-based products like Microsoft 365 and Dynamics 365 in many regions. With an MCA, you can transact directly on Microsoft’s commerce platform, often on a monthly billing basis, similar to CSP, but without a reseller. The MCA gives you the flexibility to add/remove licenses via Microsoft’s portal and get a consolidated bill for all your cloud services. Essentially, it removes the reseller intermediary. However, you won’t have a partner managing your account – which for some IT teams is fine, and for others means they need to handle more internally. Pricing under MCA is typically Microsoft’s standard rate unless you negotiate something for very large volumes. When exiting an EA, moving to an MCA for Microsoft 365 can be attractive if you prefer direct control and potentially avoid partner margins. Keep in mind support under MCA would be through Microsoft support channels (which may require a support contract depending on your scenario).
    Tip: Regardless of CSP or MCA, ensure that your tenant (the cloud instance for Office 365/D365) remains the same to avoid data migration. You’re only changing the billing source for the licenses, not moving user data. Microsoft and partners have procedures to transfer subscriptions in place on the same tenant, so plan this with them. Also, coordinate timing: often, you can arrange for the new subscriptions to start the day after EA ends, with no lapse in service.
  • Azure ServicesCloud Consumption: If Azure usage was part of your EA, you likely had an Azure enrollment with either an annual monetary commitment or pay-as-you-go with an EA discount. Post-EA, you have two primary routes for Azure:
    • Azure via CSP: You can have a CSP partner manage your Azure subscriptions under the partner’s umbrella. Microsoft has made it possible to transfer Azure subscriptions from an EA to a CSP without rebuilding resources – it’s largely a billing transfer process. Under CSP, the partner will bill you for Azure, often at the same rate Microsoft would (some partners even offer a small discount or enhanced management tools). The benefit is that the partner can provide cloud management services, consolidate billing with your other licenses, and potentially advise on cost optimization. The downside is you’re tied to that partner for billing; if you ever want to switch partners or go direct, it’s another migration (though not too heavy if planned well). Ensure the CSP is a good fit and can support your Azure complexity (e.g. if you use advanced PaaS services, confirm the partner has expertise there). Azure via Microsoft Customer Agreement: This is Microsoft’s preferred path for direct enterprise customers leaving EA. You sign an MCA and transition your Azure subscriptions to it. You’ll then get billed by Microsoft directly for your Azure consumption, either monthly or annually. Under an MCA, you might lose any EA-tier discounts, but Microsoft often allows you to negotiate an Azure commitment separately. For example, you could sign an MCA and agree to a certain annual Azure spend in exchange for a discount or some free credits. Essentially, this becomes similar to an EA but just for Azure and with more flexibility. The MCA also allows true pay-as-you-go: if you don’t want any commitment, you can just pay list rates for whatever you use, and you can scale down to zero if needed. This suits organizations with very unpredictable or project-based Azure usage. One caution: if you were using any special Azure pricing under EA (like Azure Hybrid Benefit or dev/test pricing under EA), ensure those are re-established under the new agreement – most will carry over since they are product benefits, not contract-specific, but double-check to avoid surprise charges. Also, re-enable any cost management or budget alerts when switching to the new billing to catch anomalies early. In both cases, the technical migration for Azure is minimal compared to user licenses – it’s mostly administrative (updating the enrollment ID/ billing association). Still, plan it during a low-usage period and have support ready for access issues. Don’t forget to close out the old EA Azure enrollment formally, so you aren’t billed beyond the term – this may involve a final reconciliation of any over/underspend against your EA commitment.
  • Dynamics 365 (CRM/ERP)Business Apps Licensing: Dynamics 365 licenses (for modules like Sales, Finance, Supply Chain, etc.) are also subscription-based and often included in an EA for big customers. To transition these:
    • CSP: Many CSP partners sell Dynamics 365 subscriptions as well. Like M365, you can reduce or add D365 user licenses as needed through the partner. Ensure the partner has Dynamics expertise; these are mission-critical systems, and you may need support adjusting license counts or types as your usage changes. Licensing for Dynamics can be complex (with device licenses, team member licenses, etc.), so an experienced partner or consultant is valuable during the change to avoid overpaying.
    • MCA / Direct: Microsoft’s direct purchase options for Dynamics 365 are expanding. Under the MCA, as noted, Microsoft 365 and Dynamics 365 subscriptions can be purchased without an EA. If you go this route, work closely with your Microsoft account rep to ensure a smooth switch since Dynamics instances are also tied to your tenant. You might essentially “renew” your Dynamics subscriptions on the Microsoft portal instead of via the EA, keeping the same instance and data. Contractually, you’ll just be moving to a different billing agreement.
    • Consider Licensing Structure: If you were in an EA, you might have owned enterprise-wide Dynamics licensing (e.g., an unlimited user deal or a bundled price). Post-EA, you’ll likely be on per-user subscriptions. Attention to license minima – some Dynamics modules require a minimum number of users or base licenses. Verify that moving out of EA won’t violate any of those requirements, or adjust your plan if so (for example, some advanced modules require at least 10 seats purchased; ensure you maintain that if needed).
  • On-Premises Software & Perpetual Licenses: Many EAs also cover Windows Server, SQL Server, Windows 10/11 Enterprise upgrades, Office Pro Plus, and other on-prem software, often with perpetual use rights. When you end an EA:
    • Any perpetual licenses you acquired are yours to keep (they don’t disappear just because the EA ends). However, if you had been paying SA on them for upgrades, that SA will lapse. You will no longer receive upgrade rights or support on those products. Plan for how you’ll handle future upgrades: you might skip versions until a later refresh or move those workloads to the cloud (rendering the on-prem license less critical). Sometimes, you can move perpetual licenses into a Microsoft Products & Services Agreement (MPSA) or open license program to continue SA on a smaller scale. Still, Microsoft’s trend is to phase those out in favour of subscription models. Evaluate whether renewing SA via alternate means is cost-effective or if you can live without upgrading for a while.
    • If you were using an Enterprise Subscription Agreement (EAS) (where even on-prem licenses were subscription-based, not perpetual), note that those on-prem products will expire if you don’t renew. For instance, if you subscribe to Windows Server licenses through an EAS and end it, you are not entitled to keep using that software unless you convert the subscription to a perpetual license (which usually means buying it out at a discount). Check your contract for any buy-out options for subscription licenses. It might make sense to purchase perpetual licenses for critical infrastructure before the EA expires to ensure you remain properly licensed thereafter.
    • CALs and Client Software: EAs often include Client Access Licenses (CALs) for things like Exchange, SharePoint, etc., sometimes as part of bundles. Ensure that if you still run on-prem Exchange/SharePoint/Skype servers, you have the necessary CALs or user licenses outside the EA. If not, you may need to purchase them via another program or shift those users to online services.
    • Device Licensing: If your EA included Windows Enterprise OS upgrades for all PCs, ending it means new PCs won’t automatically have Windows Enterprise rights. Consider if you need to license Windows Enterprise via Microsoft 365 E3/E5 subscriptions instead, or if those features (like BitLocker management, etc.) can be handled through other means (e.g., Intune with Windows Pro). Microsoft 365 E3/E5 includes Windows Enterprise, so you’re covered if you keep users on those subscriptions via CSP/MCA.

In summary, transitioning out of an EA means adopting either a CSP or a Direct/MCA model for each aspect of your Microsoft environment. You might use a mix – for example, buy Azure direct from Microsoft but get M365 and D365 via a CSP that provides extra services.

Hybrid licensing approaches are common and beneficial: perhaps retain a slimmed-down EA for core predictable needs and use CSP for variable needs. Microsoft allows combining agreements (though you’ll lose some bundling discounts).

The key is to align each component with the model that best fits its usage pattern and your organizational capabilities. If done thoughtfully, you can achieve a balance of cost savings and flexibility that improves your overall ROI on Microsoft spend.

Stakeholder Alignment and Change Management

Exiting or downsizing an EA isn’t just an IT or procurement project – it affects many stakeholders across the organization.

A successful transition requires careful change management and alignment of all parties involved:

  • Executive Sponsorship: Secure support from top leadership (CIO, CFO, or even CEO) early in the process. Explain the strategic rationale – e.g., “This move will save us $X over 3 years, increase our agility to scale software up/down, and better align our spend with actual use.” Executives will need to back the plan, especially if there’s pushback from Microsoft or internal teams. A CIO’s endorsement, for instance, can help counter a Microsoft account manager’s scare tactics about leaving the EA. Also, the CFO will be keenly interested in the financial modelling and get their team’s agreement on the assumptions and outcomes, so there are no surprises later.
  • IT and Technical Teams: The IT department (including infrastructure, cloud ops, and application owners) must be on board and prepared for the transition work. They will handle tasks like shifting licenses, reconfiguring billing, and ensuring no interruption in service. Involve the relevant IT leads in planning meetings to map out the technical steps. Address their concerns about support or functionality – for example, the Office 365 admin might worry about losing advanced support; you might mitigate that by arranging a support contract or ensuring a partner will handle escalations. IT operations must know who to call for issues post-EA (since it might no longer be Microsoft Premier Support directly). Establish that plan and communicate it.
  • Procurement and Sourcing: Your sourcing/procurement team will drive the commercial negotiations with Microsoft and any new providers. They need to be aligned on the strategy – to leverage a competitive approach (getting quotes from CSPs, etc.) or push Microsoft for concessions. Procurement will also handle contract reviews for the new agreements (MCA terms, CSP partner contracts). Ensure they coordinate with legal as needed for any terms that differ (for instance, Microsoft’s MCA might have different liability clauses than your EA had). The procurement team should also update internal purchasing systems and processes to accommodate the new model – e.g., purchase orders to a CSP every month/quarter instead of one big EA PO.
  • Finance and Accounting: Finance will care about how expenses might shift from CAPEX to OPEX (if you were treating a 3-year EA commitment as a capital expense vs. monthly subs as an operational expense) or changes in billing frequency. Work with Finance to plan budgeting for more variable costs. They might need to adjust how they forecast software costs – instead of a fixed annual EA fee, it could be usage-based. Additionally, if the EA was paid upfront, ending it might improve cash flow, but finance should plan where those savings will be allocated. Finance should also be prepared for potential overlap costs during the transition (as noted in the cost implications). Ensure the accounts payable folks know to expect invoices from new sources (the CSP or Microsoft directly) so they don’t mistakenly delay payment, thinking it’s unauthorized.
  • Business Units and End Users: From the end-user experience perspective, the goal is to make this transition invisible. They should continue to have access to all their Microsoft tools without disruption. However, communication is still important. If you plan to down-license some users (for example, moving some infrequent users from Office 365 E5 to E3 to save money as part of downsizing), coordinate with those business units. There may be feature impacts (E5 has advanced analytics or security features that E3 does not, for instance). Work with department heads to identify whether users need the higher-tier licenses. This is a good opportunity to re-align license levels to user needs but do it collaboratively to avoid crippling someone’s workflow unknowingly. Communicate any process changes – e.g., “If you need a new Microsoft license, the process will be different after we exit the EA: you will request it through IT, who will get it from our CSP, instead of our old true-up process.”
  • Security and Compliance Officers: Sometimes, license changes can have security implications. For example, if you drop from Microsoft 365 E5 to E3, you lose certain advanced threat protection tools. Ensure the CISO’s team knows what’s changing and if alternative solutions are needed to cover any gaps. Also, if you’re ending licenses for a product entirely (say, moving from Microsoft Cloud App Security to a third party or dropping a Dynamics module), ensure data retention and compliance requirements are addressed (you don’t want to accidentally lose access to archived data because a license expired). The compliance team will also want to double-check that the new licensing approach still meets contractual obligations (especially in regulated industries; there may be rules about software usage and audits).
  • Communication Plan: Develop a clear communication plan for all stakeholders about the transition timeline and effects. For a large organization, you might set up a dedicated internal site or helpdesk FAQs about the EA exit: “What does this mean for me?” Most end users won’t need details, but IT staff and budget owners will. Communicate early and often: announce the plan once decided, notify of key milestones (“new licensing agreements effective July 1 – here’s what will change”), and provide training if any processes change (for instance, IT asset managers might need training on a new license portal provided by the CSP).
  • Microsoft and Partners: Although they are external, treat your Microsoft account team and any incumbent LSP (Licensing Solution Provider) as stakeholders to manage. Once your decision is firm, you will inform Microsoft that you do not intend to renew the EA (usually via a formal notice to your LSP or Microsoft account manager). Expect a reaction – Microsoft will likely escalate offers or involve executives to convince you otherwise. Having your internal stakeholders aligned and backing the decision is your best defence against wavering. It’s okay to listen to Microsoft’s proposals (indeed, you should – they might suddenly offer a much better deal to keep you, which you can then accept or use as a benchmark), but be unified in your requirements. If the decision is to downsize, communicate that in a way that leaves room for negotiation on the remaining pieces but is clear on what you’re changing. For example: “We have chosen to move our Azure consumption to MCA for flexibility, but we are open to renewing the Microsoft 365 EA for 1 more year if the terms are improved.” This signals your plan while inviting a constructive response.

In short, treat an EA exit like any major organizational change – manage it as a program with executive sponsorship, cross-functional coordination, and transparent communication when all stakeholders understand the why and how of the change, you reduce the risk of disruption and lay the foundation for a successful transition.

Strategic Benefits of Downsizing or Exiting the EA

While it requires effort to change course, there are several compelling strategic advantages to downsizing an EA or leaving it altogether:

  • Cost Savings and Efficiency: Perhaps the biggest draw is the opportunity to eliminate waste and pay only for what you need. Many firms find, for example, that they have 15-30% more licenses than active employees due to overestimation or employees leaving. Outside an EA, you can cut those licenses immediately, whereas an EA would have you keep paying until the term ends. Over a few years, this right-sizing can save a substantial budget. Additionally, by not locking into a huge upfront commitment, you can redistribute IT funds to other priority projects (innovation, digital transformation) instead of “sunk” license costs. In cases where organizations moved to a pure consumption model, they often instilled a culture of cost accountability (e.g. teams see the direct monthly cost of their cloud use and work to optimize it), leading to more efficient IT spending overall.
  • Flexibility and Agility: In a fast-changing business environment, scaling up or down on demand is a competitive advantage. Exiting the EA frees you from the rigid 3-year term and the requirement to forecast your needs far in advance. Instead of annual true-up rituals, you can adjust licenses in real-time. If your company divests a division or automates a process and needs 500 fewer licenses, you simply reduce your subscription next month – no lengthy negotiations or wasted spending for months waiting for an EA anniversary. Likewise, for rapid growth or new initiatives, you aren’t constrained by what’s in the EA; you can immediately subscribe to new services as needed. This agility can be especially beneficial for organizations in volatile markets or those pursuing aggressive growth where IT needs can change overnight.
  • Technology Alignment and Innovation: Large EAs can sometimes encourage a “status quo” mindset – you stick with what’s in agreement, even if better solutions emerge because you’ve already paid. By moving to more flexible models, IT leaders might feel more freedom to pilot new technologies. For instance, if a better security solution appears outside the Microsoft ecosystem, you might be more willing to try it once you’re not all-in on an EA that bundles Microsoft’s equivalent product. Additionally, without an EA, you might adopt a best-of-breed approach: use Microsoft where it makes sense and mix in other vendors where they provide more value without worrying about breaking an enterprise-wide commitment. Microsoft’s cloud services evolve quickly as well – being out of EA might let you adopt new Microsoft offerings faster, too, since you’re not waiting for renewal to add them; you just spin them up when released.
  • Improved Transparency and Accountability: When writing a single large check to Microsoft, it can be hard to decipher which services or departments drive costs. By contrast, in a post-EA model, you often get more granular billing (especially if using CSP or separate subscriptions per department). This can foster better accountability – business units see what they consume and can be charged back accordingly. It also makes it easier to pinpoint areas for optimization. For example, you might discover that one department is keeping many unused Azure resources running, incurring costs previously “hidden” in the big EA pool. Now, with clearer visibility, IT can address these inefficiencies. You transform your Microsoft spend from a fixed overhead to a variable cost that can be managed and optimized continuously.
  • Negotiation Leverage (Avoiding “All Eggs in One Basket”): When everything is tied up in one EA, Microsoft holds considerable leverage over your account – at renewal time, they know a huge portion of your IT depends on them, and switching costs are high. If you strategically reduce reliance on the EA, you gain leverage. Microsoft now has to compete to win pieces of your business (e.g., your Azure spend or Office 365 seats) rather than automatically renewing all of it. You can pit options against each other – maybe you threaten to move to Google Workspace for some users or use AWS for some workloads since you’re not contractually bound to keep them on Microsoft. Even if you don’t intend to fully switch, having that freedom often leads Microsoft to offer more concessions to keep each workload on their platform. Essentially, you regain buyer power by not being so deeply tied into a single agreement.
  • Risk Mitigation: Strategically, reducing commitment can mitigate certain risks. For example, if there’s an economic downturn and you need to cut costs quickly, not having a fixed EA payment gives you more room to scale down licenses and spending in line with revenue. Or consider compliance/audit risk: Microsoft license audits can lead to surprise costs if you’re out of compliance. With a more dynamic licensing approach and careful management, you might lower non-compliance risk by continuously adjusting to actual use (whereas with an EA, companies sometimes drift out of compliance and only reconcile at true-up, potentially incurring penalties). Additionally, if Microsoft changes product terms or privacy policies in a way that concerns you, it’s easier to pivot to alternatives when you haven’t prepaid for three years of use.

It’s important to communicate these strategic benefits to stakeholders, not just the cost savings.

For many CIOs, flexibility and alignment with actual needs are the primary motivations – cost savings are a welcome result.

By exiting or downsizing an EA, the organization can become more responsive and resilient, turning its Microsoft licensing from a fixed cost centre into a dynamic asset that better supports business strategy.

Actionable Recommendations for a Successful EA Exit

If you decide to proceed with exiting or reducing your Microsoft Enterprise Agreement, the following best practices and steps will help ensure a smooth and effective transition:

  1. Start Planning Early: Begin the evaluation and planning at least 12-18 months before your EA’s end date. Major licensing changes take time to analyze and execute. An early start allows you to gather usage data, explore alternatives, run cost models, and engage stakeholders without rushing. If you’re already within a year of renewal, kick-off immediately – create a task force and accelerated timeline.
  2. Conduct a License & Cloud Usage Audit: Perform a comprehensive audit of all Microsoft licenses, subscriptions, and cloud services. Document your baseline: how many of each license type, which users or systems use them, and current utilization levels (e.g., Exchange mailbox counts, Azure VM uptime, etc.). This audit should also capture your entitlements – for example, remaining Software Assurance training days or support credits, license keys for perpetual products, and contract clauses in your EA. Knowing what you have and use is fundamental to rightsizing and ensures you don’t accidentally drop something critical during the transition.
  3. Engage an Independent Licensing Expert: Consider bringing in an outside specialist firm (such as Redress Compliance or similar independent Microsoft licensing advisors) to assist with the analysis and strategy. These experts do not resell Microsoft licenses – their role is to provide unbiased guidance on optimizing your licensing and negotiating with Microsoft. They can validate your cost models, suggest licensing alternatives you might not know, and help interpret Microsoft’s often confusing contract terms. Critically, they can interface with Microsoft or CSPs on your behalf during negotiations, leveraging their experience with other clients. An independent expert can also run an “EA health check” to identify any compliance risks to fix before you exit (so you don’t leave with a liability). While there is a consulting cost, it often pays for itself via negotiated savings and avoiding pitfalls.
  4. Develop a Detailed Transition Project Plan: Treat the exit like a mini digital transformation project. Build a plan that covers technical steps, timelines, and responsibilities. Key milestones should include: final decision date (to renew or not, and what to drop), official notice to Microsoft of non-renewal, date to sign new CSP/MCA agreements, a window for dual-running or migrating services, and a target completion date. Plan the sequence: for example, you might transition to Azure first, then Microsoft 365, or vice versa. Include time for testing (e.g. move a pilot group of users to CSP licenses a month early to ensure the process works). Assign owners for each task – the licensing team handles agreements, the IT team handles license assignments and technical changes, the support team prepares the helpdesk for user issues, etc. A checklist of tasks (see EA Exit Checklist in Tools & Resources) can be invaluable to track progress and not overlook any detail, such as exporting a list of your EA license entitlements from Microsoft portals before they shut off access.
  5. Communicate with Microsoft – and Leverage the Negotiation: Don’t ghost your Microsoft rep; use the renewal discussion as leverage. Well before the EA expiration, inform Microsoft of your intentions and see what they offer. If you plan to fully exit, you might still say, “We are evaluating all options, including non-renewal; to consider renewal, we’d need to see significant improvements.” This may prompt Microsoft to propose a bespoke deal – perhaps a shorter term, flexible quantity EA, or extra discounts on certain products. Sometimes, Microsoft might offer concessions like price holds or added value services if you keep some part of the EA. Evaluate any offers critically (and with your independent advisor’s input). Even if you ultimately leave, the negotiation can’t hurt – it might yield a contingency option or confirm that exiting is more favourable. If you do intend to keep a portion (like renewing one enrollment, such as Microsoft 365, but dropping Azure), negotiate the best terms for that portion. Microsoft will be keen to retain whatever they can, so secure commitments like an extended discount or the ability to reduce seats at will, etc., in the new agreement.
  6. Select the Right CSP Partner (if using CSP): If moving to a partner-based model, take the time to vet and select the right Cloud Solution Provider. Not all CSPs are equal – some specialize in certain industries or sizes, and some offer higher-touch services. Get references and proposals from a few. Look for a provider with expertise in your products (e.g., if you heavily use Dynamics 365, the CSP should have that competency). Assess their support structure: Do they offer 24/7 support? Will you get a dedicated account manager? Also, compare their self-service portals or reports if those are important to you. And, of course, compare pricing and terms: are they giving any discount off Microsoft’s MSRP? What are their contract terms for cancellation or changes? A good CSP will act as a partner in more than a name, ideally helping optimize your spending, not just reselling to you. Independent experts or peer references can often recommend reputable CSPs. Once chosen, involve the CSP early to help plan the license mapping and cutover.
  7. Coordinate the Technical Migration in Stages: Plan the technical switch in a way that minimizes risk. A common approach for user-based services like Microsoft 365 is to co-term new subscriptions to start exactly when the EA ones expire. This way, you’re not double-paying, and there’s no gap. Microsoft allows setting future start dates for CSP subscriptions to align with EA end dates; have your partner set that up. For Azure, you might transition a few non-production subscriptions first as a test, then the production ones. Always ensure data backups and document current configurations before making changes. After flipping a subset, validate that users can log in, all data is accessible, and billing is occurring correctly under the new agreement. Then, proceed to the next subset. Phased approaches are wise if you have a very large or complex environment, even if it means a little overlap. For smaller environments, switching everything in one go may be feasible – typically, at midnight of the EA expiration date, the new licenses kick in. Have a roll-back plan in case something goes wrong (for example, confirm with Microsoft that you could temporarily extend the EA for a month if needed, or have a way to quickly assign emergency licenses via a different tenant if required).
  8. Verify and Document Post-Transition Licensing: Once the dust settles, verify thoroughly. Ensure all users, servers, and services have valid licenses under the new model. Remove or deactivate any old EA license keys to avoid confusion. Update your internal documentation: new contract numbers, support contacts, how to provision new licenses in the future, etc. It’s wise to run a reconciliation a month or two after exit – compare what you intended to drop vs what got dropped. Sometimes, a license might inadvertently remain active (and you might get a surprise bill for it later). Clean up any stragglers. Also, document entitlement artefacts: for instance, if you had perpetual licenses from the EA, keep copies of the EA purchase records and license certificates since you won’t have the EA portal access forever. This proof may be needed if audited to show you own those licenses.
  9. Monitor Costs and Adjust in Real Time: Embrace the new flexible model by monitoring your Microsoft usage and costs. Set up Azure cost alerts and Office 365 license utilization reports. The goal is to quickly realize the benefits of pay-as-you-go by not overspending. For example, if you see 100 unused Office 365 licenses still assigned after a few months, remove them and save money next month. Or if Azure spending is trending up unexpectedly, investigate and optimize. Without the EA safety net, you’ll want to instill a discipline of continual license management. Many organizations implement quarterly reviews of cloud services post-EA to keep optimization on track (a good practice to prevent creeping costs).
  10. Celebrate and Communicate Success: After a successful transition, publicize the outcome to reinforce the value of the initiative. Quantify the savings or benefits (e.g., “We reduced our Microsoft licensing costs by 20% annually, equating to $500k while increasing our ability to scale cloud resources on-demand”). Share this with executive leadership and relevant teams. Not only does this recognize the work done by the team, but it also builds organizational support for future optimization projects. It demonstrates that IT and sourcing proactively manage costs and adapt to change positively.

By following these steps, your organization will be well-positioned to execute an EA exit or downsizing with minimal disruption and maximum benefit. Each step reduces risk and ensures you don’t overlook important details in this complex process.

Remember that an EA transition is not trivial, but with a solid plan and expertise, it can be a smooth journey that yields significant returns.

Real-World Scenarios and Examples

To illustrate how organizations navigate EA exits or downsizes, here are a couple of anonymized real-world scenarios:

  • Scenario 1: Mid-Size Firm Saves 30% by Leaving EA – A manufacturing company with ~1,200 employees had an EA covering Microsoft 365 E3, a small Azure commitment, and a handful of Dynamics 365 licenses. During year 2 of the EA, the company underwent restructuring, and headcount dropped by 15%. They were over-licensed and paying for unused seats. At renewal, IT proposed not to renew the EA. Instead, they moved to a CSP for Microsoft 365 and Dynamics 365 and signed an MCA for Azure. The transition was carefully timed and completed over a weekend with no user impact. Over the next year, they realized ~30% cost savings (around $200k) compared to EA renewal. The savings came from immediately shedding ~200 unused M365 licenses and rightsizing Azure usage (shifting some workloads to AWS, where it was cheaper). The CIO reported to the board that this move saved money and improved their agility — when a new subsidiary was acquired later, they could onboard those users via the CSP in days without waiting for an EA true-up. One lesson they noted was that involving an independent licensing consultant was key, as that expert identified that they were eligible for a transitional discount on certain Dynamics 365 modules, something the Microsoft reseller hadn’t informed them about.
  • Scenario 2: Global Organization Takes a Hybrid Approach – A multinational professional services firm (around 10,000 seats) was approaching EA renewal. They were heavy users of Microsoft 365 E5 and Azure, but usage in some areas was flattening. Rather than a binary renew-or-exit decision, they crafted a hybrid strategy. They negotiated a smaller EA renewal for 3 years, covering Microsoft 365 E5 for 8,000 core users and a moderate Azure commitment. For the remaining 2,000 users (who were contractors and high-turnover staff), they did not include them in the EA – those were managed via a CSP with month-to-month Office 365 licenses. Additionally, all new Azure projects were set up under a separate MCA with pay-go billing, reserving the EA Azure commit only for steady-state workloads. This hybrid model gave them a safety net of EA pricing for the bulk of their needs while allowing flexibility on the edges. The outcome: they avoided overcommitting in the EA (saving an estimated $1M over the term in unused licenses and Azure capacity) and had a smoother path to eventually increase the CSP/MCA portion over time. At the next renewal, they plan to shrink or eliminate the EA since they will have gradually migrated workloads out. The key to their success was strong stakeholder coordination – finance appreciated the predictability of core costs, while business units gained flexibility for project-based work. The company’s Microsoft relationship also improved
    : Microsoft’s team focused on helping optimize Azure under the MCA (to prevent losing that business entirely) rather than just pushing more EA, resulting in better technical guidance and cost management support.

These scenarios show that there is no one-size-fits-all approach. Companies can adapt the strategy to their needs, whether it’s a clean break or a phased hybrid model, and achieve positive results. The common thread is proactive planning, clear objectives, and leveraging options outside the traditional EA to craft a more optimized licensing posture.

Tools & Resources (Downloadable Assets)

In planning and executing an EA exit or reduction, the following tools can be extremely helpful. Advisory firms often provide these resources or can be developed in-house to manage the process:

  • Microsoft EA Exit Checklist (Downloadable PDF): A comprehensive step-by-step checklist that guides you through the entire exit process. This checklist covers all phases – from pre-decision analysis to post-transition validation. It includes items like “Review EA contract for notice periods,” “Capture current license entitlements from Volume Licensing Service Center,” “Finalize new licensing agreements (CSP/MCA) and have support contacts in place,” “Communicate changes to support desk,” and “Reconcile final EA true-up.” Using a checklist ensures no critical task slips through the cracks. Sourcing professionals can use it as a project management tool to track progress and assign responsibilities. (Download and adapt this checklist to fit your organization’s specific products and internal processes.)
  • EA vs. Alternatives Cost Modeling Template (Excel): A financial model template with formulas to compare EA costs vs. CSP/MCA subscription costs. This downloadable Excel workbook includes tabs for inputting your current EA details (license counts, unit prices, Azure spend, SA costs) and alternate scenario inputs (e.g., CSP pricing, growth rates, etc.). It produces side-by-side multi-year cost projections and includes charts to visualize savings over time. The template also has sections for one-time transition costs or ongoing support fees outside the EA. By plugging in your data, you can see the financial impact of different strategies (full renewal, full exit, hybrid approach). This tool is especially useful for communicating with finance – it provides an objective view of the dollars, which helps get buy-in for the recommended course of action. (The template is customizable; you can adjust assumptions like discount rates or inflation and extend the timeline as needed.)
  • License Mapping Reference Guides: (There is not a single download, but there are resources on hand.) Ensure you have documentation for mapping current licenses to new SKUs. For example, a guide says, “If you had Office 365 E3 under EA, the equivalent CSP offer is Microsoft 365 E3” or “SQL Server with SA can be replaced by Azure Hybrid Benefit in Azure.” Microsoft’s documentation and partner guides can be sources for this. Having a quick reference will speed up the transition configuration. Many independent experts also provide cheat sheets for this as part of their service.
  • Support Contact Sheet: When leaving an EA, compile a document listing all the new support avenues: CSP support portal info, Microsoft support numbers for MCA customers, your independent advisor’s contact (if they offer post-cutover assistance), etc. This isn’t a traditional “download,” but creating and distributing it to your IT operations and helpdesk teams is vital. It can be thought of as an internal resource that accompanies the exit.

Using these tools can significantly streamline the process of analysis and execution. They bring structure to what can otherwise be a daunting project.

For example, the EA Exit Checklist ensures you handle obvious and subtle tasks (like verifying license key archives).

The Cost Modeling Template provides credible data to justify the move. Leverage these assets – they encapsulate best practices and lessons learned from many organizations that have gone through similar journeys.

Leveraging Independent Expertise (Advisory Support)

A recurring theme in this discussion has been the value of independent licensing experts. Engaging such expertise can greatly increase your chances of a smooth and favourable outcome.

Here’s why independent advisory support (as opposed to relying solely on Microsoft or a reseller) is so important:

  • Unbiased Guidance: Independent consultants work for you, the client, with no financial incentive to steer you toward any particular licensing program or product purchase. In contrast, Microsoft or reseller sales teams have quotas and revenue targets – naturally, their advice may be tilted toward keeping you in an EA or upselling new services. An independent expert provides a neutral second opinion on what Microsoft proposes. For example, if Microsoft claims “Option X is cheapest for you,” your advisor can verify or debunk that with data and experience from other clients.
  • Deep Licensing Expertise: Microsoft licensing rules are notoriously complex and change frequently. Independent advisors (such as those at Redress Compliance, SoftwareONE, Directions on Microsoft, and similar firms) specialize in mastering these details. They can interpret the fine print in your contracts, identify loopholes or opportunities, and ensure you don’t agree to unfavourable terms out of ignorance. During an EA transition, they can help with things like structuring deals to maximize eligibility for discounts (e.g., knowing if you qualify for certain Microsoft incentive programs), optimizing the mix of licenses (maybe suggesting a different Office 365 plan level for some users), and avoiding common pitfalls (like inadvertently cancelling something that triggers a penalty).
  • Benchmarking and Negotiation Power: Advisors often have insight into market benchmarks – discount levels similar to those companies are getting, concessions Microsoft has made in special cases, etc.. They can leverage this knowledge in negotiations. When Microsoft makes an offer, your advisor might counter with, “We have seen Microsoft give a 20% discount in this scenario to others; we expect the same.” This holds Microsoft to competitive behaviour. Moreover, suppose you’re using multiple suppliers (perhaps a CSP and Microsoft directly). In that case, an independent can coordinate a competitive bidding approach, where each supplier knows the deal isn’t guaranteed, motivating them to offer better pricing or terms.
  • Project Management and Execution Support: Beyond strategy and negotiation, independent firms can assist in the execution phase. They often have methodologies for managing license transitions and can provide extra bandwidth to your team. For example, they might perform the task of compiling the license inventory or interfacing with the CSP to ensure all subscriptions are set up correctly. Some advisors will stay on through the cutover period to quickly troubleshoot any licensing snafus. Essentially, they’ve done this before, so they know where to look for issues. This can de-risk the transition substantially – you have a seasoned guide to navigate Microsoft’s processes (like pushing through an Azure subscription transfer smoothly or ensuring your global offices are covered under new agreements).
  • Audit Defense and Compliance Assurance: There’s a chance that after you exit an EA, Microsoft might eventually initiate a license audit (especially if they suspect not all usage is accounted for). Independent licensing experts often provide audit defence services or audit readiness checks. By involving them from the start, you ensure your transition doesn’t leave any compliance gaps. They can help maintain an audit trail of what licenses were in place and how they were replaced, so if any questions arise later, you have documentation ready. Knowing this support can give you peace of mind to proceed boldly with the changes.
  • Focus on Your Interests: Perhaps the biggest advantage is that an independent partner is aligned with your success metrics: minimizing cost, minimizing risk, and achieving your business outcomes. They can candidly advise, “You should exit this part of the EA, but maybe keep that part for now,” without any conflict of interest. They can also say no to Microsoft on your behalf or ask hard questions, preserving your internal team’s relationship with Microsoft (the consultant becomes the “bad cop” in negotiations if needed). For CIOs and sourcing managers, having this expert voice in the room often leads to more confidence in decisions.

When selecting an independent licensing advisor, verify their credentials and experience. Many specialize in Microsoft or other vendors (like Oracle and SAP); ensure Microsoft licensing is a core competency. It’s also wise to ensure they are truly independent – some resellers brand themselves as “advisory” but ultimately aim to sell you licenses. Firms like Redress Compliance pride themselves on not reselling software, which keeps their advice objective.

Engaging such experts does incur a cost (usually consulting fees or a fixed project fee), but it is considered an investment. For a complex EA exit, their guidance can prevent costly mistakes and will likely save more than their fee through optimized licensing and negotiation wins. Even Gartner and other analyst firms often recommend using third-party licensing consultants for big renewals or contract changes, as it levels the playing field between the customer and a vendor as powerful as Microsoft.

Conclusion

Exiting or downsizing a Microsoft Enterprise Agreement is a strategic move that can yield significant benefits, from cost savings and flexibility to better alignment of IT spending with actual needs. However, it is not a decision to be taken lightly or executed hastily. This journey requires careful planning, cross-functional coordination, and informed decision-making. By understanding the full scope of your Microsoft usage, anticipating the risks, rigorously modelling the financial impacts, and exploring the alternative licensing avenues (CSP, MCA, etc.), you equip your organization to make the optimal choice.

Given today’s cloud-driven, dynamic environment, the traditional EA model is no longer the perfect fit it once was for many enterprises. As we’ve discussed, you now have viable options to tailor how you purchase Microsoft 365, Azure, and Dynamics 365 in ways that better suit your business rhythms. Whether you fully exit the EA, adopt a hybrid approach, or simply negotiate a leaner deal, the key is that the strategy serves your business, not vice versa.

Throughout the process, maintain clear communication with all stakeholders and don’t hesitate to leverage external expertise to guide you. With the right preparation and mindset, transitioning away from an EA can be a smooth process that positions your organization for greater agility and value from IT. Ultimately, success will be measured by a licensing model that provides the needed capabilities to your users and developers at the right cost, with the right flexibility, and without disruption to productivity.

Sourcing professionals and CIOs who have navigated this change often find that it empowers them to govern IT spending more proactively and innovate without being handcuffed to legacy contracts.

In a world where technology and business needs evolve rapidly, having the freedom to adjust your Microsoft investments on your terms is a strategic advantage. By following the guidance in this article – and tailoring it to your enterprise’s unique context – you can confidently step into a new era of Microsoft licensing that drives financial and operational excellence.

Author

  • Fredrik Filipsson

    Fredrik Filipsson brings two decades of Oracle license management experience, including a nine-year tenure at Oracle and 11 years in Oracle license consulting. His expertise extends across leading IT corporations like IBM, enriching his profile with a broad spectrum of software and cloud projects. Filipsson's proficiency encompasses IBM, SAP, Microsoft, and Salesforce platforms, alongside significant involvement in Microsoft Copilot and AI initiatives, improving organizational efficiency.

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