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Case study Microsoft EA Renewal

How a French Telecom Provider Negotiated EA Terms to Support Hybrid Cloud Strategy

How a French Telecom Provider Negotiated EA Terms to Support Hybrid Cloud Strategy

Challenge

A major telecommunications provider in France, with tens of thousands of employees and a mix of on-premises and cloud infrastructure, faced a critical Microsoft Enterprise Agreement (EA) renewal.

The company was embarking on a hybrid cloud strategy to modernize its IT operations while maintaining certain critical systems on-premises for latency and regulatory reasons.

As the EA renewal approached, the telecom provider aimed to:

  • Align the EA with its hybrid cloud goals: Ensure the new agreement allows flexibility to shift workloads between on-premises servers and Azure cloud services without incurring duplicate costs or compliance issues.
  • Optimize licensing costs: Identify unused or underutilized licenses to avoid overpaying, especially as some applications are moving to the cloud.
  • Secure favorable terms for cloud services: Negotiate discounts and terms for Azure and Microsoft 365 to support growing cloud adoption over the next three years.
  • Maintain operational stability: Avoid disruptions by ensuring that any license transition (from on-prem to cloud services) is smooth and supported under the EA.
  • Benchmark and ensure compliance: Compare the proposed renewal terms with industry standards and ensure the company remains fully compliant throughout its hybrid transition.

The complexity of balancing cloud innovation with on-premises stability made this renewal particularly challenging. The provider engaged Redress Compliance to help craft an agreement supporting its hybrid strategy without unnecessary spending or risk.

The Process

  1. Comprehensive License & Cloud Usage Audit:
    • Reviewed all Microsoft deployments across on-premises data centers and existing Azure cloud subscriptions.
    • Mapped current licenses (Windows Server, SQL Server, Office, etc.) to actual usage, identifying underutilized licenses that could be repurposed for cloud deployments.
    • Assessed which workloads were planned to move to the cloud versus remain on-premises, to forecast future licensing needs accurately.
  2. Hybrid Cloud Alignment Planning:
    • Collaborated with the telecom’s cloud architecture and IT teams to outline a three-year hybrid cloud roadmap.
    • Determined where Azure services (such as Azure Virtual Machines, data analytics, and AI services) would be introduced or expanded, and where on-premises systems would be retained for compliance or performance.
    • Identified Microsoft programs and offerings (like Azure Hybrid Benefit and dual-use rights) that could support simultaneous on-prem and cloud use during migrations.
  3. License Optimization and Rebalancing:
    • Eliminated redundant licenses by consolidating systems and retiring legacy applications that had moved to cloud alternatives.
    • Reallocated surplus on-premises licenses (e.g., Windows Server and SQL Server) to cover cloud usage through Azure Hybrid Benefits, reducing the need to purchase new cloud subscriptions.
    • Optimized user licenses for productivity software by right-sizing Microsoft 365 plans—ensuring each employee had the appropriate level (for example, shifting some users from Office 365 E5 to E3 where advanced features were not required).
  4. Negotiation Strategy Development:
    • Benchmarked the telecom provider’s proposed EA pricing and terms against other large enterprises and European telecom industry peers.
    • Prepared a data-driven negotiation plan highlighting the client’s software usage analysis and hybrid cloud plans. This plan underscored the fact that Microsoft’s initial proposal didn’t match the company’s needs, such as inflexible user counts or insufficient cloud credits for planned Azure growth.
    • The telecom’s long-term commitment to Microsoft technologies was emphasized, but its insistence on flexible terms allowed agility (for example, the ability to adjust certain license quantities annually to reflect the actual usage split between cloud and on-prem).
  5. EA Terms Negotiation and Finalization:
    • Engaged with Microsoft on behalf of the client to negotiate more flexible EA terms. Redress Compliance secured provisions that allowed the company to “swap” certain on-prem licenses for equivalent cloud services over the term as their usage shifted, without double-paying for both environments.
    • Negotiated significant discounts on Azure consumption and Microsoft 365 licenses, leveraging the client’s size and the benchmark data. This included obtaining additional Azure credits that could be used as needed, supporting the hybrid initiatives without upfront overspend.
    • Ensured the final agreement included clear language supporting hybrid use rights. This meant the company could run identical workloads on-premises and in Azure temporarily during migrations or peak periods, staying compliant throughout. This removed the fear of licensing gaps as systems were moved to the cloud.

Results

  • Cost Savings: The renegotiated EA delivered substantial savings. The company achieved an immediate 15% reduction in annual Microsoft licensing costs, translating to approximately $5 million in annual savings. Over three years, total savings from license optimization and negotiated discounts were projected at $15 million.
  • Hybrid Flexibility: The new EA terms explicitly support the hybrid cloud strategy. The telecom provider can now transition workloads to Azure at its own pace, with no penalty for dual-use of licenses during migration periods. This flexibility ensures that critical on-prem systems and new cloud services coexist, enabling innovation without risking compliance or incurring extra licensing fees.
  • Optimized License Utilization: The company reduced wasteful spending on unused licenses by over 20% through the internal audit and cleanup. All Microsoft licenses in the environment are now either fully utilized or mapped to a planned future use. This elimination of shelfware means the company only pays for software it needs and uses.
  • Improved Compliance and Governance: With Redress Compliance’s guidance, the telecom established stronger software asset management practices. It now has better visibility into license usage across both on-prem and cloud environments, and processes in place to continuously monitor and adjust licenses as the hybrid environment evolves. This proactive management keeps the company compliant and avoids unbudgeted true-up surprises.
  • Strategic Cloud Enablement: By negotiating a cloud-friendly EA, the company set the stage for upcoming projects like AI-driven network management and IoT-based monitoring under favorable terms. The EA’s flexibility and earned cloud credits mean new Azure services can be adopted quickly and cost-effectively, supporting the telecom’s innovation and growth objectives over the agreement term.

Quote from the CTO:

“Working with Redress Compliance was a game-changer for us. They understood our vision of a hybrid cloud environment and made sure our Microsoft agreement would enable that vision. We ended up with an EA that fits our needs perfectly — we can innovate in the cloud while still optimizing our on-prem systems, all without paying for unnecessary licenses. Redress’s expertise gave us confidence and significant savings in the process.”

Key Results

  • Annual Cost Reduction: ~$5 million saved annually (15% cut in Microsoft spend) through optimized licensing and negotiated discounts.
  • Hybrid Cloud Enabled: Gained contractual flexibility to run services in Azure and on-premises environments concurrently during transitions, supporting a phased cloud migration with no extra licensing cost.
  • License Optimization: Eliminated over-licensing by ~20%, removing unused licenses and reassigning entitlements to match actual usage.
  • Compliance Assured: Achieved full Microsoft compliance in both on-prem and cloud domains, with improved tracking and governance to maintain compliance in the future.

This case demonstrates Redress Compliance’s ability to negotiate complex enterprise agreements that align with a client’s technology strategy. For a telecom provider pursuing a hybrid cloud initiative, Redress delivered a tailored EA solution that maximized value, ensured compliance, and provided the flexibility needed for future growth.

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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