How to Prepare for Your Microsoft EA Renewal – A 12-Month Game Plan
Introduction – Why Early Preparation Matters
Renewing a Microsoft Enterprise Agreement (EA) is more than routine paperwork – it’s a strategic project that will shape your IT spending and capabilities for the next three years.
An EA renewal means renegotiating licenses for core platforms like Microsoft 365, Azure, and more.
Waiting until the last 3 months to prepare is risky: you’ll be rushed into decisions, potentially carry over unused licenses (“shelfware”), and lose leverage to negotiate better terms.
Procrastinating often leads to vendor-driven outcomes where you accept Microsoft’s default proposal at standard pricing because time is running out. Read our Microsoft EA Renewal Negotiation Strategies for 2025.
In 2025, EA renewals are especially complex. Microsoft is introducing new AI-powered licensing (like the Microsoft 365 Copilot add-on at ~$30 per user/month with no volume discounts) that can significantly impact your budget.
At the same time, Microsoft is ending traditional volume-based discounts for online services – meaning that after November 2025, large enterprises no longer automatically get price breaks for higher seat counts.
The company is also pushing a cloud-first agenda, encouraging customers to adopt subscription cloud services and Azure commitments. These shifts raise the stakes for your renewal: if you simply “rinse and repeat” last cycle’s plan, you could end up overpaying or locked into inflexible terms.
The good news is that starting your renewal planning 12 months in advance puts you back in control. With a full year’s runway, you can methodically gather data, align stakeholders, and craft a negotiation strategy before Microsoft’s sales team sets the agenda.
Early preparation means you set the priorities, eliminate waste, and enter talks with a clear vision – rather than scrambling at the eleventh hour.
The following 12-month game plan breaks down what to do at each key milestone to maximize savings and minimize surprises in your Microsoft EA renewal.
T–12 Months: Form Your Team & Gather Data
Form a cross-functional renewal team:
Kick off the process a full year before your EA expiration by assembling a dedicated team for the renewal. Include stakeholders from IT (to provide usage data and technical insight), Procurement/Sourcing (to lead negotiation and vendor communications), Finance (to set budget boundaries and savings goals), and Legal (to review contract terms).
Engage your CIO and other executives as sponsors, since their support will be crucial in both internal decision-making and final approvals.
A collaborative team ensures all angles are covered – for example, IT knows what’s actually being used, Finance knows what’s affordable, and Legal catches any risky contract language.
Launch an internal EA usage audit:
With your team in place, conduct a thorough review of your current licenses and how they’re being used. Pull your latest inventory (Microsoft Licensing Statement and current EA contract paperwork) and compare it to actual deployment and user counts.
Identify shelfware (licenses you’ve paid for but aren’t using), such as software deployed to only a fraction of entitled users or premium features (e.g., in Microsoft 365 E5) that aren’t fully utilized.
Look for redundant or overlapping solutions – for instance, if you’re licensing Microsoft security add-ons that duplicate capabilities of other security tools in your environment.
Also, verify any areas of over-use or compliance risk, where usage might exceed entitlements and trigger costs at renewal. The goal is to establish a baseline of what you own versus what value you’re getting from it.
By the end of this stage, you should have a clear picture of your current Microsoft footprint and a list of optimization opportunities.
Perhaps you discover 20% of your Office 365 licenses are unassigned, or that several workloads running in Azure could be rightsized. This data is gold for renewal planning – it tells you what to cut, what to keep, and sets the stage for informed negotiations.
Checklist:
- Renewal team appointed (IT, Procurement, Finance, Legal leads identified)
- Current contract and license inventory reviewed (EA entitlements vs. actual usage)
- Usage vs. entitlement baseline created (shelfware and gaps documented)
Negotiation is a team game; read Building Your Microsoft EA Negotiation Team and Internal Playbook.
T–9 Months: Define Requirements & Budget
With nine months to go, turn your focus to the future. This is the time to decide what your business really needs from Microsoft over the next three years and set the financial guardrails for the deal.
Map out business and IT requirements:
Work closely with business unit leaders and IT architects to forecast your organization’s needs for the upcoming EA term. Consider growth plans – are you hiring significantly or expanding into new regions? Factor in digital transformation initiatives – for example, migrating on-premises servers to Azure cloud, rolling out Teams Phone or Dynamics 365, or adopting new AI tools.
Identify which new Microsoft products or services might add value (e.g. will you want to pilot Microsoft Copilot AI for certain teams?). Likewise, pinpoint anything you might scale down or eliminate (maybe you’re moving some workloads to a competitor’s platform or retiring legacy systems).
By aligning the EA renewal with your three-year roadmap, you ensure you’re not over-buying or under-buying. This requirement definition should be detailed: break down how many of each license or subscription you anticipate needing, and of what type, each year of the term.
Align on a preliminary budget and goals:
Next, engage the CFO or Finance team to establish your budget objectives. Based on the usage audit and business needs, estimate the cost of renewing “as-is” versus optimized scenarios.
For instance, if you plan to drop unused licenses or switch some users to cheaper plans, how much would you save? Set clear targets – perhaps the goal is to keep annual spend flat despite growth, or to achieve a certain percentage cost reduction through negotiations and trimming waste. Also discuss how much flexibility to budget for new investments (like adding Azure services or security features down the road).
Finance will need to approve a preliminary renewal budget, so everyone is on the same page about what the organization is willing to spend.
It’s much better to discover now, not two weeks before signing, that the CFO expects a 10% cost reduction when Microsoft’s proposal is showing a 10% increase!
Early budget alignment also helps you decide on trade-offs during negotiation (what you’re willing to cut vs. must-haves).
Prioritize flexibility and risk mitigation:
As you define requirements, build in a buffer for the unexpected. Think about potential mergers, acquisitions, or divestitures in the next few years – if you acquire a company, you’ll need to fold them into your Microsoft agreement; if you sell a division, you’ll want to transfer or drop those licenses.
Ensure the renewal plan accounts for these by possibly including contract terms for true-down (reducing license counts) or transfer rights for divested units.
Similarly, consider workforce fluctuations or shifting strategies: you might want the ability to scale Azure consumption up or down without penalty, or to swap certain product licenses if you adopt a different technology.
Microsoft often offers better discounts if you commit to a fixed number of licenses, but that can backfire if your needs shrink. Strive for a balance between cost savings and flexibility.
In practice, this might mean not blindly renewing a company-wide EA at the highest SKU level for all users; instead, tailor the enrollment to different user profiles (perhaps only power users receive E5, while others receive E3) and include clauses for adjusting quantities annually. Define these needs now so they can be part of your negotiation strategy.
Checklist:
- Business and IT roadmap aligned to Microsoft licensing needs (growth, projects, AI plans identified)
- Cost reduction and flexibility goals set (savings targets and must-have contract terms documented)
- Preliminary renewal budget approved by Finance/CFO (established spending limits for the EA term)
T–6 Months: Engage Stakeholders & Microsoft
At the six-month mark, your internal plan solidifies, and it’s time to prepare the battlefield for negotiations.
This phase is about ensuring all stakeholders are coordinated and beginning low-stakes engagement with Microsoft on your terms.
Brief and rally executive sponsors:
Now is when you want your CIO, CFO, and other key executives fully in the loop and backing your strategy. Provide a clear briefing on the renewal game plan – what you intend to negotiate, the targets you’ve set, and any significant changes (e.g., “we plan to drop product X and replace it with Y to save costs” or “we will be pushing Microsoft for flexibility on Azure spend”).
Executives should understand the importance of adhering to the plan and the risks associated with deviating from it. This is crucial because Microsoft’s sales teams often employ a “divide and conquer” tactic, going around the core negotiators to pitch deals to high-level execs or department heads. If your leadership is prepped, they won’t be swayed by off-the-cuff vendor calls or last-minute scare tactics.
Additionally, having executive support means if you need to invoke a “walk-away” scenario or apply pressure, your leadership is ready to hold firm. Essentially, you’re creating a unified front so Microsoft hears one coherent message from your organization.
Validate needs with end-users and IT leads:
While executives are on board, also double-check your assumptions with those on the ground. In these months, gather any final feedback from department heads or power users about Microsoft services.
For example, IT application owners might confirm that certain teams truly don’t need the extra Power BI Pro licenses you were planning to cut – or conversely, you might learn that a new project will require more Azure resources than initially thought.
This “reality check” helps fine-tune your requirements before you commit to them for negotiation. It can be as informal as conversations in IT governance meetings, or a quick survey to gauge satisfaction with current tools. The goal is to avoid an unpleasant surprise post-renewal (“Why didn’t we include X? Now we have to buy it retail because the contract missed it.”).
By six months out, you should have high confidence that your planned license mix and quantities reflect actual needs across the business.
Initiate informal talks with Microsoft (on your terms):
With internal alignment strong, you can start engaging Microsoft to set the tone. Reach out to your Microsoft account manager or Licensing Solution Provider (LSP) without showing urgency. Let them know you’re planning for renewal and outline a few key concerns or interests – for example, mention that you’re reviewing all options to optimize licensing, or that leadership is focused on cost efficiency this cycle. The message should be: we are proactive and have a plan.
At this stage, avoid divulging too much detail or any hint that you “must” get a deal done quickly.
In fact, it’s okay to be a bit non-committal – you might ask Microsoft to share any upcoming product changes or incentives (“Are there new offers or licensing programs we should be aware of as we plan?”) to gather intelligence. Keep the tone cooperative but controlled.
The benefit of early vendor contact is that you can gauge Microsoft’s posture: are they eager to push a particular product or upsell (e.g., a big Azure consumption deal or the latest Microsoft 365 bundle)? Do they offer to help assess your environment (which could be useful, but be cautious about sharing sensitive data)?
Logging these insights now helps shape your negotiation tactics later. Just remember, don’t signal desperation – for example, avoid saying “Our renewal is in 6 months and we’re worried about losing access.” Instead, project confidence: “We’re planning carefully to make sure any renewal aligns with our strategy – we’ll be in touch when we’re ready to discuss specifics.”
By taking the initiative early, you position yourself as a well-prepared customer, which subtly pressures Microsoft to bring their A-game or risk you exploring alternatives.
Checklist:
- Executive sponsors (CIO/CFO) briefed on renewal strategy and on board
- Business case for license optimization finalized (document showing why changes and savings make sense)
- Initial vendor engagement started (informal conversation with Microsoft account team opened, with no commitments made)
T–3 Months: Enter Formal Negotiations
By three months before expiration, preparation time is over – it’s now execution time.
This is when formal negotiations kick into high gear, and you present your requirements to Microsoft in earnest.
Issue your requirements and RFP to Microsoft: Rather than simply waiting for Microsoft’s quote, take control by giving them a structured outline of what you want in the renewal. This could be in the form of a written requirements document or RFP-style letter.
Detail the products, quantities, and specific terms you are looking for, based on the homework you’ve done. For example: “We intend to renew 2,000 Microsoft 365 E3 licenses and 500 E5 licenses, drop 300 Visio licenses, and add 100 Power BI Pro licenses. We require the ability to reduce our user count by 10% annually without incurring any penalties.
We are interested in a proposal for Microsoft 365 Copilot for up to 200 users if economically feasible.” By laying out your needs, you prevent the common tactic of Microsoft’s initial proposal being loaded with things you don’t need or higher counts “just in case.” You’re essentially anchoring the negotiation to your terms.
Also, make it clear that any proposal should align with your stated budget constraints and outline any alternative packaging you’d consider (for instance, if Microsoft has a special bundle or promotion, it must meet your cost objectives to be considered).
Providing a clear list of requirements flips the dynamic – Microsoft’s team now has to work from your playbook rather than you reacting to theirs.
Leverage benchmarks and alternative options: As negotiations commence, bolster your position with data and a hint of competition. By now, you should have researched market benchmarks – what discounts or pricing have similar organizations achieved? If you have consultants or industry peers, use that info (without revealing confidential details) to justify your targets.
For example, “We’ve seen enterprises of our size get around 20% off the Office 365 E5 SKU, so we’re expecting a competitive price in that range.” Additionally, remind Microsoft that you have alternatives: even if switching away from Microsoft completely is unlikely, you can introduce specific pressures. Perhaps you’ve evaluated moving some workloads to Google Workspace or AWS, or you could opt for Microsoft’s CSP (Cloud Solution Provider) program as a fallback (which now has similar pricing but more flexibility).
You might say, “We’re prepared to explore a shift of some services to other providers or a short-term CSP arrangement if needed to meet our goals.”
The idea isn’t to threaten aggressively, but to signal you’re not utterly dependent on signing whatever is offered. Microsoft negotiators are motivated when they sense a real risk of losing some business. Keep your alternative plans realistic, though – bluffing something implausible can backfire if they call it.
Even within Microsoft’s catalog, having options gives leverage: e.g. “If the price for Product X isn’t favorable, we may decide not to include it in the EA and look for a third-party solution or delay that project.” Backing these claims with your thorough internal analysis (from the earlier steps) makes them credible.
Align proposals with a walk-away plan: As you negotiate, always know your “walk-away” scenario – what you’ll do if a satisfactory deal can’t be reached by expiry. Before entering final negotiations, your team should agree on non-negotiables (such as the price per user not exceeding $Y or a specific contractual protection being included). If Microsoft’s best offer doesn’t meet these, are you prepared to say “no deal for now”? That could mean extending the existing agreement briefly, or even letting it lapse and using month-to-month subscriptions as a stopgap.
It’s a bold move, but sometimes necessary to avoid a bad 3-year contract. Communicate internally that no deal is better than a terrible deal – this prevents panic if the deadline looms without an agreement. When Microsoft sees that you have a coherent fallback plan and are not afraid to use it, your negotiating power increases dramatically.
Importantly, ensure this stance is backed from the top: the CIO and CFO must be willing to tolerate a Plan B if required. For example, if your walk-away plan is to move everyone to a 1-month CSP subscription after the EA end date, make sure operations can handle that switch and that leadership approves the strategy.
By the 3-month mark, you should be exchanging counteroffers with Microsoft, iterating on terms and discounts. Stick to your data-driven approach – if numbers come back high, challenge them with your usage analysis (“We don’t need that many licenses, and here’s our data to prove it”) or with external benchmarks (“That rate is above market for an EA of this size”).
As talks approach the final month, it’s common for Microsoft to apply pressure (“We need to finalize this soon”). Hold steady to your timeline – you planned 12 months out so you wouldn’t have to accept a subpar deal under time duress.
Checklist:
- Negotiation playbook finalized (roles, tactics, and fallback scenarios defined for the team)
- Benchmarking data reviewed and used to set target pricing/discounts
- Walk-away strategy confirmed (internal agreement on Plan B if renewal terms fall short)
Risk Planning: What If No Deal by Expiry?
Even with great preparation, you should be ready for the possibility that a final deal isn’t reached by the EA’s expiration date.
This is your contingency plan – a safety net to ensure business continuity and maintain negotiating leverage.
Shift to month-to-month alternatives: One option is to temporarily move your licenses to Microsoft’s Cloud Solution Provider (CSP) program or another short-term vehicle. CSP lets you pay monthly and can be arranged through a partner quickly.
For example, if your EA lapses on June 30 and you haven’t signed a new one, you could have a CSP agreement in place for July onward so that users continue to have access to Office 365, Azure, etc.
Yes, CSP might be slightly more expensive per month and lacks long-term discounts, but it buys you time to negotiate without the ticking clock of services shutting off.
The key is that Microsoft knows you have this capability, so they can’t use service interruption as pressure. Make sure to coordinate with a Microsoft partner or reseller ahead of time (while hoping you won’t need to use this option).
Negotiate a short-term extension:
If talks are progressing but need a bit more time, you can ask Microsoft for an EA extension. Sometimes they’ll agree to extend the existing agreement by a few months (3-6 months typically) under the same terms and pricing. This is more likely if both sides are engaged in good faith on a new deal.
An extension prevents a lapse and signals that you won’t sign just anything due to the deadline – you’re willing to prolong discussions to get the right outcome. However, try not to extend so long that you lose momentum; use any extra time wisely to finalize outstanding issues.
Pause or re-scope projects: Another contingency is delaying the deployment of any new Microsoft-dependent projects until you have a satisfactory agreement. If there’s no renewal in place, you might hold off on that company-wide Teams Phone rollout or postpone adding those 500 users to Dynamics 365. Slowing down non-critical rollouts reduces immediate licensing needs, which can remove urgency. It also shows Microsoft that you won’t rush into additional commitments under pressure.
Throughout all contingency planning, the golden rule is never to reveal to Microsoft that you “must” sign at any cost. The moment the vendor believes you can’t live without an EA renewal by the exact date, you lose leverage.
By contrast, if they see you have thought-out alternatives – even if they are short-term – they’ll be more inclined to meet your requirements rather than risk you executing your Plan B.
Internally, having these plans ready will keep everyone calm if negotiations go down to the wire. You can confidently carry the talks into the final weeks (or beyond, with an extension) knowing you won’t face a crisis at midnight of the expiration date.
Strategy Table: 12-Month Renewal Preparation
Below is a summary of key actions, involved stakeholders, and risks if you neglect each milestone in your 12-month EA renewal preparation timeline:
| Timeline | Key Actions | Stakeholders Involved | Risk if Ignored |
|---|---|---|---|
| T–12 Months | Form team; run internal audit of licenses | IT, Procurement | Entering negotiation with no data leverage (flying blind on usage) |
| T–9 Months | Define scope of needs; set budget & flexibility goals | CIO, CFO | No clear savings targets or roadmap alignment – deal may overshoot budget or miss business needs |
| T–6 Months | Align with executives; start informal vendor talks | IT, Finance, Legal | Microsoft drives the agenda; internal leaders not backing the plan if last-minute decisions are needed |
| T–3 Months | Engage in formal negotiations; apply leverage (benchmarks, alternatives) | Full team (all above plus legal/exec sign-offs) | Rushed last-minute deal with poor discounts and unfavorable terms due to time pressure |
Note: Each phase builds on the previous one. Skipping a step – like not auditing usage early or not involving finance until the end – can leave you scrambling and conceding to Microsoft’s terms. Following this timeline ensures you’re negotiating from a position of clarity and strength, not haste.
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