How We Calculate Microsoft EA Savings
Every claim on this site — the 32% average cost reduction, the 500+ engagements, the $2.1B under advisory — is grounded in a specific, auditable methodology. This page documents that methodology in full: data sources, sample size, calculation formula, and the limitations we think you should weigh.
1. Scope of the dataset
Our benchmark dataset includes every completed enterprise advisory engagement where Microsoft Negotiations was retained to represent the buyer between January 2016 and the most recent closed quarter. Engagement types included: EA new purchase, EA renewal, MCA-E migration, CSP consolidation, true-up, audit response, and standalone advisory on specific SKUs (Copilot, Azure MACC, Dynamics 365).
Engagements included
- 500+ discrete closed engagements (count updated quarterly)
- $2.1B in aggregate Microsoft annual spend represented (calculated as the sum of each client's annual committed spend under the advised contract)
- Industries: financial services, pharmaceutical, healthcare, manufacturing, retail, energy, professional services, government, technology, higher education
- Geographies: North America, Europe (UK, DE, FR, NL, Nordics), Australia, Japan
- Enterprise sizes: Global 2000 and mid-market (500+ seats minimum)
Engagements excluded from the savings calculation
- Engagements where we were retained after contract signature (advisory-only, no negotiation)
- Engagements where the buyer withdrew from negotiation for reasons unrelated to commercial terms
- Engagements where the client did not document or share the pre-negotiation Microsoft proposal (baseline missing)
- Engagements where scope changed materially mid-negotiation (e.g., acquisition closed, making before/after incomparable)
2. Calculation formula
For each engagement, we calculate the savings rate as:
| Variable | Definition |
|---|---|
| Initial Proposal Value (IPV) | The total contract value (TCV) of Microsoft's first formal written proposal for the in-scope SKUs, normalized to the final contract term. |
| Final Executed Value (FEV) | The TCV of the signed commercial instrument for the same SKUs over the same term. |
| Savings Rate | (IPV − FEV) ÷ IPV, expressed as a percentage. |
The firm-wide "32% average" is the arithmetic mean of all engagement-level savings rates across the qualifying dataset. We do not weight by contract size, because doing so would over-state the figure (larger contracts tend to have larger absolute savings but smaller percentage savings). Unweighted mean is the more conservative statistic.
3. What the savings rate does and does not include
Included
- List price reductions (discount improvements on list)
- SKU optimization (e.g., avoiding unused E5 seats by right-sizing to E3 + targeted add-ons)
- Licensing program optimization (e.g., MCA vs EA vs CSP cost modeling)
- Commercial terms that translate to dollar value (price lock, protection from surcharges, flat pricing on true-up, capped uplift on renewal)
Not included
- Non-monetary contract protections (audit clauses, support SLA improvements, data-residency commitments) — we report these separately in engagement deliverables but do not assign a dollar value
- Value derived from services we did not directly negotiate (e.g., ancillary reseller margin)
- Efficiency gains downstream of the negotiation (e.g., FinOps savings after deployment)
4. Limitations and caveats
We state these plainly because we think they matter.
- Selection bias. Clients who hire an independent advisor are, by definition, the subset that believes their Microsoft proposal is negotiable. Our dataset is therefore not representative of the broader Microsoft EA customer population.
- Baseline definition. "Microsoft's initial proposal" is the first formal written proposal. In practice Microsoft sometimes offers lower numbers before formalizing a proposal; if that occurs without documentation, it is not captured in the IPV.
- Your outcome will differ. 32% is an average across heterogeneous situations. Individual outcomes range from the low single digits (renewals where Microsoft's initial offer was already competitive) to above 50% (situations with material over-licensing or poorly-structured prior contracts). Past performance is not a predictor of specific engagement outcomes.
- Industry variance. Financial services and pharmaceutical clients tend to outperform the mean; government and higher education tend to underperform it, reflecting procurement constraints on each.
5. Data governance and independence
All client data is held under signed confidentiality agreements. The savings benchmark is built only from anonymized outcome data with pre- and post-negotiation figures documented in the engagement file. We do not share client names publicly without explicit written permission, and no client-identifying data is used to produce any public statistic.
Microsoft Negotiations is independent: we are not a Microsoft partner, we do not resell Microsoft licenses, and we do not receive commissions or incentives from Microsoft or from any Microsoft partner. Our advisory fee is billed directly to our client.
6. External attestation
We intend to commission independent attestation of this methodology from a qualified third-party firm in 2026. Attestation status will be published on this page when complete.
7. Update cadence
The benchmark statistics on this site are recalculated quarterly. This page is updated at the same cadence. The Last reviewed date at the top reflects the most recent review.
Want the methodology in more depth?
We publish a 12-page methodology brief (PDF) that covers per-industry savings distributions, sample size by engagement type, and the contract levers that drive outcomes.
Request the Methodology Brief