Microsoft EA Renewals and M&A: Consolidating Licensing Post-Acquisition
Why M&A Complicates Microsoft EA Renewals
Mergers and acquisitions often leave enterprises with a patchwork of Microsoft licensing contracts. Each company brings its own EA with distinct terms, timelines, and pricing, creating complexity when those worlds collide.
Renewal dates rarely align, pricing levels differ, and overlapping licenses result in potential waste. For a complete overview, read our guide to Microsoft EA renewals.
In short, EA renewal during mergers and acquisitions is challenging because you inherit multiple agreements that weren’t designed to work together.
Key complications include:
- Misaligned renewal cycles: Different EA end dates make it hard to plan one unified renewal.
- Uneven pricing: Each company had its discount tier, so one side may be paying more per license than the other.
- Duplicate licensing: After the merger, both firms may be paying for the same software or services twice.
- Contractual quirks: Enterprise-wide clauses and true-up rules in separate EAs can conflict when companies combine.
Step 1 — Inventory and Map the Combined Licensing Estate
Begin by conducting a comprehensive inventory of all Microsoft licenses across both organizations. Gather every active agreement: Enterprise Agreements, Cloud Solution Provider (CSP) subscriptions, Microsoft Customer Agreements (MCA), and any other volume or cloud contracts.
For each one, document key details (end dates, products/SKUs, user counts, pricing levels, and Software Assurance benefits). This map will reveal overlaps and gaps.
With the full picture in hand, identify redundant or unused licenses (also known as “shelfware”). For example, if both companies have 500 Office 365 E5 subscriptions but the merged entity only needs 800 total, you’ve found 200 licenses that can potentially be cut at renewal.
Also check for any compliance gaps – situations where usage isn’t fully covered – so you can address those proactively.
By mapping the combined estate, you lay the groundwork for consolidation and ensure that there are no surprises when negotiating as a unified organization.
Step 2 — Align Renewal Dates and Terms
Next, tackle the timing misalignment. If you’re wondering how to align Microsoft EA renewals after mergers, the key is to co-terminate contracts so that the new company has a single common renewal date for Microsoft agreements.
This may require adjustments such as:
- Short extensions to co-term: Extend a shorter EA so it ends at the same time as the other.
- Early renewal or merger: If feasible, roll the smaller contract into the larger one’s cycle at renewal.
- Carry over best terms: Bring any favorable clauses from each legacy contract into the new consolidated EA.’
Read about How to Justify Microsoft EA Spend at Renewal to Your CFO.
Step 3 — Reconcile Price Levels and Discounts
One of the biggest opportunities in an M&A-driven renewal is correcting pricing disparities.
Microsoft EA consolidation should result in everyone paying the lowest price either of the legacy companies had. If one firm was on a higher pricing tier (due to smaller size), leverage the combined volume to move to the best tier:
- Unify pricing at the best tier: Utilize the larger volume to secure the deepest discount for all products, eliminating any higher rates one side was previously paying.
- Retain special deals: If one side had extra discounts or grandfathered pricing on certain products, carry those forward into the new agreement (or negotiate them even lower).
Step 4 — Leverage Increased Volume for Deeper Concessions
A merger instantly increases your purchasing clout with Microsoft. When it’s time to renew, use that volume leverage to extract more value beyond just per-license pricing:
- Maximize discounts: Your larger volume should qualify for a deeper discount—push for a better rate than either company would have offered alone.
- Ask for extras: Large deals can often include perks such as training credits, support, or additional cloud credits. Request these incentives to boost value.
- Improve terms: Negotiate buyer-friendly terms (such as capped price increases and flexible true-ups) to protect your interests.
Think of the post-acquisition renewal as a reset of the relationship. You’re now a bigger customer, and Microsoft will be keen to keep that revenue. Use that fact to negotiate not just on price, but on every aspect of the contract that can deliver value or reduce risk for your organization.
Microsoft EA Renewal Decision Tree: Renew, Downsize, or Exit?
Step 5 — Manage Microsoft’s Push to MCA-E or CSP
Microsoft may encourage you to adopt its newer licensing models, including the Microsoft Customer Agreement for Enterprise (MCA-E) or the Cloud Solution Provider (CSP) program.
These offer more flexibility (month-to-month cloud subscriptions, easy adjustments) compared to a traditional EA’s three-year lock-in.
That can be appealing if your post-merger environment is in a state of flux. However, be cautious: you could lose some price advantages.
Your Microsoft EA renewal strategy post-M&A should weigh these alternatives carefully rather than automatically accepting a new model.
EAs reward big commitments with big discounts, whereas CSP pricing is often higher per seat unless specially negotiated.
Evaluate these options against your needs. If you expect significant short-term changes in user count or structure, a flexible model may help prevent overbuying.
However, if the combined company is stable and large, a consolidated EA is likely to deliver better pricing.
Either way, if Microsoft suggests switching, negotiate hard. Insist on keeping volume discounts or getting transition credits.
Don’t let a new contract model erase your leverage — the goal is to keep costs optimized, whether under an EA or an alternative.
Read about How to Benchmark Microsoft EA.
Step 6 — Renegotiate as a Unified Entity
Approach Microsoft as one combined enterprise. In any Microsoft EA negotiation during M&A, presenting a unified front is critical.
Internally, form a single negotiation team with stakeholders from both sides, and agree on your goals and walk-away points upfront. Then present a united front:
- One voice: Make it clear that all discussions now cover the merged organization as a whole. Don’t allow Microsoft to treat the former companies as separate customers.
- Unified messaging: Align internally on needs and budget, so everyone on your team delivers the same message to Microsoft. This prevents mixed signals or internal disagreements from weakening your position.
By negotiating as a unified entity, you signal your increased importance as a customer. Microsoft will recognize that it must offer terms that reflect your new scale, or risk the entire consolidated business.
Case Example — M&A Renewal Outcome
For example, consider an EA renewal in a mergers and acquisitions scenario. Company A (with 20,000 users) acquires Company B (5,000 users), and each has its own EA.
Rather than maintaining two separate deals, the merged company extended B’s EA to co-terminate with A’s and then negotiated a single new EA for all 25,000 users.
During preparation, they identified and eliminated overlapping Office 365 licenses, thereby avoiding duplicate payments for the same users.
The combined volume bumped the new EA into a higher discount tier, cutting Company B’s per-user costs by roughly 15%.
Microsoft suggested moving the smaller segment to CSP for flexibility, but the team opted to maintain a single consolidated EA to preserve discounts.
Ultimately, the unified agreement resulted in significant savings and a simpler contract compared to running two separate EAs.
This EA renewal mergers and acquisitions case study highlights how a merger can be leveraged for cost reduction rather than cost overruns.
Read about our Microsoft EA Optimization Service.
