South African Mining Company Avoids Unnecessary EA Renewal After Internal Audit

South African Mining Company Avoids Unnecessary EA Renewal After Internal Audit

Challenge

A leading mining company in South Africa, operating multiple mines and offices across the region, was approaching the end of its three-year Microsoft Enterprise Agreement. The agreement covered a range of software from Windows Server and SQL databases to Office 365 subscriptions for corporate staff.

As the renewal quote arrived, the company’s leadership was concerned that the proposed renewal costs were very high given the organization’s recent changes.

In the past year, the mining firm had undergone restructuring and efficiency improvements, leading to a reduced headcount and consolidation of IT systems.

They engaged Redress Compliance to perform an internal licensing audit and strategy review before committing to a renewal.

The main objectives were to:

• Assess actual usage and needs: Determine which Microsoft licenses and cloud services were truly being used, and which ones were idle or could be eliminated.
• Ensure compliance without overbuying: Verify that the company remains compliant with Microsoft licensing rules and identify whether it already owns sufficient perpetual licenses to continue operations without a new EA.
• Evaluate renewal vs. alternatives: Analyze whether renewing the EA was necessary or if the company could save costs by not renewing and using a different approach (such as relying on existing owned licenses or smaller subscription agreements for future needs).
• Avoid unnecessary spending: If the audit found that the company’s needs were overestimated in the renewal proposal, avoid locking into another expensive multi-year contract that didn’t align with actual requirements.
• Plan for continuity: If the EA is not renewed, there should be a clear plan for how the company would receive any required software updates or new licenses in the coming years without disruption to operations.

The challenge for Redress Compliance was to provide a clear, data-driven recommendation on whether the mining company should renew its EA or confidently step away from it, all while staying compliant and meeting the business’s IT needs.

The Process

1. Comprehensive Internal Audit of Licenses:
   • Conducted a full inventory of Microsoft software deployments across all mining sites and offices, including servers, PCs, and any cloud services.
   • Reviewed entitlements from the existing EA and prior purchases, compiling a list of the company’s perpetual licenses (e.g., Windows and Office licenses that would remain valid even if the EA lapsed).
   • Interviewed IT administrators and looked at usage logs to understand real utilization, such as how many Office 365 accounts were actively in use, and which server products were critical versus those that were legacy or slated for decommission.
2. Usage vs. Entitlement Analysis:
   • Analyzed the inventory data to identify unused and underutilized licenses. For example, the audit discovered that hundreds of Office 365 E3 licenses were assigned to former employees or contractors no longer with the company, and several server licenses were tied to systems that had already been retired.
   • Matched current usage against existing entitlements, finding that the company’s existing perpetual licenses could cover the current needs in many areas (like Office productivity suites and database servers). Thanks to the recent downsizing and IT consolidation, excess license capacity could be put to use.
   • Verified that all critical systems would remain properly licensed even if no new EA was signed, by planning to reallocate some licenses from decommissioned systems to active ones where needed.
3. Cost-Benefit Evaluation:
   • Created a side-by-side comparison of costs: renewing the EA vs. not renewing and instead using alternate licensing methods. This analysis accounted for the cost of purchasing a small number of licenses or subscriptions on an as-needed basis rather than pre-paying for a large bundle under an EA.
   • Quantified the potential savings of avoiding the EA renewal. The data showed that the company would save a significant sum by not committing to a new EA, on the order of millions of dollars over three years. This represented roughly 40–50% of the projected spend that the EA renewal would have required.
   • Examined scenarios for any necessary cloud services: for instance, if certain teams still needed Office 365 or Azure services, those could be procured in smaller quantities (month-to-month) without requiring an enterprise-wide contract. This flexible approach was compared against the “one-size-fits-all” cost of an EA to illustrate the trade-offs clearly.
4. Strategic Decision and Microsoft Engagement:
   • Presented the audit findings and cost analysis to the company’s executive team, including the CFO and CIO. The evidence was compelling that a full EA renewal would result in paying for far more licenses than the company needed. Redress Compliance recommended not renewing the EA and instead leveraging existing assets and purchasing new licenses only as necessary.
   • Supported the client in communications with Microsoft. Armed with detailed data, the company informed Microsoft of its decision to forgo the renewal. In some cases, Microsoft responded by offering revised, smaller-scale proposals, but the analysis gave the mining company confidence to stick with its plan. The client could push back against any pressure to renew by demonstrating that their licensing needs were already met without a new EA.
   • Developed a transition plan to cover any minor gaps. For example, if certain software updates or security patches would no longer be available without an active Software Assurance (which comes with an EA), the plan accounted for obtaining those updates separately or using third-party support if needed. In practice, most essential software was already owned outright in a version that would remain supported soon, so the risks were minimal.
5. Implementation of a New Licensing Model:
   • After the EA lapsed, Redress Compliance assisted the company in adjusting its software asset management practices. This included setting up processes to periodically review license needs and procure additional licenses or cloud subscriptions individually if the business expands again.
   • Ensured all users and systems remained covered by appropriate licenses. For instance, a handful of new Office 365 subscriptions were purchased for specific new hires using a pay-as-you-go model (allowing the company to add or cancel these monthly). This targeted purchasing ensured the company only paid for the cloud services it used.
   • Established ongoing compliance checkpoints – essentially, internal mini-audits every 6–12 months – to verify that without an EA, the company stays in full compliance as it adds or removes software. This proactive monitoring would catch any licensing needs early and prevent compliance issues.

Results

• Avoided Unnecessary Expenditure: By choosing not to renew the Enterprise Agreement, the mining company avoided an estimated $4 million in costs over three years. This was roughly a 45% reduction in Microsoft licensing expenses compared to if they had renewed on Microsoft’s terms. Those savings were immediately reallocated to other critical business areas, such as upgrading network infrastructure at the mining sites and funding new digital initiatives, rather than being tied up in excess software licenses.
• Rightsizing of Licenses: The internal audit uncovered a significant over-allocation of licenses. Over 1,000 unused Office 365 accounts and dozens of server licenses were identified and either eliminated or reassigned. After cleanup, nearly 100% of the company’s purchased Microsoft licenses are now in active use. This rightsizing means the company’s software investment is fully utilized, with virtually no idle shelfware.
• Maintained Full Compliance: The company remains fully compliant with Microsoft’s licensing requirements even without a new EA. Every active user and server workload is properly licensed through existing perpetual licenses or through new subscriptions where necessary. Redress Compliance ensured there were no gaps when the EA ended, and the company did not fall out of compliance at any point. This was achieved by careful reallocation of licenses and addressing any shortfalls with targeted purchases ahead of time.
• Improved Licensing Agility: Freed from the rigid structure of a three-year EA, the company gained greater flexibility in managing software. It can now scale its Microsoft licenses up or down as needed without waiting for a contract renewal window. For example, suppose a mine is closed or sold. In that case, the associated licenses can simply go unused or be reassigned elsewhere without penalty, instead of being paid for until an EA renewal. Conversely, if new projects require additional Microsoft software, the company can buy what it needs at that time. This agility helps ensure that IT costs closely track actual business activity.
• Data-Driven IT Management: The process instilled a more disciplined, data-driven approach to software asset management within the company. The mining firm’s leadership now has detailed insight into its software usage and needs. Any future decision, considering a new Enterprise Agreement down the line or continuing with the current pay-as-you-go approach, will be made with a solid foundation of data rather than assumptions. This case also raised awareness across the organization about the importance of regularly auditing software use, which will have long-term benefits beyond just Microsoft licensing.

Quote from the CFO:

“Redress Compliance gave us the clarity and confidence we needed. Their thorough audit showed that renewing our Microsoft EA would have been like throwing away money on licenses we weren’t using. By avoiding the renewal, we saved millions and can invest those funds into modernizing our operations. Most importantly, we’re still fully licensed and compliant. The decision not to renew wasn’t about cutting corners — it was about smart, informed management of our software assets, and Redress’s guidance made all the difference.”

Key Results

• Cost Savings: ~$4 million in projected savings over three years by not renewing the EA (about a 45% reduction in Microsoft licensing costs for that period).
• License Utilization: Over 1,000 unused user licenses and many redundant server licenses were eliminated, ensuring that nearly 100% of purchased licenses are now actively used in the business.
• Compliance Secured: 100% compliance maintained post-EA, with all users and systems properly licensed through existing entitlements or new on-demand subscriptions.
• Operational Flexibility: Gained the ability to scale Microsoft software use up or down as needed without a fixed contract, aligning licensing costs directly with actual operational needs.

This case demonstrates Redress Compliance’s expertise in license optimization and strategic advisory. By conducting a detailed internal audit and challenging the status quo, Redress empowered a major mining company to avoid unnecessary spending while staying fully compliant.

It highlights how a careful review of software usage can reveal opportunities to avoid costly contracts and adopt a more flexible, efficient approach to licensing.