Top 10 Tips for Exiting or Downsizing Your Microsoft EA at Renewal
Introduction – Why EA Renewal Is Now a Leverage Point
Microsoft’s enterprise licensing landscape has undergone significant changes in 2025. The traditional Enterprise Agreement (EA) is no longer the bargain it once was: volume discounts are disappearing, and Microsoft is even pushing many mid-sized customers off the EA model entirely.
In its place, Microsoft is steering organizations toward “simplified” contracts, such as the Microsoft Customer Agreement for Enterprise (MCA-E) and the Cloud Solution Provider (CSP) program.
In this climate, renewing an EA as-is could mean paying more for less flexibility. Instead, renewal time has become a prime opportunity to exit or downsize your Microsoft EA and take back control of costs.
Naturally, Microsoft will claim these new agreements are easier and more flexible. However, savvy CIOs and CFOs recognize that “simplification” often masks higher costs or lost negotiating leverage.
The good news is that at renewal, you have leverage because you can walk away. For a full overview of negotiations, read our Ultimate Guide to Microsoft Contract Negotiations.
With the right preparation, you can reduce spending and avoid common pitfalls associated with renewals.
Below are 10 battle-tested tips to guide your Microsoft EA renewal strategy, whether your goal is to shrink the EA or exit it entirely.
Top 10 Tips for Exiting or Downsizing Your EA
- Start Renewal Planning 12–18 Months – Don’t wait until your EA expiration is looming. Begin planning 12 to 18 months. Early preparation gives you time to evaluate options and prepare stakeholders, which prevents last-minute pressure tactics from Microsoft. By starting a year or more in advance, you can set the pace and map out a successful downsize or exit strategy.
- Model CSP, MCA-E, and Pay-As-You-Go Alternatives Early – Before negotiations, calculate the costs of moving to other licensing models – CSP, MCA-E, or pay-as-you-go subscriptions. This gives you a baseline. If Microsoft’s renewal offer is too high, you can demonstrate that you are aware of the costs of these alternatives. It signals that you’re ready to switch unless the EA terms improve, which is a strong leverage point.
- Segment Business Units and Move Some Off EA – Identify any departments or groups that don’t need to be under the EA. Not every part of your business requires one giant contract – maybe a smaller division could get its licenses via a CSP partner instead. By narrowing the EA to only where it’s needed, you save money and demonstrate to Microsoft that you’re willing to pull parts of the company out, adding pressure on them.
- Audit Your EA for Over-Licensing and Shelfware – Take inventory of your EA licenses and how they’re used. Identify any shelfware – licenses for products or services nobody is using. Plan to cut those out at renewal. Showing Microsoft data on unused licenses undercuts any push to “renew everything.” You’ll trim the fat and only pay for what your team needs, directly reducing EA costs.
- Gather CSP and Third-Party Quotes as Benchmarks – Before engaging Microsoft, get a few quotes from CSP providers or other vendors for equivalent services. Knowing the market rate for products like Microsoft 365 or Azure helps you identify an overpriced renewal and provides alternatives. If you mention you have competitive bids in hand, Microsoft will realize you’re serious about switching – and that can spur a better offer.
- Negotiate Retained Rights If You Exit – If you plan to leave the EA, ensure you secure certain protections. Confirm that any perpetual licenses you acquired through the EA remain yours. Additionally, push for a clause that allows you to rejoin an EA later without penalty. Securing these rights lets you exit on your terms and avoid surprises later.
- Resist “All-In” Renewal Bundles – Microsoft may encourage you to renew everything as a single, comprehensive bundle “for simplicity.” Don’t sign up for more than you need. It’s fine to renew just core services and drop the rest. If Microsoft claims you’ll lose savings by not going all-in, remember those volume discounts are gone anyway. Rejecting a one-size-fits-all bundle keeps you flexible and eliminates costs for unused extras.
- Get Migration Paths and Exit Terms in Writing – If you sign a renewal (even a slimmed-down one), insist on contract language that grants you future exit and migration options. For example, if you plan to move some workloads to a CSP next year, include a clause to reduce those licenses mid-term without penalty. Getting these terms in writing prevents you from being stuck in another inflexible deal.
- Prepare Stakeholders for High-Pressure Tactics – Expect Microsoft to apply high-pressure tactics as renewal nears, including sudden executive calls, “last chance” offers, and even hints of audits. Prepare your team early: brief your executives and budget owners on the downsizing plan and these tactics, so nobody gets spooked into going off course. A united front ensures you won’t be pressured into a bad deal.
- Align the EA Decision with Your IT Roadmap – Fit your EA renewal to your long-term IT plans. If you’re embracing multi-cloud or need maximum agility, opt for a smaller or shorter Microsoft deal. If Microsoft remains central, you can keep an EA but slim it down to core services only. The goal is to shape the deal around your future needs, rather than renewing out of habit. Microsoft will see your stance is driven by strategy – and that gives you leverage.
Learn about the Top 10 Tips to Manage Microsoft EA True-Ups Like a Pro.
Conclusion – Exiting or Downsizing an EA as Strategic Freedom
Exiting or downsizing an EA at renewal is a bold move. Still, it can pay off with big gains in flexibility and savings – it’s your chance to break free from an oversized contract and reshape your Microsoft relationship.
You can turn this renewal into an opportunity to regain control, paying only for what you need and remaining agile as needs change.
In the long run, getting out of an unwieldy EA isn’t just about cutting costs; it means your Microsoft licensing will align with your business goals.
Read about our Microsoft Negotiation Services.
