Microsoft EA Renewal Expert Tips from an insider

Microsoft EA Renewal Tips

  • Understand your environment: Assess current and future needs.
  • Deployment assessment: Validate data points and license metrics.
  • Involve stakeholders: Ensure early and complete visibility.
  • Use third-party experts For IT procurement and SAM improvements.
  • Document agreements: Include all terms in writing.
  • Review fine print: Consider a legal review.
  • Maintain confidentiality: Avoid sharing too much information.
  • Evaluate discounts: Compare offers carefully.

Microsoft EA Renewals and Licensing Agreements

Licensing Assessment for Microsoft EA Renewal

Microsoft offers various licensing agreements to cater to different business needs. The most common are the Microsoft Enterprise Agreement (EA) and the Microsoft Enterprise Subscription Agreement (ESA/EAS).

However, these agreements might not be ideal for all businesses, especially small and medium-sized businesses (SMBs). Other options, such as Open-Value, Cloud Solution Provider (CSP), and Microsoft Products and Services Agreement (MPSA), may be more suitable for SMBs.

Types of Microsoft Licensing Agreements

Before optimizing your Microsoft EA renewal, it’s helpful to understand the various agreements available:

Microsoft Enterprise Agreement (EA)

The Microsoft Enterprise Agreement (EA) is a licensing framework for large organizations offering significant discounts. However, this comes with some restrictions:

  • Commitment: Your organization must purchase specific licenses for all qualified devices and users.
  • Software Assurance (SA): All rights must include SA support, meaning you must buy certain licenses and support for the entire organization, regardless of necessity.
  • Payments: Annual payments and additional license purchases are managed through True-Up. If necessary, purchases can also be made during the agreement term.

Types of Enterprise Enrollments under EA:

  1. Enterprise Enrollment: Common type, covers client-based product licensing.
  2. Enterprise Subscription Enrollment: Subscription-based version, also known as the Microsoft Enterprise Subscription Agreement.
  3. Server Cloud Enrollment: Covers server-based products, available in perpetual and subscription options.

Key Differences Between EA and ESA:

  • Subscription-Based Licenses: All licenses under ESA are subscription-based, even if the product’s default license model is perpetual.
  • Flexibility: ESA allows more flexibility in reducing licenses annually through “True-down.” However, EA may be more cost-effective in the long run.

Microsoft Products and Services Agreement (MPSA)

The Microsoft Products and Services Agreement (MPSA) is for transactional agreements with companies having more than 250 users. It allows organizations to make ad-hoc purchases of licenses without SA, offering flexibility outside the Enterprise Pool. For large organizations, the higher discounts available through an EA may outweigh the benefits of MPSA.

Open and Open Value Agreements

Open and Open Value agreements are designed for small organizations:

  • Transactional: Like MPSA.
  • Committed: Like EA, with higher discount options.
  • Payment Options: Upfront payments or spreading payments over time with a commitment.

Cloud Solution Provider (CSP)

Cloud Solution Provider (CSP) agreements provide an alternative channel for purchasing Microsoft Online Services and other products on a subscription basis. Key features include:

  • Monthly Payments: Rather than annual payments.
  • License Adjustments: Monthly adjustments through “True-up” and “True-down.”
  • Support: Provided through a partner rather than Microsoft.

CSP agreements offer high flexibility in payment and license purchasing, making them suitable for SMBs, though volume discounts through an EA may be more viable for larger organizations.

Preparing for Your Microsoft Enterprise Agreement (EA) Renewal

Microsoft EA Negotiation

While these recommendations primarily focus on EA and Enterprise Subscription Agreement (EAS) renewals, they also apply to other agreement types.

Understanding Your Environment

Understanding your current environment, future projections, and overall business strategy is essential. This will help you have productive discussions with Microsoft and make informed decisions about your license renewal.

Microsoft Deployment Assessment

Conducting a deployment assessment of your current environment is crucial. This involves:

  • Investing in Resources: Understand Microsoft Licensing metrics, your current contract, and the Microsoft Product Terms.
  • Creating an Initial Effective License Position (ELP): Use this as a baseline for planning and negotiations with Microsoft.

Perform this assessment well in advance. If you lack a mature software asset management (SAM) program, your ELP figures may be higher than expected, requiring additional actions to align costs with your budget.

MS EA Renewal Considerations

When optimizing your Microsoft EA renewal, consider the following factors:

  • Ring-Fencing Windows Servers: Minimize the need for data center licenses within clusters.
  • Removing Unused Software: Eliminate unnecessary licenses by removing unused software.
  • Evaluating Software Editions: Determine if lower editions of software could suffice. For example, could developers use Visual Studio Professional instead of Enterprise?
  • Dedicated SQL Server Clusters: Consider implementing dedicated clusters.
  • Analyzing SQL Server Instances: Determine necessary licenses for each instance.
  • Avoiding Over-Reliance on SAM Tools: SAM tools may not provide an optimized view of license requirements.
  • Evaluating Software Assurance (SA): Assess the necessity of SA for all licenses, especially for legacy servers.
  • Supplementing with MPSA: Consider combining your EA with a Microsoft Products and Services Agreement.
  • Accounting for Migrations: Ensure you have the necessary licenses for ongoing migrations.
  • Leveraging BYOL SA Benefits: Utilize benefits like license mobility through SA and the Azure Hybrid Benefit.

The goal is to determine the minimum license requirements for your current estate, which will serve as the foundation for your EA renewal discussions. Minimizing current requirements helps mitigate potential impacts in a “worst-case” scenario.

Understanding Your Future Estate

Consider your plans for the IT estate by asking these questions:

  • Migrating to the Cloud: Estimate workloads to be migrated and leverage SA benefits like Azure Hybrid Benefit.
  • Maintaining Control with Perpetual Licensing: Decide if you want to stay on perpetual licensing.
  • Planned Hardware Refreshes: Account for any upcoming hardware updates.
  • Acquisitions or Divestitures: Assess the impact on licensing needs.
  • Upcoming Projects: Identify projects requiring significant software investment.
  • High-Level Consolidation Plans: All BI tools can be migrated to Tableau.
  • IT Security Mandates: Update all software to supported versions.
  • Targeted Cost Reduction: Achieve specific cost reduction goals through your EA renewal.

Modeling Future License Requirements

While it doesn’t have to be perfect, modeling license requirements for the future estate can provide valuable insights, including:

  • Cost Estimations
  • Commercial Levers
  • Areas for License Optimization

Understanding your goals helps minimize unnecessary spending. Avoid negotiating agreements for short-term benefits that lead to long-term issues or overly aggressive migration plans that don’t materialize, resulting in significant cost increases over time.

Finalizing Negotiations

Tips for Negotiating Microsoft EA Renewal

Avoid getting swept up in the excitement of negotiations. Always conduct thorough due diligence throughout the process. Here are some common mistakes to avoid:

  • Not understanding your current environment and future goals
  • Neglecting to identify commercial levers
  • Failing to consider the long-term implications of the agreement
  • Skipping proper due diligence

Licensing

Be meticulous when conducting a deployment assessment. Here are key points to consider:

  • Inventory Visibility: Don’t assume you have complete visibility. Validate data points against your CMDB, Active Directory, and antivirus software.
  • License Metrics: Fully understand how to apply for CPU licenses in a virtual environment and the minimums for Core licenses.
  • SAM Tools: Use SAM tools as a guide. Double-check findings as they may not provide optimized figures.
  • Tool Limitations: Some tools may have issues with certain products, such as SQL Server editions and Core counts. Consider potential RDS requirements as well.

Preparation for Negotiations

Ensure all relevant business stakeholders are involved early and have complete visibility of the renewal process. Consider these steps:

  • Involve Stakeholders Early: Ensure they have complete visibility of the renewal process.
  • Bring in Third-Party Experts: Support negotiations with technology licensing, IT procurement expertise, or SAM process improvements.
  • Moderate Timeline Estimates: Avoid wasted spending by setting realistic project timelines.
  • Consider Long-Term Implications: Plan for the future, not just the present.
  • Identify Commercial Levers: Be proactive in finding opportunities to negotiate better terms.
  • Conduct Due Diligence: Avoid costly mistakes by thoroughly examining every detail.

Tips for Negotiating Your Microsoft EA Renewal

  1. Document Agreements:
    • Make sure all important terms are in writing.
    • Avoid relying on verbal statements; they are not legally binding.
    • Include all agreed-upon terms in the contract to avoid future conflicts.
  2. Review the Fine Print:
    • Thoroughly review all clauses, even if you feel confident about the agreement.
    • Consider getting a legal review to ensure everything is as agreed upon.
  3. Maintain Confidentiality:
    • Be cautious about sharing too much information with Microsoft.
    • Avoid sharing deployment data to maintain your negotiating position.
  4. Evaluate Discounts:
    • Compare and evaluate the discounts being offered.
    • Microsoft’s “best offer” may not always be the most competitive.
    • Agreeing to a lower value may set a precedent for future deals.

Conclusion

Following these guidelines and conducting thorough due diligence can ensure a more successful and favorable outcome in your Microsoft EA renewal negotiations.

Engaging all stakeholders early, leveraging third-party expertise, and carefully reviewing all terms will help you avoid common pitfalls and secure the best possible terms for your organization.

Author

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  • Fredrik Filipsson

    Fredrik Filipsson is an Oracle licensing expert with over 20 years of experience in Oracle license management. He spent 10 years working for Oracle corporation and then 10 years at a consultant leading engagements on Oracle license assessments, audits, ULAs. He is a public speaker and author

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