EA Pricing FAQ
Why EA Pricing FAQs Matter
Enterprise Agreements (EAs) for Microsoft software are notoriously complex, especially when it comes to costs. Busy IT and procurement leaders don’t have time for marketing spin—they need straight, practical answers.
This FAQ aims to cut through the jargon and provide clear, no-nonsense guidance on the most common EA pricing questions. Read our comprehensive guide, Microsoft EA Pricing & Discount Strategy: How to Negotiate Costs and Maximize Savings.
Below, we answer fifteen frequently asked questions about Microsoft EA pricing, discounts, true-ups, and recent changes, so you can make informed decisions without wading through sales fluff.
What discount can we expect on a Microsoft EA?
Expect moderate discounts at best. Microsoft’s “standard” EA pricing isn’t deeply discounted by default. Historically, large enterprises (15,000+ seats) got up to around 10–12% off automatically through volume-tier pricing. Now, those automatic cloud discounts are no longer available.
Any meaningful discount will come from negotiation. Many companies negotiate additional discounts in the single to low double-digit percent range, depending on their spend and leverage.
In short, don’t assume the first price Microsoft offers is the best—you often need to push for savings.
How are EA prices affected by Microsoft’s November 2025 changes?
Microsoft’s November 2025 pricing update eliminated volume-based discounts for cloud services in Enterprise Agreements. All customers now pay the same Level A list price for online services, regardless of organization size.
This means that larger enterprises, which previously enjoyed built-in volume discounts (6–12% off), will see those discounts disappear at renewal, effectively raising their costs to standard list prices.
In practical terms, large companies could face price increases of 6–12% (or more) compared to pre-2025 deals. On-premises software pricing was not affected by this change, but anything cloud-based under an EA is now at flat, “no-volume-discount” pricing globally.
Can you negotiate Azure pricing in an EA?
Yes. Azure spend is absolutely negotiable within an EA. Microsoft wants large Azure commitments, so they’re willing to deal. By committing to a certain annual or three-year Azure spend, you can often secure discounts or credits.
For example, suppose you agree to a substantial multi-year Azure consumption commitment (often in the six- or seven-figure range). In that case, Microsoft may offer custom pricing or free Azure credits as an incentive.
You can also negotiate rates for specific Azure services if you have significant usage or if you’re considering competing cloud providers.
The key is to use your projected Azure spend as leverage—bigger commitments usually mean better pricing. Don’t be afraid to ask for a break on Azure prices as part of your EA negotiation.
What happens if we add users mid-term?
Enterprise Agreements are designed to accommodate growth. If you add users or licenses in the middle of your EA term, you won’t pay immediately for each new seat.
Instead, Microsoft uses a True-up process: you deploy the additional licenses as needed, then at your next anniversary, you report the increased user/license count. Microsoft will then bill you for those added licenses, typically at the same per-unit price you initially agreed upon.
In practice, you’re charged a prorated amount for the new licenses covering the time they were in use (some agreements simply charge a full year’s cost at each anniversary for any new license).
The bottom line: you can add users at any time, and you “true up” the cost later. Just make sure to budget for those True-up charges each year so they don’t catch you by surprise.
How do EAs handle currency fluctuations?
One big benefit of an EA is price protection against currency swings. When you sign an EA, your pricing is usually locked in your local currency for the full term (typically 3 years). This means you pay a fixed price per license in, say, euros or pounds, even if exchange rates fluctuate or Microsoft adjusts global price lists.
In other words, the EA insulates you from currency-related price hikes during the contract. Please note, however, that this applies only to the products and quantities specified in your original contract. If you add a new product SKU that wasn’t on your initial price sheet, that new addition might come in at current rates.
But for your committed licenses, you’ve hedged against currency changes—Microsoft bears the exchange rate risk once the agreement is signed.
At renewal time, pricing will be recalibrated to reflect the current rates and market prices; however, your costs will remain stable in the meantime.
How are True-up costs calculated?
True-up costs are calculated based on the additional licenses you’ve added during the year and the agreed unit price in your EA. At each anniversary, you tally any increase in licenses (for example, if you went from 1,000 to 1,100 Office 365 users, you’d true-up 100 extra licenses).
Microsoft will charge you for those 100 added licenses at the per-license rate defined in your agreement. If those licenses were added partway through the year, the charge is often prorated for the portion of the year they were used.
Essentially, it’s a simple calculation: number of new licenses × your EA price × the fraction of the year. True-ups are an annual “catch-up” payment to cover growth. Keep track of your deployments so the True-up bill doesn’t contain any surprises.
What’s included in Software Assurance?
Software Assurance (SA) is Microsoft’s maintenance and benefits program that you typically add to perpetual licenses (and it’s often included by default in EAs). It provides a bundle of valuable extras beyond just the software license.
Key benefits include:
- Upgrade Rights: You can upgrade to new versions of the software released during your SA term at no additional license cost. This keeps you on the latest version without buying new licenses.
- Technical Support: SA often includes access to 24×7 Microsoft support or several support incidents, helping with troubleshooting.
- Training and Deployment Resources: It offers training benefits (like access to Microsoft Learn, sometimes class vouchers in the past) and planning services to help with deployments. (Note: Microsoft has phased out some old voucher programs but still provides guidance resources.)
- Home Use Program: For certain products, such as Office, SA allows employees to use Office at home at a minimal cost.
- License Mobility: You gain the flexibility to move licenses to the cloud or between servers (for example, License Mobility enables the migration of certain server licenses to AWS/Azure VMs).
In short, Software Assurance is meant to maximize the value of your licenses by covering upgrades, support, and other perks. It’s essential to utilize these benefits, as you’re paying for them—many organizations overlook SA perks that could save money elsewhere.
Do smaller companies get the same discounts as large enterprises?
Not usually. Historically, larger enterprises have enjoyed larger automatic discounts in EAs due to volume pricing tiers.
A huge company might have qualified for Level D pricing (with ~12% off the list price on cloud services), whereas a smaller company (just meeting the minimum EA size of 500 users) received no built-in discount (Level A pricing).
Now, following the changes in November 2025, Microsoft has leveled the playing field for online services by offering everyone the same base price. So on paper, a small and a large organization pay the same list price for, say, a Microsoft 365 license.
However, large enterprises still have an edge: they have more leverage to negotiate special discounts or extra incentives. Microsoft is more likely to bend on pricing for a 50,000-seat customer than for a 600-seat customer.
Smaller companies often have to accept the standard pricing or work through a reseller, while larger firms can negotiate additional deals. In summary, the published prices are now the same, but large customers can still negotiate more effectively than small ones.
Read more about cost optimization, Cost Optimization within Your EA: License Right-Sizing.
How do product bundles impact pricing?
Product bundles can significantly improve your cost per product. Microsoft often prices bundles (suites) attractively to encourage broader adoption.
For example, purchasing the Microsoft 365 E5 bundle (which includes Office 365, Windows Enterprise, and EMS security features) can be more cost-effective per component than buying Office 365, Windows, and security licenses separately. By consolidating into a bundle, you usually get a better overall rate.
Additionally, including more products in your EA (such as bundling Dynamics 365 or Power Platform with Office 365) may give you more negotiation leverage—Microsoft may offer bundle discounts or concessions if you adopt more of their product stack. The flip side is to ensure the bundle isn’t loaded with things you don’t need.
While bundles reduce unit costs, you don’t want to pay for a deluxe suite if you only need half of its components. So, bundles can lower pricing, but align them with your actual requirements to truly save money.
Can EA terms be customized, or are they standard?
The EA is a standard contract at its core, but key terms can often be customized to meet your specific needs—especially if you’re a large customer. Microsoft starts with a boilerplate 3-year agreement with fairly fixed rules (annual billing, fixed pricing, True-ups, etc.). Smaller organizations typically sign the standard EA with little alteration.
However, big enterprises or those with strategic importance can negotiate custom provisions or amendments. For example, you might negotiate a price cap (no more than X% increase on renewal), flexible payment schedules, or the ability to reduce certain quantities at mid-term if business conditions change (Microsoft doesn’t usually allow decreases, but huge customers sometimes get exceptions). Some organizations negotiate special terms around merger/acquisition scenarios, or specific language on usage rights.
The product selection and pricing are also areas of negotiation – you may receive bespoke bundles or discounted rates not listed in the standard price list.
In summary, the baseline EA terms are standard, but they’re not take-it-or-leave-it. You can and should negotiate terms that matter to you. Microsoft will bend on terms for significant deals, so use your leverage.
What’s the typical price escalation in an EA?
During the EA’s 3-year term, there usually isn’t any price escalation—your Year 1 per-unit price is locked in for Years 2 and 3 for the products you’ve licensed. (That stability is one reason companies like EAs.) However, at renewal, Microsoft often proposes a price increase.
Typically, we’ve seen “standard” renewal uplifts in the mid-single digits to low teens percentage-wise. For example, Microsoft might increase the price of your Office 365 licenses by 5% or 10% for the next term, citing new features or general price list adjustments.
In today’s climate (especially after the removal of 2025’s discounts), some customers are facing even larger jumps if they had previously received special pricing. The key point: don’t assume your renewal will be flat.
Always plan for Microsoft to push prices up at the end of an EA. You can negotiate this—savvy customers often negotiate renewals to keep increases minimal or even hold pricing flat for certain products. But if you simply roll into a renewal without discussion, a cost escalation is the norm rather than the exception.
Are there hidden costs companies often overlook?
Yes, a few cost factors frequently catch companies off guard in EAs:
- True-up Surprises: If you grow your usage, the annual True-up bill can be significant. Organizations sometimes deploy extra software or add Azure services without tracking them, and then face an unexpectedly large invoice at year-end. Always monitor your license usage throughout the year to avoid surprise costs.
- Unused Licenses (Shelfware): Companies often over-purchase to secure a larger discount or “just in case,” and end up paying for licenses that aren’t actually being used. This waste is essentially a hidden cost. Regularly audit your usage; if you’re in an EA Subscription (which allows dropping at renewal), plan to right-size at the end of the term. If not, avoid overcommitting upfront.
- Support Costs Tied to EA Spend: Microsoft’s Unified Support fees are often calculated as a percentage of your total license spend. As you buy more under an EA, your support contract renewal might jump in cost. This is easy to overlook because it’s indirect—your EA grows, and then a support invoice comes in 20% higher. Keep an eye on how license additions will affect your support fees (or negotiate that separately).
- Feature Creep and Add-ons: Another hidden cost is purchasing add-on licenses or premium features mid-term that weren’t in your original plan. For instance, you might realize you need extra security add-ons (EMS E5, Phone System licenses, etc.). Individually, these can be pricey and add up. It’s “hidden” in the sense that it’s not in the initial EA quote but becomes necessary later. Planning your needs in advance and including them in the main deal (at a negotiated rate) can mitigate this.
Being proactive about these areas—monitoring growth, cleaning up unused licenses, and understanding downstream impacts—will help you avoid budget headaches.
Can you negotiate a lower support or extended support cost?
Often, yes. Microsoft’s support offerings (like Unified Support) are negotiable, especially for enterprise customers. Unified Support is typically priced as a percentage of your MS spend or a tiered fee, and Microsoft sales reps have some flexibility.
You can push back on the initial support quote—many companies successfully negotiate a lower percentage or cap on annual support fee increases.
If Microsoft knows you’re considering third-party support alternatives or that the cost is a deal-breaker, they often come back with a discount or adjusted package. So don’t accept the first number; ask for a better support rate or tailor the support level to what you actually use.
For extended support costs (like Extended Security Updates for legacy products, or other post-end-of-life support), Microsoft tends to have set pricing. These are those extra fees to support Windows or SQL Server past their normal support period, for example.
While the sticker price on these is standard, you can sometimes get them reduced indirectly—say, as part of a larger negotiation (e.g., you agree to a large Windows 11 deployment, and Microsoft offers a break on Windows 7 Extended Security Update costs).
It’s not guaranteed, but everything is worth discussing. In summary, support costs are not as fixed as they appear. You should treat support and extended support as negotiable line items during your EA or renewal talks.
How do renewals affect pricing compared to initial agreements?
Renewals are a pivotal moment for pricing. In many cases, the renewal will come in at a higher cost than your initial EA. There are a few reasons: any special discounts or “first-time” incentives you received might expire, Microsoft’s list prices might have risen over three years, or your own growth in usage could drive costs up.
Essentially, if you just accept the renewal quote, you’ll likely pay more than you did initially for the same set of products. For example, if you received a 15% discount in your first EA, Microsoft might try to scale that back or apply the new, higher global price at renewal.
That said, renewals are also your chance to renegotiate. Microsoft wants to keep your business, especially if you’re evaluating alternatives.
You can often use the renewal to secure a better deal on new bundles or maintain your discounts—but only if you engage proactively. The worst approach is to treat renewal as a rubber stamp.
The best approach is to initiate renewal discussions early, benchmark what others are paying, and be willing to push back or consider switching to a different licensing program.
In summary, initial agreements may be cheaper; however, renewals tend to increase in cost if not managed effectively. Treat a renewal like a new negotiation to keep pricing in check.
What’s the single biggest mistake companies make on EA pricing?
The biggest mistake is simply accepting Microsoft’s pricing or terms without strong negotiation. Too many companies assume the EA is non-negotiable or that Microsoft’s first offer is “standard” and must be accepted. In reality, there’s usually plenty of wiggle room — Microsoft’s reps expect customers to counteroffer.
Failing to negotiate aggressively is a costly error; it can mean paying 10-20% more than necessary for three years. Another related mistake is not doing homework: going into an EA or renewal without a clear internal strategy, usage data, or alternative options. That often leads to a weaker negotiating position and subpar pricing.
But by far, the most common pitfall is complacency—signing on the dotted line too quickly. Always question the initial deal, seek multiple bids or advice, and use your leverage (like considering competing products or licensing models).
In short, treat EA pricing like the significant business investment it is. The effort you put into negotiating and optimizing it will pay off in the form of substantial savings.
Read more about our Microsoft EA Negotiation Service.
