FAQs on Microsoft EA Negotiations
Introduction: Why FAQs Matter
Microsoft Enterprise Agreement (EA) negotiations come with recurring questions and doubts. Busy decision-makers want clear information quickly, without having to wade through jargon.
This FAQ provides direct, practical answers to tough Microsoft EA negotiation questions, focusing on what you need to know to make informed decisions.
Read our overview of Microsoft EA Negotiation Best Practices & Common Pitfalls.
Can we negotiate a Microsoft EA on our own, or do we need a consultant?
Yes, you can negotiate a Microsoft EA in-house if you have a skilled team (IT, procurement, and legal) experienced in Microsoft licensing. Many organizations manage EA negotiations internally by leveraging their own expertise and relationships.
However, if your deal is very large, global, or if you lack up-to-date benchmark data, bringing in a specialized licensing consultant can be a smart move.
Consultants have insight into Microsoft’s pricing tactics and can leverage benchmarks from other clients to improve your deal.
Pro Tip: A consultant brings external benchmarks and negotiation experience that can tip the scales in your favor, especially for complex or high-value EAs.
What if Microsoft denies all our requests?
If Microsoft initially says “no” to many of your requests, it usually means you’ve bumped into their standard policy limits or discount thresholds. Don’t take the first refusal as final – often it’s a sign to ask more questions.
Request a clear, written explanation for each “no” and see if you can find creative alternatives or trade-offs that address Microsoft’s concerns. If necessary, escalate the discussion to a higher-level Microsoft manager or wait for a strategic moment (like end-of-quarter) when Microsoft might be more flexible.
Consider these steps when you encounter firm pushback:
- Request a written rationale behind each denial to determine if it’s a policy or just an initial stance.
- Propose creative give-and-take solutions (e.g., commit to an additional product or longer term in exchange for a concession you need).
- Escalate the issue diplomatically to Microsoft’s senior sales management if you truly need an exception or better terms.
- Leverage timing – Microsoft may have more leeway near end-of-quarter or fiscal year when they’re eager to close deals.
Watch Out: Don’t accept “policy says no” as the final answer. “Policy” is often just a starting point – a professional but persistent challenge can lead to exceptions.
How do we handle negotiations with Microsoft’s resellers and partners?
Microsoft’s Licensing Solution Provider (LSP or reseller) handles the paperwork and administrative details of your EA, but Microsoft itself controls the core pricing and terms. Treat the reseller as an ally for processing quotes and managing logistics, but ensure they’re advocating for your interests, not just echoing Microsoft’s position.
Be clear with your partner about your expectations for discounts and terms. For any major concessions or non-standard terms, expect to engage directly with your Microsoft account reps – the reseller facilitates communication. Still, Microsoft makes the final decisions on big-ticket items.
Pro Tip: Utilize your reseller for administrative support and basic negotiations, while maintaining direct communication with Microsoft for critical pricing and terms. This way, nothing is lost in translation, and Microsoft sees that you’re hands-on with the deal.
Debunking myths, Microsoft EA Negotiation Myths Debunked.
Is it better to sign a shorter EA (3-year vs 5-year)?
The standard Microsoft EA runs for 3 years, which is usually the safest choice. Microsoft may occasionally offer a longer 5-year EA (or a 3+2 year extension), promising price stability, but this ties you down – it provides predictability at the cost of flexibility.
With a 5-year lock, you could miss out on new licensing programs or better deals if your needs or the market change mid-term.
For most organizations, sticking with a 3-year EA is better; you can always negotiate renewal options or price caps to get some long-term price protection without committing to a full 5-year term upfront.
Here’s a quick comparison between a 3-year and a 5-year EA:
| Aspect | 3-Year EA (Standard) | 5-Year EA (Extended Commitment) |
|---|---|---|
| Term Length | 3 years (typical duration). | 5 years (long commitment). |
| Flexibility | More flexibility – you can adjust at the 3-year mark if business needs change. | Less flexibility – locked in longer, hard to adjust if needs or technology change. |
| Pricing Stability | Prices fixed for 3 years. Afterwards, you renegotiate (could be higher or lower). | Prices fixed for 5 years, protecting against increases during that period. |
| Predictability | Predictable costs for 3 years, plus chance to adapt or renegotiate sooner. | High cost predictability for 5 years, but you’re betting your needs won’t drastically change. |
| When to Choose | Default choice for most – best if you expect changes in user count, budget, or tech strategy. | Only for special cases – if you need a long-term lock and are confident your requirements will stay steady. |
Pro Tip: Stick to a 3-year EA in most cases. If Microsoft dangles a 5-year deal, remember that any special discounts or concessions typically only apply to the first 3 years. It’s usually smarter to negotiate price protections in a 3-year contract (like caps on renewal increases) rather than locking in a full 5-year term upfront.
What happens if we don’t renew our EA?
If you don’t renew your Microsoft EA at the end of the term, your licensing arrangements will change significantly. For subscription-based licenses (such as Microsoft 365 or Azure services), these subscriptions will expire or revert to standard pricing once the EA agreement lapses.
For any perpetual licenses you bought under the EA with Software Assurance, you keep the base licenses (they’re yours to use forever).
Still, you lose the Software Assurance benefits when the term ends (no more upgrades, support, or training credits). Additionally, any special EA discounts or benefits (such as spread payments, true-up rights, or free credits) will end.
Bottom line: if you let your EA lapse, you need another plan for licensing going forward:
- You may transition to a CSP (Cloud Solution Provider) program, which lets you continue subscriptions on a flexible monthly/annual basis through a Microsoft partner.
- For Azure services, you might sign a Microsoft Customer Agreement (MCA) to keep using Azure under a new contract (often pay-as-you-go or with agreed discounts).
- You could use other volume licensing programs (like Open Value, MPSA) or even one-time purchases, depending on what fits your needs after the EA.
- The key is to plan this before your EA expires, so there’s no interruption or compliance risk once your current agreement ends.
Watch Out: Failing to renew an EA without a replacement plan can disrupt your operations. You could lose access to critical software or face higher costs if you haven’t arranged new licenses or subscriptions in time. Always have a transition strategy well ahead of your EA end date.
Closing Note: Keep Asking the Right Questions
Great negotiators succeed by clarifying doubts early. Microsoft EA negotiations can be complex, but asking questions like the ones above ensures you don’t overlook important details. Remember, this FAQ isn’t just about answers – it’s a prompt to strengthen your negotiation strategy. Keep challenging assumptions, get commitments in writing, and don’t hesitate to push for what your organization needs.
Negotiation Preparation Checklist: Before your next EA negotiation, run through this quick list to set yourself up for success:
- Assemble your team: Include IT, procurement, and legal stakeholders who understand your Microsoft usage and business priorities.
- Define your goals: Know what you want (cost savings, specific contract terms, new products) and identify “must-haves” vs. “nice-to-haves.”
- Do your homework: Gather data on your current licenses, usage, and any changes (growth, new projects) that will affect demand. Research Microsoft’s latest offers or use consultant benchmarks to inform your requests.
- Plan your concessions: Identify where you have flexibility – for example, consider adding a product or adjusting timelines in exchange for better pricing on a priority item.
- Set escalation points: Decide which issues are critical enough to escalate (both within your company and to Microsoft execs) if you reach an impasse.
- Time it right: Whenever possible, align negotiations with Microsoft’s end-of-quarter or fiscal year – they may be more accommodating when they’re eager to close deals.
- Document everything: Obtain all commitments, special terms, and pricing details in writing (via email or contract drafts) to avoid confusion later.
Read about the common pitfalls, Common Microsoft EA Negotiation Pitfalls (and How to Avoid Them).
By checking these boxes, you’ll enter your Microsoft EA negotiation well-prepared and confident. Keep asking the right questions at every step of the process!
Read about our Microsoft EA Negotiation Service.
