Optimizing During the EA Term: Don’t Wait for Renewal
Introduction: Why EA Ongoing Optimization Matters
Many organizations sign a multi-year Microsoft Enterprise Agreement (EA) and then sit back until renewal time. It’s a common mindset: wait until the contract expires and then scramble to find savings or negotiate better terms.
However, this “wait until renewal” approach leaves money on the table.
By actively optimizing your EA throughout its term, you can save significant costs now and strengthen your bargaining position in the future. Read our ultimate guide to Post-Signature EA Management & True-Up Governance (Maximizing Value After Signing).
Mid-term optimization is proactive and practical. Instead of letting usage and costs drift upward unchecked for three years, savvy CIOs and procurement leaders treat the EA as something to manage continuously.
Optimizing during the term means trimming excess usage, reallocating licenses, and staying ahead of Microsoft’s pricing changes. The result is immediate cost savings and a lower baseline when renewal does arrive.
In short, ongoing EA management builds leverage for your next negotiation and helps you avoid unpleasant surprises.
To illustrate the key areas for mid-term optimization, the table below summarizes focus areas, the levers you can pull, and their potential impact:
| Optimization Area | Levers to Pull | Potential Impact |
|---|---|---|
| Cloud Usage Optimization | – Right-size Azure VMs and storage – Remove unused resources – Use reserved instances or savings plans for steady workloads | Lower monthly cloud spend; eliminates waste. Reduces your consumption baseline, giving you a stronger negotiating position at renewal. |
| License Re-Harvesting | – Reclaim licenses from departed staff or closed projects – Reassign underutilized licenses before buying new – Audit regularly for “shelfware” (unused licenses) | Avoids unnecessary license purchases. Ensures existing investments are fully utilized, controlling license count growth and reducing shelfware. |
| Staying Informed on Changes | – Monitor Microsoft announcements and roadmap – Track pricing changes or new bundle offers – Review licensing policy updates quarterly | No surprises from Microsoft. Adjust deployments or purchases mid-term to capitalize on new offers or mitigate upcoming price increases. |
| Documenting Cost Savings | – Log all optimization actions and savings – Report savings to leadership quarterly – Analyze trends to find further optimization areas | Provides hard data to justify IT efforts. Builds internal credibility and a case for better terms at renewal by showing proactive cost management. |
| Mid-Term Negotiation | – Identify triggers (M&A, downsizing, etc.) for renegotiation – Engage Microsoft about contract amendments when needed – Leverage changes in scope to adjust spend or terms mid-term | Can yield immediate contract adjustments or relief instead of waiting. Keeps the EA aligned with current business needs and builds goodwill before renewal talks. |
Now, let’s dive deeper into each of these areas and explore how to take action during your EA term rather than deferring all efforts to the last minute.
Cloud Usage Optimization Under EA
Cloud costs can be one of the biggest line items in your EA, especially with Azure consumption. Waiting until renewal to address ballooning Azure bills is too late – you should be optimizing cloud usage continuously throughout the term. Microsoft’s cloud services are flexible, letting you scale resources up or down at any time.
Optimize Azure resources: Review your Azure workloads and right-size them to actual demand. Select suitable VM sizes, eliminate over-provisioned capacity, and shut down resources that don’t require continuous operation. Likewise, optimize storage by deleting orphaned data and moving infrequently used information to cheaper storage tiers.
Leverage cost-saving options: For predictable workloads, use reserved instances or savings plans – they offer significant discounts in exchange for committing to a resource for one to three years. Also, regularly monitor your cloud spend using Azure’s cost tools. Spotting unusual spikes early allows you to take action (for example, shutting down rogue resources or optimizing inefficient workloads) before costs compound over time.
Lowering your Azure consumption via these efforts directly strengthens your hand at renewal. A leaner cloud footprint means Microsoft can’t base your next EA on inflated usage. You’ll enter renewal talks with a lower baseline and proof of good governance. Demonstrating that you’ve eliminated waste also makes it easier to push back on price hikes and demand better discounts on the resources you truly need.
Cloud Usage Optimization Checklist:
- Is Azure usage reviewed and right-sized at least quarterly?
- Have all unused cloud resources (VMs, storage, etc.) been identified and decommissioned?
- Are reserved instances or similar savings programs used for steady workloads?
Read our EA governance guide, Microsoft EA Governance: Managing Your Agreement Post-Negotiation.
License Re-Harvesting and Reassignment
A major way to optimize mid-term is to reclaim and reuse licenses that aren’t being used. It’s common to over-purchase licenses or leave them assigned to employees who no longer need them.
If you wait until renewal to adjust these allocations, you’re paying for shelfware in the meantime. Instead, practice license re-harvesting: whenever a user leaves or a project is retired, promptly reclaim those licenses for reuse.
Reassign before buying new: Make it a policy to check for unused licenses before purchasing additional ones. By reassigning underutilized licenses to new users or projects, you avoid unnecessary costs.
Coordinate with HR so that when employees depart, IT immediately deactivates their accounts and frees up their licenses. Regular audits of active users versus paid licenses will reveal any dormant assignments that can be optimized or removed.
Reduce “shelfware”: Over the course of a multi-year agreement, some licenses will inevitably become unnecessary. Periodically review what you’ve purchased against what’s actually in use. If a product has low adoption, either work to increase its usage or plan to drop it at renewal. The goal is to start the next term without a pile of unused entitlements. Every license harvested now is one less license you’ll need to buy later.
License Re-Harvesting Checklist:
- Do you have a formal policy for reclaiming licenses when employees leave or roles change?
- Are unused licenses identified through regular usage audits?
- Do you check for available spare licenses before buying new software or subscriptions?
Staying Informed on Microsoft Licensing Changes
Microsoft’s licensing landscape is constantly evolving, so your strategy should too. Throughout the EA term, Microsoft may introduce new bundles, adjust pricing, or change policies.
If these changes at renewal catch you off guard, you could end up paying more or missing better options. The key is to stay informed throughout the term so you can adapt rather than react at the last minute.
Track pricing and policy updates: Make it a habit to review Microsoft’s licensing news at least quarterly. For example, Microsoft announced it will eliminate volume-based discounts for online services in late 2025.
Knowing this in advance allows you to plan accordingly – you may adjust your cloud usage or budget now, or negotiate to lock in certain rates before the change. Likewise, if a price increase for a product like Office 365 is on the horizon, you can take steps in the meantime to mitigate the impact.
Watch for new offerings: Staying informed isn’t just about avoiding bad news; it’s also about seizing opportunities. Microsoft often introduces new product bundles or licensing programs that can save you money.
Mid-term, you might discover a new bundle that replaces separate products you’re paying for at a lower total cost. If you learn about such an offer when it launches, you don’t have to wait until renewal to benefit – discuss with Microsoft how you might adopt it under your current agreement.
Assign someone (or an external advisor) to keep tabs on Microsoft’s roadmap and announcements. Have regular check-ins to review any licensing news and decide if a mid-term course correction is needed.
This proactive approach ensures you’re never blindsided and that you always capitalize on the best available options while avoiding looming cost increases.
Licensing Changes Awareness Checklist:
- Do you review Microsoft licensing announcements at least once per quarter?
- Are upcoming Microsoft pricing or policy changes tracked and evaluated for their impact on your organization?
- Is someone on your team (or a partner) responsible for monitoring licensing updates and recommending adjustments?
Read how to manage true-ups, handling Microsoft EA Audits and True-Downs.
Documenting EA Cost Savings During the Term
Optimizing is not enough – you also need to document your wins. Tracking the cost savings you achieve during the EA term is critical because when renewal comes, you’ll want hard data to prove the value you squeezed out of the current agreement.
Showing these savings to executives regularly also builds confidence that IT and procurement are actively managing the investment.
Keep a savings log:
Maintain a running log of all optimization actions and their results. Each time you right-size a service, eliminate an unused license, or negotiate a cost reduction, record what you did and how much money it saved (or costs avoided). Over time, this log becomes a narrative of cost control. You might find that mid-term optimizations saved 15% of your EA costs by year two.
Share and analyze the data:
Don’t bury the savings log. Share key highlights with leadership on a regular cadence (for example, quarterly). “We saved $250,000 this quarter by optimizing Azure and re-harvesting licenses.” – A statement like that will grab a CFO’s attention and demonstrate fiscal responsibility. Also, analyze the log for trends. If most savings come from cloud optimizations and less from license reassignments, that insight tells you where to focus next.
Documenting savings also strengthens your negotiating position. You can enter renewal talks armed with concrete numbers: “We reduced our usage by X and saved Y dollars during this term.” That signals to Microsoft that you’re a savvy customer who won’t overpay for unused capacity. Internally, having proof of cost avoidance helps justify your strategy for the next EA – whether that’s committing to a lower volume or pushing for better pricing.
Cost Savings Documentation Checklist:
- Do you maintain an up-to-date log of all cost-saving actions taken during the EA term?
- Are these documented savings regularly reviewed with finance and executive leadership?
- Can you quantify the total savings achieved so far and use that data to inform your renewal strategy?
Mid-Term Vendor Negotiation Opportunities
An EA is a binding contract, but you don’t always have to wait until it ends to make changes. In certain cases, you can renegotiate or amend your agreement mid-term.
Major business shifts such as mergers, divestitures, rapid growth, or downsizing can dramatically alter your needs. Rather than suffering a misaligned contract for years, engage Microsoft when these events occur to adjust the terms.
Don’t assume it’s set in stone:
Microsoft is often willing to consider mid-term adjustments if there’s a good business case. For example, if your company acquires another firm and doubles its headcount, you could negotiate an amendment to fold those new users into your EA (ideally with volume pricing). If you experience a significant reduction in staff or budget, you can request a reduction in your commitment or restructuring of payments from Microsoft. They aren’t obligated to agree, but they might prefer to compromise rather than risk losing your business.
Use change as leverage:
If you’re bringing more business to Microsoft in the mid-term (say, by moving new workloads to Azure), ask for something in return – perhaps extra discounts or credits when revisiting the deal. If you need to cut back, consider negotiating an extension of the term with lower spend, or swapping some licenses for alternatives that better fit your new reality. The key is to communicate openly with your Microsoft account team about these triggers. They may have programs or contract tweaks (via an addendum) to help realign the EA with your situation.
Stay proactive and don’t just endure a bad fit. Continuously evaluate your EA against current conditions – if there’s a serious mismatch, raise it internally and with Microsoft. Mid-term negotiations might not yield everything you want. Still, even small adjustments can save money and demonstrate to Microsoft that you expect value throughout the term, not just at renewal.
Mid-Term Negotiation Checklist:
- Have you identified scenarios (e.g., M&A, layoffs, strategic shifts) where you would consider seeking a mid-term EA contract amendment?
- When organizational changes occur, do you engage your Microsoft rep or partner to discuss possible contract adjustments?
- Do you compare actual usage to your EA commitments to spot major discrepancies that could justify a mid-term renegotiation?
5 Actionable EA Mid-Term Optimization Tips
To wrap up, here are five actionable tips that encapsulate the mid-term optimization mindset. These can be put into practice right away to start driving value from your EA before the renewal date arrives:
- Audit Azure Monthly: Treat cloud spend like a utility bill — review and optimize it continuously, not just at true-up time.
- Build a License Recycling Program: Implement a standard process for re-harvesting and reassigning unused licenses, ensuring they are reclaimed and reused automatically.
- Watch Microsoft Like a Hawk: Keep a close eye on Microsoft’s licensing announcements; new bundles or price shifts can be turned to your advantage if you act on them promptly.
- Show Your Work: Document every cost-saving move and share the results with executives. Proving the value you’ve delivered strengthens your leverage for the renewal.
- Don’t Fear Amendments: If circumstances change, explore mid-term contract adjustments. You don’t have to endure a misfit agreement until it ends — negotiate when needed.
By taking these proactive steps during the EA term, you won’t be playing catch-up at renewal time. Continuous optimization ensures that you capture savings as they arise and enter your next negotiation on the strongest possible footing.
In short, don’t wait for renewal to make improvements – start optimizing now and reap the rewards both today and at renewal.
Read about our Microsoft EA Negotiation Service.
