Most organisations assume their Microsoft EA renewal is straightforward. In reality, it’s one of the most consistently mishandled commercial events in enterprise IT.
Year after year, organisations sign renewals they haven’t properly prepared for — at prices they haven’t benchmarked, on licence counts they haven’t verified, and with terms they haven’t challenged.
The reason isn’t negligence. It’s timing. By the time the renewal quote arrives, you’re already behind.
Here’s what effective EA renewal preparation really looks like — and why the next 12 months matter more than usual.
Why the EA renewal cycle works against you
Microsoft’s Enterprise Agreement is a three-year commitment with annual True-ups. For many organisations, it’s the single largest software cost on the balance sheet.
In most cases, the renewal process is simple: a quote arrives a few months before the anniversary date, there’s limited negotiation, and the agreement is signed. Discussions rarely start early — unless an upgrade is on the table, such as moving from E3 to E5. Where Copilot is being considered, the conversation tends to start earlier, but the focus is often on the AI capability itself rather than whether the underlying licence estate is in the right shape to support it.
What typically doesn’t happen is a proper review of whether those licence numbers reflect what the organisation actually needs.
The quote is based on historical data. It doesn’t account for:
- Licences assigned to leavers
- Users on higher tiers than required
- Generic accounts that should be reviewed for a lesser licence
- Duplicate or overlapping licences
In short, it’s a starting point presented as a final answer.
The six things to do before your renewal
9–12 months out: Know what you actually have
The most valuable step is understanding your real licence position — based on data, not assumptions.
A proper discovery exercise should map users, devices, licences, and usage. This is where organisations typically uncover idle licences. Typically 5%-15% of the estate is unused.
Without this visibility, unnecessary cost is carried straight into the next three-year agreement.
6–9 months out: Right-size before you renew
With clarity, you can align licensing to actual usage.
Common opportunities include:
- Moving users from E5 to E3 with targeted add-ons
- Assigning F3 licences where appropriate
- Removing redundant or duplicate licences
Well-executed right-sizing often delivers savings of 10–25% — typically greater than any renewal discount.
These are not theoretical figures. In recent engagements, The SAM Club saved a law firm £160,000 over three years by rethinking a Windows Server renewal following an Azure migration — recovering a further £29,000 through the secondhand licence market in the process. For Burges Salmon, an independent review ahead of their June 2025 EA renewal identified that the EA itself was no longer the best option — moving to CSP with three-year SKUs delivered a 17.4% reduction in annual costs, saving over £200,000.
6 months out: Go to market
Staying with your existing reseller is easy — but not always cost-effective.
With an EA, the pricing is set by Microsoft. It is worth considering the CSP where 3 year price options are now available for some of the SKUs. Pricing can vary significantly and it is worth obtaining competitive quotes from multiple resellers.
Even if you remain with your current provider, competitive pressure reduces costs.
In a recent True-up engagement, a client was initially quoted savings of just over £7,000 from moving 431 M365 E5 licences to CSP. By challenging the reseller, The SAM Club secured nearly £17,000 in annual savings — with the option to extend that pricing beyond the July 2026 increase when the remaining EA licences expire in 2028.
6 months out: Review your Azure position
Azure spend is one of the most consistently over-looked areas at EA renewal — partly because it sits outside the traditional licence conversation, and partly because the savings opportunities require active analysis rather than a simple licence count.
The main areas to review before renewal are:
- Azure Hybrid Benefit — allows organisations with existing Windows Server and SQL Server licences to run workloads in Azure at a significantly reduced rate. It is one of the most valuable benefits available and one of the most commonly left unclaimed.
- Reserved Instances and Savings Plans — committing to one or three year terms on Azure compute can reduce costs by up to 60% compared to pay-as-you-go. Most organisations running workloads in Azure for any length of time should have some level of reservation in place.
- Post-migration inefficiencies — workloads migrated to Azure are often sized for the migration rather than for ongoing use. Right-sizing VMs, removing unused resources, and reviewing storage tiers typically unlocks 15–30% in additional savings.
- Licence portability — understanding which on-premises licences can be leveraged in Azure, and which cannot, has a direct bearing on what you need to buy at renewal.
A structured Azure review ahead of renewal typically identifies savings that dwarf the discount available from negotiating the licence price alone.
3 months out: Audit readiness check
Before renewal, confirm you can demonstrate licence compliance. This is not just about avoiding a formal audit — it is about entering the renewal conversation with a clean, defensible position.
Microsoft monitors tenant-level usage data continuously. Certain features, particularly within the Defender and Purview suites, are enabled at the tenant level and apply across all users once switched on — regardless of how many individual licences have been assigned. Without a deliberate review of which features are active and who is benefiting from them, compliance exposure can build unnoticed and surface at exactly the wrong moment.
At three months out, the specific checks to run are:
- Licence assignment vs actual headcount — confirm that all assigned licences map to active, current employees. Leavers, contractors whose engagements have ended, and generic or shared accounts that are no longer needed are the most common sources of over-assignment.
- Tenant-level service scope — review which security and compliance features are enabled at the tenant level and confirm that all users benefiting from those features hold the appropriate licence tier. This is a particular issue for organisations with a mixed E3/E5 estate.
- True-up accuracy — cross-check the licence counts you intend to report against your actual usage data. The numbers you submit at True-up become the baseline for the next agreement.
- Software Assurance entitlements — confirm which SA benefits you are entitled to and whether any are being used. Unused SA benefits represent cost without value and are worth factoring into the renewal decision.
Three months is enough time to close gaps before renewal if you find them now. At three weeks, it is not.
At renewal: Understand what you’re signing
Contract terms around True-up, pricing, and Software Assurance have real financial impact.
Microsoft has confirmed price increases effective July 2026. Organisations should assess whether longer price lock terms protect against future increases.
This is one of the few opportunities to avoid a structural cost increase across your estate.
The True-up: A commonly missed opportunity
True-ups are often treated as an administrative task — something to be handled quickly and filed away. In practice they are one of the most financially significant moments in your EA cycle, and one of the least well-managed.
At each anniversary, you are required to report on any increases in licence usage since the previous year. Under-reporting creates compliance exposure — Microsoft monitors tenant-level usage data and discrepancies between reported and actual usage can surface at renewal or audit. Over-reporting, which is more common than most organisations realise, means you are paying for licences you do not need and locking that cost into the agreement for another year.
The True-up is also the point at which licence tier mismatches become expensive. If users have been assigned E5 licences but are only using E3-level functionality, that cost is confirmed and carried forward unless someone actively challenges it beforehand.
Done well, the True-up process should involve:
- A reconciliation of current licence assignments against actual usage data
- A check for leavers, role changes, and redundant accounts since the last True-up
- A review of any tenant-level services that may be creating unlicensed usage
- Confirmation that the licences being reported accurately reflect what the organisation needs going forward — not just what it has today
The difference between a reactive True-up and a prepared one is often tens of thousands of pounds.
What the July 2026 price increase means
Price increases across Microsoft 365 and Office 365 will take effect from 1st July 2026.
For organisations renewing before this date, the focus is on locking in pricing. For those renewing after, it’s critical to ensure licence counts are fully optimised before committing to higher costs.
EA Renewal Readiness Checklist
Before your next EA renewal, make sure you can answer yes to each of these:
- We have an accurate inventory of all Microsoft licences
- We remove licences when employees leave
- We have reviewed licence tiers against usage
- We have obtained competitive reseller quotes
- We have optimised our Azure spend
- We can demonstrate compliance today
- We understand our pricing and True-up terms
- We have planned for the July 2026 price increase
An EA renewal handled well is one of the most significant cost optimisation opportunities available to an enterprise IT function. Handled poorly — or not handled at all — it’s three more years of paying for what you’ve always had, at prices that only go one direction.
Recent results from The SAM Club
- £200,000 saved for Burges Salmon through a structured move from EA to CSP ahead of their June 2025 renewal — a 17.4% reduction in annual licensing costs
- £160,000 saved for a law firm by rethinking a Windows Server renewal post-Azure migration, recovering a further £29,000 through the secondhand licence market
- £17,000 per year secured for a client through a challenged True-up reseller quote, with pricing protected beyond the July 2026 price increase
The SAM Club
Independent software asset management consultants since 2014. We don’t sell licences — we ensure what you buy is right for your organisation, at the right price, on the right terms.
Get in touch at thesamclub.co.uk