Microsoft EA renewal allows organizations to continue their digital transformation journey without any interruptions.
Renewing an Enterprise Agreement (EA) is critical for any organization that relies on tight budgets, wants to avoid cloud waste, secures compliance, and controls its negotiation process.
As an organization, you need to plan ahead to ensure you optimize value from your Microsoft contract while minimizing costs and interruptions.
In this post, we will discuss 5 tips you should implement for a successful EA renewal.
1. Preparation Is Key!
A successful EA renewal process begins with good preparation. Typically, organizations should start this review process at least 6-12 months before the contract expiration. This gives you enough time to:
- Engage Internal Stakeholders: Probably the most important step during an EA license renewal process is to first speak and get along with your internal different stakeholders. Licensing is not their favorite topic; their budget is probably 100 times bigger than the license to optimize. Meaning it’s less relevant for them. But they control the technology; they know wherefore, how the business uses it, and what they need to optimize the contract. That means that you need to sell the opportunity to the internal stakeholders.
- Project: Make it an official project, this is important, so you get the right attention and involve all stakeholders within all layers of the organization. Set up monthly review meetings and create a Steerco committee.
- Governance: Microsoft will be selling its products to everyone in the organization. It’s important to set up the right governance so people get the info they need without jumping into buying or committing to a specific technology.
- Governance & Tooling: Start by calculating the costs for all the needs and wants from the Steerco committee. Once you’ve got that, you can figure out your project budget and what resources and tools you’ll need to assess your current software usage. Ask yourself if you can handle a manual check, whether you already have the right tools, and if you need any extra expertise or if you’ve got it covered in-house.
2. Analyze Your Current Estate
Your current estate registered in the EA tool should be analyzed before entering a new Microsoft ea renewal cycle.
You need to perform the following analyses:
- Historical Pricing Analysis: Start your historical pricing analysis by taking a close look at your current Microsoft contract. Check out the pricing structure, note any amendments, review the Customer Price Sheet, and see what’s included. This analysis will better understand the current commercial setup and set the stage for optimizing your software estate.
- License Entitlement Analysis: – After looking over your current Microsoft contract, create a Bill of Materials that lists all your products, licenses, and any amendments that might give you extra license entitlements. This will help you clearly see what you own right now.
- Analyze Your Current Usage: Start by reviewing the Microsoft EA licenses, software, and services your team is currently using. After that, check out which tools are being underutilized and see if your organization’s usage patterns have changed. You can do this analysis with manual exports or by taking advantage of available tools.
3. Define Your Microsoft Roadmap
Enterprise Agreements are typically long-term commitments, often lasting 3 years or more. Therefore, it is crucial to ensure that your future Microsoft plans align with your organization’s technology roadmap and goals.
To review your Microsoft roadmap, do the following:
- Review Your Current Products: Does your organization, with its future plans, still intend to use the technology that is currently under contract? Or are there significant changes on the horizon, such as migration to the cloud, switching security vendors, or altering the workplace strategy from virtual to local environments? These are key decisions that will directly impact your Microsoft Bill of Materials and contract.
- Products On The Roadmap: Are there any Microsoft products planned for future implementation? If so, when do you expect to deploy them? This can make a big difference in your total payment after the 3 years. For instance, if you’reyou plan on buying new types of licenses in the coming 3 years, the best option is to buy one so you can true-up those licenses instead of paying the new list prices without your discussed discounts.
4. List Of Products
Gain a clear understanding of the services and licenses to be included in the contract, commonly referred to in the market as the Bill of Materials (BOM). The most important lesson is to stick to this BOM.
Therefore, ensure that you obtain approval from the relevant and responsible stakeholders within your organization. This is crucial for defining your next and final step: the negotiation strategy.
5. Negotiation Strategy
Negotiating a Microsoft Enterprise Agreement renewal is a valuable opportunity to optimize costs and secure favorable terms. This is achievable with a well-crafted negotiation plan.
When preparing your negotiation strategy, consider the following:
- Determine Your Options: Explore various options to strengthen your position, such as different regions and contract types. Consider not only price but also factors like flexibility, management location and attention, and local vendor relationships. A strategic approach can be more impactful than purely cost considerations.
- BATNA (Best Alternative to a Negotiated Agreement): Develop a strong alternative plan. A viable alternative gives you leverage and sends a powerful message to the vendor that you have other options, strengthening your negotiating position.
- Leverage Usage Data: Present clear data during negotiations to highlight underutilized services or licenses. Microsoft is more likely to adjust pricing and make exceptions if they understand your business needs and usage patterns.
- Competitive Benchmarking: Use data on competitors to your advantage. Leverage this information to request better Microsoft EA pricing, increased flexibility, or additional features.
- Market Insight And Benchmark Data: Understand what is achievable and what similar organizations have achieved. This knowledge helps in setting realistic expectations and negotiating more effectively.
- Incentive Funds: Microsoft is often eager to encourage the adoption of its technology. Develop strong business cases demonstrating that migration or implementation is not cost-effective. Microsoft may offer significant incentive funds to cover implementation and migration costs, like AMMP, ECIF, or credits.
Negotiating a high discount results in appreciation but doesn’t give the best result. Focus on buying what you use and maximizing the value from your investment gives a better outcome”.
-2Data, Chris van der Zwan
Successfully Renew Your EA Licensing!
A Microsoft EA renewal process can be daunting and challenging, but with proper preparation, it can also be a great opportunity to optimize your organization’s investments.
For expert Microsoft enterprise licensing advice, management, and negotiation, look no further than our professionals at 2Data. Our experienced team has helped numerous organizations successfully renew their EA licensing and achieve significant cost savings.
Contact us today!
