What are the pros and cons of Microsoft Enterprise Agreement in 2024? 

Introduction to Microsoft Enterprise Agreement    

Microsoft Enterprise Agreement (EA) is a licensing agreement for large organizations that want to standardize and centrally manage their software and cloud services across their organization. It is designed for large organizations that need to deploy Microsoft software across many devices and users.      

What are the Pros of Microsoft Enterprise Agreement?   

As the decision is to purchase Microsoft licenses to use its software, there should be a prior assessment in your organization to know which needs will be adequately met. We will share with you the pros and cons of Microsoft Enterprise Agreement.   

The Pros of Microsoft Enterprise Agreement 

Microsoft EA and Cost Savings   

This can be a major incentive as to why your organization will settle on the Enterprise Agreement offered by Microsoft. When this option is optimized well and expertly executed, there are discount options that can be well taken advantage of. EA agreements are offered as volume licenses, and this helps to reduce substantially the overall cost of Microsoft software if you know how to trigger the right discussions during negotiation.    

Streamlined Management  

EAs allow organizations to standardize their software and services. This gives your organization a good grip on the bulk license purchase, making it easier to manage licenses like deployment, track usage, monitor and ensure compliance. Your organization is also able to know with time if perpetual or subscription licenses will work best and in which way.    

Microsoft EA has predictable Budgeting   

With an EA, because there is a payment model and a duration either fixed annual or multi-year cost as agreed on with Microsoft, it allows you to include a software payment plan safely in your budget. You can tell how much the licenses signed will cost and put money aside in anticipation of fulling payment. This also allows you to effectively manage fiscal resources even if license purchases take up a chunk of your finances. This also helps reduce the risk of budget overruns or sudden financial shocks.     

Making use of Software Assurance in the EA   

Software Assurance (SA) is a broad package of services that significantly simplifies the purchase, deployment, installation, management and maintenance of your software programs. Software Assurance added to your Enterprise Agreement allows you to enjoy the benefit that provides access to the latest software updates, upgrades, and support during the agreement term. This helps your organization stay current with technology.   

What are the Cons of Microsoft Enterprise Agreement?   

The cons associated with the Microsoft Enterprise Agreement need to be managed to enjoy the advantages. Again, there is the need to have, before purchasing any Microsoft product, done your own checks to understand what is on offer and if it will meet your needs.     

Complexity   

Microsoft licensing structure in EA is complex in the form of terms, conditions and wording. Interpreting what you read to get an understanding and work with can either cost you more or lead to non-compliance. This may not be the case always but to avoid such, there will be the need to get an independent Microsoft licensing expert to guide you.    

Due to the diverse product portfolio and the wide array of products and services on offer by Microsoft, including operating systems (Windows), productivity suites (Microsoft Office 365), cloud services (Azure) and collaboration tools (Teams), managing their licenses can be confusing.   

Complex licensing models  

Another issue is the various licensing models available to an organization. There is per-user licensing, per-device licensing and subscription-based models. Understanding and selecting the right licensing model for your organization’s needs can be challenging.   

There are also cloud services and subscription models like Microsoft Azure and subscription-based licensing bundles like Microsoft 365 E3 and E5. Navigating through the various options, pricing structures, and usage metrics is not a walk in the park.   

Locked-In on Microsoft products and services   

Enterprise Agreements due to their long-term commitments can tie down an organization. The extended period for which products and services will be used when you sign up can be a disadvantage if you desire to switch to alternative solutions.   

Your organization hence becomes heavily dependent on Microsoft’s products and services; this is a sales strategy by any software vendor.  You are unable to consider taking advantage of emerging technologies from other vendors that may have better solutions suited to your needs.    

Also, your being heavily dependent on Microsoft products and services may become a factor diminishing your negotiating power in future agreements. Microsoft may have less incentive to offer competitive pricing or favorable terms knowing how unlikely you are to switch to a different vendor easily. But this disadvantage can be turned around by our team of experts to give you a stronger bargaining chip if you are negotiating with Microsoft.    

True-Up preparations  

This is a requirement from Microsoft where an organization during the term of the Enterprise Agreement will have to align with the total number of licenses added up in the past 12 months. The process can be time demanding as you can easily lose track of adjustments made in terms of users, devices, products and services added. Your inability to do this may result in fines. This will be an added cost you did not budget for or anticipated.  

Unused Licenses   

This is where it is crucial to make all the initial checks to know and be sure of what licenses need to be purchased. Some organizations from experience end up purchasing more licenses than they need, leading to unused licenses and wasted resources. There is the need to seek an independent Microsoft licensing expert to help you with workable and realistic scenarios with proper license management activities to avoid such situations. However, we are also able to guide you on how to sell pre-owned/used licenses to recover part of your investments.   

Limited Flexibility for Changes   

Making changes to the agreement during its term can be challenging. In the case where your organizational needs evolve, adapting to the agreement may require additional negotiations and discussions with Microsoft which may not be in your favor if not well handled.   

Audit request and risks   

Microsoft has the right to audit your organization’s use of their products and services to ensure you are compliant. The audit request you have little say about but only to cooperate as it is part of the agreement you signed up for. The audit process can be time-consuming and may result in additional costs if compliance issues are identified. However, conducting audits at your own behest will be good to correct all issues before Microsoft picks them up. It is even better if you periodically yet frequently invite an independent Microsoft licensing expert to guide or assist with audits in your entire organization.   

Are you considering Microsoft EA? 

We have over the years as an independent licensing consultant dealt severally with Microsoft and understand how the EA works. With experience, we know how to guide you and optimize your agreement to save you costs.   

We can provide scenarios that can give you a clear picture of how EA can solve your needs. Whether you are currently having negotiations or want options aimed at getting the best for your organization, contact our team today.  

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