M365 - License Optimization Center

Renewing a Microsoft Enterprise Agreement (EA) is one of the most significant technology purchasing events for organizations. With stakes running into the millions, the way IT and Procurement teams collaborate can make or break the outcome. Too often, companies fall into the trap of working in silos, resulting in over-licensing, wasted spending, and inflexible commitments that weigh on budgets for years. In this blog, we’ll explore how Procurement and IT collaboration, during EA renewals, can prevent overspending and ensure every dollar delivers value. 

When your Microsoft agreement is up for renewal, you face more than just a contract choice. You’re making a strategic decision that affects cost allocation, reporting, flexibility, and your cloud roadmap for the next 3+ years. 

Beginning November 1, 2025, Microsoft will introduce a significant update to its commercial pricing strategy in what Microsoft calls its largest Microsoft Online Services pricing update since the introduction of single starting prices in 2023. This change will directly impact how organizations budget, renew, and negotiate Enterprise Agreements. 

Renewing your Microsoft Enterprise Agreement (EA) used to be a fairly predictable process. However, As ofJan 2025, Microsoft is actively forcing an EA transition to MCA. With the introduction of the Microsoft Customer Agreement (MCA) and ongoing changes to how licenses, Azure spend, and reporting are handled, the stakes are much higher. A rushed or incomplete review can lock your organization into unnecessary costs, eliminate true-down flexibility, and make future budgeting a nightmare. 

As Microsoft continues evolving its cloud-first ecosystem, many enterprise customers are reevaluating the value of Microsoft Unified Support compared to its predecessor, Premier Support. Once a cornerstone for enterprise IT support, Microsoft Premier Support was phased out in favor of a more standardized, and often criticized, Unified Support model.

Once a significant component of Microsoft’s enterprise agreements, Software Assurance (SA) has steadily declined in value. Microsoft Software Assurance (SA)has long been marketed as a value-added benefit for enterprise customers, offering features like free upgrades, training vouchers, support services, and compliance flexibility. However, over the past several years, Software Assurance has undergone a significant transformation—one that is leaving many organizations questioning its current value. 

As organizations and their executives place an even greater emphasis on resiliency, IT leaders face growing pressure to reduce costs while ensuring their users have the necessary tools to work efficiently. One of the most overlooked, yet high-impact, strategies in Microsoft 365 license management is user profiling. Establishing a scalable license governance strategy early on can lead to substantial cost savings, increased operational efficiency, and a stronger return on investment. 

Microsoft’s licensing landscape for Microsoft 365 is evolving rapidly, with new agreements like the Microsoft Customer Agreement Enterprise (MCA-E) and a shift toward cloud-based, direct models. For IT and procurement professionals, these changes present opportunities to optimize costs but also risks of overspending or non-compliance.

In part 1 we discussed what’s new in Microsoft Licensing. We covered how licenses, subscriptions, and contracts are changing with the relationships between Microsoft, Microsoft’s partners, and their customers. Next, we need to discuss how to approach the task of purchasing and managing Microsoft solutions within our businesses. 

We didn't want to leave you out of the loop if you missed our recent webinar, Microsoft 365 License Management: How to Optimize in a New Era of Changes. Don't worry; we have you covered with a quick recap of the highlights.   

In this session, ENow CEO Jay Gundotra sat down with Ben Marshall, Global Head of Licensing at HP Inc., to explore the factors affecting Microsoft 365 licensing today. They discussed everything from significant macro trends to strategic advice on optimizing licenses to match organization and user needs, along with the impact of Microsoft's latest changes.