Best time to cut Microsoft Enterprise Agreement costs: True-Ups and Renewals
Microsoft Enterprise Agreements (EAs) can streamline software licensing, but complex mechanics and confusing terminology can drain your budget. Understanding when to take action is key to getting the most out of your EA investment and cutting costs.
What's a True-Up? The Annual Reconciliation.
True-ups are annual EA checkups. Each year of your contract, you reconcile your actual software usage with your current licenses. Did your company grow? Did you deploy more products? If so, a true-up is where you purchase the necessary licences to stay compliant.
While you aren't negotiating prices at a true-up, accuracy here is vital to avoid overspending.
A standard EA typically lasts for three years, with three true-ups during that period.
Renewals: Where the Real Cost-Cutting Happens
Think of renewals as a chance to hit the reset button. Your existing EA expires, and you negotiate the terms of a brand-new one. This is where you have the most leverage to cut costs – the prices, the commitments, and what products you're even licensing. A seasoned negotiator is your friend when renewal time comes around.
Why Focusing on True-Ups and Renewals Saves You Money
Avoid Overbuying: True-ups highlight optimization opportunities. While true-ups are primarily about compliance, having a clear picture of your software usage lets you identify potential areas to reduce your licensing commitments. Careful counting of users and licences is key to avoiding unnecessary purchases during your next renewal.
Renewal Power: When your EA expires, you have options. That gives you the upper hand to negotiate better prices or change what you're licensing entirely. Microsoft account managers are typically incentivised with 15-20% uplift targets on renewals – use this knowledge to your advantage.
Strategic Planning: Analysing usage trends at true-ups helps you forecast needs at renewal time, leading to more informed decisions. Start strategising for your renewal well in advance, analysing your true-up data and determining your future software needs.
The SAMexpert Edge
Need more clarity and bespoke advice? SAMexpert, an independent Microsoft-focused consultancy, helps enterprises like yours manage true-ups and renewals. We ensure you're getting fair deals, staying compliant, and optimising your Microsoft investment.