Enterprise Agreement

Microsoft EA vs. MCA-E: A Strategic Licensing Comparison for 2025 and Beyond

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Summary

Microsoft is shifting away from traditional Enterprise Agreements. This guide compares EA vs. MCA‑E, highlights risks, and outlines strategic actions for 2025 and beyond.

As Microsoft phases out its traditional Enterprise Agreement (EA) for many customers, procurement leaders, IT executives, and cloud architects must reassess how they engage with Microsoft's commercial licensing programmes. At SAMexpert, we've worked with global enterprises going through this transition and we've seen firsthand the operational and financial consequences of moving to Microsoft's new preferred model: the Microsoft Customer Agreement for Enterprise, or MCA‑E.

This article breaks down the key differences between EA and MCA‑E, examines product-specific clauses, Azure commitments, and legal nuances, and helps you determine the best course of action based on your organisation's size, priorities, and cloud maturity.

Quick Overview: Microsoft EA vs. MCA‑E

Feature

EA (Enterprise Agreement)

MCA‑E (Microsoft Customer Agreement for Enterprise)

Term

3 years fixed

Evergreen; flexible 1–3 year subscriptions

Minimum Seats

~500–2,400+

No minimum

Discounts

Volume-based tiers (A–D)

Negotiated per subscription

Software Assurance

Included

Optional (not default)

Azure Support

MACC not natively supported

Fully supports MACC and Azure Plan

Price Protection

3-year lock

Locked per subscription term only

Contract Amendments

Custom terms allowed

Limited flexibility

Renewal Events

Every 3 years

No fixed renewal cycle

Product Modules

Bundled

Modular and dynamic

Structural Difference: Bundled vs. Modular

The EA is a traditional master agreement: heavily negotiated, fixed-term, and comprehensive. You define your product scope, pricing tiers, and legal clauses upfront.

MCA‑E, in contrast, is a flexible shell agreement. You sign a short core agreement once, and new product-specific terms are dynamically added as you subscribe to new services. Microsoft updates these terms continuously, and you accept them by purchasing.

EA offers long-term contractual certainty. MCA‑E offers flexibility, but shifts control over future terms to Microsoft unless you actively track changes.

Azure Consumption Commitments: MACC Under MCA‑E

Microsoft Azure Consumption Commitment (MACC) is not supported under new EA contracts. MACC now lives entirely under MCA‑E (or CSP).

MACC is now only available under MCA‑E or CSP—not under Enterprise Agreements.

Under EA, Azure was purchased as a separate enrollment, with limited pricing governance. Under MCA‑E, MACC becomes a structured, subscription-based commitment, typically negotiated over 1, 2, or 3 years.

MACC under MCA‑E works differently:

  • Eligible for upfront commitment-based discounts

  • Consumption tracked via Azure Plan

  • No price tiers: discounts are negotiated per deal

  • More granular billing, with better invoice segmentation

Analyse Azure usage patterns and negotiate MACC pricing and flexibility. Consider staggered commitment tiers, rollover mechanisms, and consumption caps.


🖐 Optimise your Azure MACC strategy. Learn more: Microsoft Azure Contract Negotiation.


Legal and Regulatory Clauses: EA Flexibility vs. MCA‑E Standardisation

With EA, customers often negotiated custom indemnity and IP clauses, unique jurisdictions or dispute forums, and broad audit protections or SAM cooperation frameworks.

MCA‑E simplifies this with standardised legal language, but limits negotiation. However, Microsoft provides specific regulatory addenda:

  • Data Protection Addendum (DPA): Covers GDPR, CCPA, HIPAA

  • Financial Services Addendum: Adds regulatory audit rights, pen test provisions

  • Geographic Data Boundary Terms: Enforce EU data residency for regulated industries

  • Subprocessor Lists: Transparent global disclosure

Regional Regulatory & Industry Addenda

Microsoft offers regional-specific amendments under MCA-E for jurisdictions with elevated compliance requirements:

Germany & Switzerland: Financial services addenda include on-premise audit rights, regulator notification timelines, and operational continuity requirements.

France: Data hosting sovereignty and CNIL-specific breach notification language.

United States: FBI CJIS compliance for public sector, HIPAA enforcement for healthcare, CCPA for California-based entities.

European Union: Data residency assurance and Azure EU Data Boundary commitments applicable via region-specific appendices.

United Kingdom: ICO guidelines included in the UK version of the DPA; regional hosting clauses.

Regulated industries must explicitly activate regional addenda under MCA‑E.

These regional modules aren't automatic and must be reviewed, activated, and incorporated during agreement onboarding.

Pricing: Volume Tiers vs. Subscription-Based Negotiation

EA offers automatic volume-tiered pricing. The more users or devices you licence, the higher your discount. You lock those discounts for 3 years.

MCA‑E shifts pricing power to Microsoft—unless you negotiate each subscription.

MCA‑E does not include any default discounting. You must negotiate pricing for each subscription or MACC independently.

Several strategic risks emerge here. List pricing applies unless negotiated, price protection only lasts per subscription term, and subscription sprawl can fragment your discounts across multiple terms.

Benchmark every purchase. Use committed volume, Azure MACC spend, and historical EA pricing to negotiate favourable rates.

Security, Audit & Governance

EA operates on a true-up model. Microsoft may audit once a year to align usage and licensing.

MCA‑E maintains audit rights, but via product-level modules and DPA provisions. Customers must be prepared to show subscription history and usage alignment monthly.

EA includes Software Assurance-linked Premier or Unified Support, whilst MCA‑E does not include support and you must contract for it separately.

Comparison: EA vs MCA‑E in T&C Flexibility

Aspect

EA

MCA‑E

Product Terms

All included upfront; stable through term

Modular, appended per purchase; dynamic updates

Azure Consumption

No MACC mechanism

PAYG or MACC commitments with negotiated discounts

Price Protection

3‑year budget certainty

Term‑by‑term—negotiable with each commitment

Regulatory Addenda

Custom, individually negotiated

Standardised DPA + regional addenda (GDPR, HIPAA, CJIS, etc.)

Security & Audit Clauses

Defined in Software Assurance or Custom terms

Pen-test clauses, regulatory audit rights via addenda

Inspectorate Rights

True-up reviews; custom audit clauses

Audit rights embedded in modular product terms

Guidance for 2025

When to Keep EA (if eligible):

  • You have >2,400 users or devices

  • You want 3-year price certainty

  • You rely on customised contract terms

  • You have predictable growth and stable usage


🖐 Be prepared for future contract negotiations. Learn more: Microsoft Enterprise Agreement Negotiation.


When MCA‑E Makes Sense:

  • You're transitioning to cloud-native IT

  • You have dynamic user counts or cloud workloads

  • You want to simplify your contract structure

  • You're managing Azure MACC and need full Azure Plan alignment

MCA‑E is not "set it and forget it." You must:

  • Negotiate every major subscription or MACC

  • Track Product Term changes

  • Monitor renewal timelines and price lock expirations

  • Implement strong SAM/FinOps oversight

Real-World Observations from SAMexpert Clients

Organisations moving from EA to MCA‑E without negotiation saw 10–30% cost increases. Azure MACC transitions introduced billing complexity, but enabled better visibility. Some clients lost track of licence scope due to the modular, evergreen model. Regulated industries needed active enforcement of DPA and regional compliance terms.

Frequently Asked Questions


Is MCA‑E mandatory for all Microsoft customers now? No, but Microsoft is pushing most mid-sized and new enterprise customers toward MCA‑E, especially those under 2,400 seats. EA renewals are increasingly limited.


Can I still negotiate pricing under MCA‑E? Yes, but it must be done per subscription. There are no automatic volume discounts like EA: each pricing element requires separate negotiation.


Is Software Assurance included in MCA‑E? No. SA is not bundled by default and must be added separately, often through a standalone support agreement.


How do I manage MACC commitments under MCA‑E? MACC terms are subscription-based. You define your Azure commitment, negotiate pricing, and track consumption via the Azure Plan. Rollover and ramp-up terms need to be built in when you sign the agreement.


What are the compliance risks of not activating regional addenda? Without country-specific modules like the Financial Services or CJIS addenda, organisations risk regulatory non-compliance or lack of contractual audit rights in certain jurisdictions.


Does MCA‑E offer the same audit protection as EA? Audit rights are still present but operate through modular product-level enforcement rather than annual EA true-ups. This requires more proactive internal governance.


Final Word from SAMexpert

Microsoft's licensing model is evolving quickly. As EA becomes the exception rather than the norm, enterprises must be proactive in how they adopt, negotiate, and govern the MCA‑E framework.

If you need support designing your next-generation licensing model, negotiating Azure MACC terms, or comparing CSP vs MCA‑E based on your footprint, SAMexpert can help.

Contact our team for a licensing review and take back control of your Microsoft spend in this new era of modular, cloud-driven licensing.

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