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

Microsoft is phasing out the Enterprise Agreement for many customers and pushing them toward the Microsoft Customer Agreement for Enterprise (MCA-E). Even large enterprises are affected: volume discounts for Online Services have been eliminated, and the operational model is fundamentally different.

At SAMexpert, we've worked with global enterprises undergoing this transition and have seen firsthand the operational and financial consequences of moving to Microsoft's new preferred model.

This article, updated for 2026, compares EA and MCA-E – how they differ in structure, pricing, and compliance, and what to watch for, whether you're renewing your EA or being moved to MCA-E.

Quick Overview: Microsoft EA vs. MCA‑E

Structural Difference: Bundled vs. Modular

The EA is a traditional master agreement: heavily negotiated, fixed-term, and comprehensive. You define your product scope, negotiate pricing, and agree on 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 available under both EA and MCA-E, though the mechanics differ. Under EA, Azure is purchased as a separate enrolment. Under MCA-E, MACC is structured as a commitment tracked via Azure Plan.

Microsoft's strategic direction favours MCA-E for Azure commitments, but MACC remains technically available under EA.

Under EA, Azure was purchased as a separate enrolment. Under MCA-E, MACC is a structured commitment, typically negotiated over 1, 2, or 3 years, with consumption tracked via Azure Plan.

There are no automatic price tiers. Discounts are negotiated on a per-deal basis depending on your commitment level.

When negotiating MACC, consider rollover mechanisms (what happens to unused commitment), consumption caps, and whether to stagger commitments across multiple terms rather than one large upfront deal.

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

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

Under EA, large enterprises often negotiated custom terms: indemnity and IP clauses, choice of jurisdiction, audit protections, and agreed frameworks for software asset management reviews.

MCA-E simplifies this with standardised legal language, but limits negotiation. Microsoft's compliance provisions now sit outside the core agreement:

• Data Protection Addendum (DPA): Applies to all Microsoft online services and includes standard terms for GDPR, CCPA, and HIPAA Business Associate.

• Financial Services Amendment: Available for regulated financial institutions, providing additional audit rights, penetration testing provisions, and regulator access. An optional, fee-based Compliance Program provides additional monitoring and oversight.

• DORA Addendum (EU Financial Services): From January 2025, EU financial entities must comply with the Digital Operational Resilience Act. Microsoft offers a specific DORA Addendum for MCA-E and CSP customers, addressing ICT third-party risk management, subcontractor transparency, and regulator access requirements under DORA Article 30. Request this through your Microsoft account team.

• EU Data Boundary: Customers with EU/EFTA billing addresses can configure services to store and process data within the EU. This is a product configuration, not a separate contract.

• Subprocessor Lists: Microsoft publishes authorised subprocessors via the Trust Center, with six months' advance notice of changes.

The key difference: EA allowed you to negotiate these protections into your contract. Under MCA-E, you rely on Microsoft's standardised provisions and must actively configure compliance options where available.

Regulated industries and specific jurisdictions may have additional requirements. Swiss customers, for example, have particular addenda for data protection and professional secrecy. German customers can request the MCA Supplement for German Online Services. US public-sector customers handling criminal justice information must have separate CJIS agreements with state agencies. These aren't automatic and must be identified and activated during onboarding.

Under EA, you negotiated these protections into your contract. Under MCA-E, you assemble them from Microsoft's standard menu. Know what's on the menu before you sign.

Pricing: The End of Automatic Volume Discounts

EA historically offered automatic volume discounts through price levels A to D. Larger organisations received better unit pricing, with Level D customers (24,000+ users) receiving approximately 13% off list price. These discounts were locked for the three-year term.

From 1 November 2025, Microsoft eliminated these automatic volume discounts for all Online Services purchased through EA and MPSA. All customers now pay Level A pricing, which matches the public list price on Microsoft.com. On-premises software pricing remains unchanged.

The financial impact depends on your current discount level. An organisation with 25,000 Microsoft 365 E5 users previously at Level D pricing faces approximately £2–3 million in additional annual costs at renewal for the same products and quantities.

Existing EA customers retain their current pricing until their agreement expires. However, any new Online Services added after 1 November 2025 are priced at Level A regardless of historical discount level. At renewal, all pricing resets to Level A unless alternative terms are negotiated.

Microsoft levelled the pricing playing field by removing EA's advantage rather than improving MCA-E's.

The gap between EA and MCA-E has narrowed. Automatic volume discounts were a key EA advantage that MCA-E lacked. With their removal, both programmes now start from the same list price. Discounts under either programme must be individually negotiated.

Microsoft now links discounts to strategic commitments such as Copilot adoption, Azure consumption growth, E5 migration, or Unified Support agreements rather than to volume alone.

Organisations approaching renewal should model costs at Level A pricing and optimise licence counts before negotiating. Benchmark every purchase against committed volume, Azure MACC spend, and historical EA pricing to negotiate favourable rates.

Governance, Audit, and Compliance

EA operates on a true-up model. Once a year, you reconcile actual usage with licensed quantities and pay for any additional licences consumed. Microsoft may audit, but the true-up itself acts as a regular compliance checkpoint. Licensing Solution Providers (LSPs) often provided support funded through their transaction margins.

MCA-E doesn't have the true-up facility.

MCA-E removes the true-up. There is no annual reconciliation and no built-in compliance checkpoint. The LSP model disappears entirely: no partner margins, no partner-funded licensing support, no intermediary to help interpret complex scenarios. Microsoft takes agreements in-house but is not scaling resources to provide hands-on licensing guidance. If you relied on your LSP for compliance advice, true-up preparation, or audit support, you must now build that capability internally or engage independent advisors.

The compliance burden shifts entirely to you. Under EA, if you deployed more than you licensed, you would fix it at true-up. Under MCA-E, you are non-compliant immediately, and Microsoft retains strong audit and verification rights. The agreement includes specific terms granting Microsoft authority to verify compliance and seek compensation for shortfalls.

Without the discipline of an annual true-up, organisations must implement their own compliance rhythm through Software Asset Management or FinOps programmes. Those who do not invest in ongoing licence governance risk audit exposure with no structured opportunity to self-correct beforehand.

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

Guidance for 2026

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 using Azure MACC and need it managed via Azure Plan

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 and FinOps oversight

Real-World Observations from SAMexpert Clients

Organisations moving from EA to MCA-E without negotiation saw 10–30% cost increases. Some lost track of licence scope due to the modular, evergreen model. Without the annual true-up checkpoint, entitlements drifted. Azure MACC transitions required operational adjustment but improved spend visibility once bedded in.

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 with fewer than 2,400 seats. EA renewals are increasingly limited.

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

Is Software Assurance included in MCA‑E? SA is not applicable. MCA-E is subscription-based, so the concept of Software Assurance (which applies to perpetual licences) does not carry over. Support must be purchased separately.

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 must be included in the agreement.

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

Final Word from SAMexpert

EA is becoming harder to renew. MCA-E is where Microsoft is pushing most customers, though CSP may be a better fit depending on your situation. The transition is manageable, but not if it's rushed or left to Microsoft to dictate terms.

If you need support negotiating your move to MCA-E, reviewing Azure MACC terms, or understanding what you lose by leaving EA, contact our team for a licensing review.