Microsoft Kicks Off Its FY25 Plans with a Push to MCA-E

As Microsoft enters its new fiscal year, there is increased internal pressure to grow revenue and streamline backend operations. It pushes the company to accelerate the migration of Enterprise Agreement customers to the new MCA-E contracts, primarily focusing on Azure consumption agreements. While generally beneficial for end customers, this shift raises some concerns that must be addressed.

The Microsoft Customer Agreement is a user-friendly and non-expiring contract that simplifies the purchasing process for Microsoft Cloud products and services. Unlike older cumbersome agreements like the Microsoft Online Subscription Agreement (MOSA) and the Microsoft Products and Services Agreement (MPSA), the MCA is modular. Customers only see the terms relevant to their services, making it more accessible and less confusing.

While MCA offers streamlined processes, it's important to remember the financial and legal benefits of the Enterprise Agreement, especially for large organisations. EA provides a fully negotiable framework that can be customised to meet specific requirements, ensuring efficient licensing costs and compliance. This flexibility can result in significant long-term cost savings and more predictable budgets essential for large-scale operations.

Migrating Azure workloads between EA, MCA, and CSP agreements can be resource-intensive and complex. The billing systems for these agreements are entirely separate, requiring meticulous planning and substantial resources to prevent disruptions.

Currently, commercial customers have several options for purchasing Microsoft cloud services: EA, MCA, or directly from Microsoft Online. Since 2019, Microsoft has expanded MCA availability to include Azure, Microsoft 365, Dynamics 365, the Power Platform, and Windows 365.

Microsoft is promoting the Microsoft Customer Agreement for Enterprise (MCA-E), emphasising benefits such as streamlined digital agreements, flexible billing structures, customisable invoices, and simplified tenant management.

When transitioning from an Enterprise Agreement (EA) to a Microsoft Customer Agreement (MCA), there are some drawbacks to consider. Under an MCA, you cannot buy or renew Software Assurance for perpetual licenses such as Windows Server and SQL Server. Additionally, certain Microsoft 365 User and Device Subscription Licenses are not available. These differences between EA and MCA can lead to legal uncertainties and contract management complexities.

In our recent SAMexpert webinar, we discussed Microsoft's initiative to transition smaller EA customers to MCA-E by providing financial discounts as incentives. It's crucial to ensure these discounts are secured for at least 3 years, ideally five years, to maximise savings and stability.

In the long run, enterprises should prioritise reducing costs and having predictable budgets. Azure cost management should be emphasised more than the type of agreement. Effective cost management strategies can result in significant savings and more reliable financial planning, which is crucial for sustaining business operations.

Stay informed, plan wisely, and here's to navigating these changes successfully!