Understanding a Microsoft Enterprise Agreement True-up

Oct 22, 2019

Dan Whitefield, Technical Consultant, Certero

Originally posted in June 2016, revised in October 2019.

What is a Microsoft Enterprise Agreement true-up?

If you are a Microsoft Enterprise Agreement (EA) customer you will probably already appreciate the advantages it gives you with regard to licensing flexibility when you deploy new hardware and software. But, as it is a trust-based contract, it requires certain commitments from your end as you can find yourself on the end of a Microsoft Enterprise Agreement true-up if you do not follow the rules.

Specifically, you have to inventory new hardware and software deployed since the annual anniversary to meet your business requirements. You then need to send to Microsoft one of the following:

  • A statement declaring no change to qualified hardware, software or online services since the last anniversary
  • A true-up order for any increase in qualified hardware, software or online services since the last anniversary
  • A license reduction for Enterprise Online services (as long as the agreement minimum is maintained – generally 500 User subscription licenses)


Microsoft Enterprise Agreement true-up

What needs to be looked at in a Microsoft Enterprise Agreement true-up?

You need to account for any increase in qualified desktops, qualified users, enterprise Online Services User SL’s and/or additional products/additional online services run since the last anniversary. For:

  • Qualified desktops – Office suites, Windows (OS upgrade and MDOP) and CAL suites (Core/ECAL)
  • Qualified Users –  CAL (Core/ECAL)
  • Enterprise Online services – M365/O365/Windows 10 Enterprise/EMS

Enterprise Products for desktops/users must have equal quantities across all components. E.g. If the initial order was for Office, Windows and CAL and now 200 Users are being added via true-up, the true-up order must have equal quantities; i.e. 200 Office + 200 Windows + 200 CAL.

This inventory needs to be carried out even if you have reduced the number of desktops and/or users across the company. This will ensure that for products like SQL, which are not licensed per desktop, any growth will be captured.

For Online Services, enterprise-wide licensing is not required (i.e. 750 x M365 E3 User SL’s on initial order). True up can be for 200 additional O365 E3 User SL’s. Additional licenses can be added at any time (generally through a license reservation via the VLSC), and reconciled at anniversary.

What do you need to count for a Microsoft Enterprise Agreement true-up?

According to Microsoft, all devices included in the EA must be inventoried as part of the annual true-up process, including all servers, computers (desktops, laptops, and terminals) and mobile devices that use licensed software from the Microsoft  product list.

In addition, the following elements must be inventoried:

  • The number of qualified desktops, including the date they were put into service
  • The number of qualified users if counting core CAL or ECAL via user vs. device, including the date in which they became qualified users, via hire or assignment
  • The number of Operating System Environments (OSEs) running Microsoft software that has been licensed under the EA and when they were put in service – an OSE can be running on either a physical or virtual server
  • The number of CPUs running Microsoft software in each server, including the date they were put into service.
  • The number of qualifying underlying OS licenses on desktops, including the type of OS and date they were put into service.
  • The number of devices added which require Device CALs.  If counting via user vs. device, the number of users added for which User CALs are required.
  • The number of actual servers requiring access to external users (e.g., supporting internet sites), including the date which that external access was allowed.


How to avoid Microsoft true-up charges

No organization wants to be caught out with expensive true-up charges, so what can you do to minimize the impact when your annual renewal is due?

The answer is IT Hardware and Software Asset Management. Essentially, you need to continuously re-harvest and optimize your IT assets to ensure that when your renewal is due, you stand a greater chance of submitting a ‘no change’ or ‘license reduction’ declaration to Microsoft.

To do this you need to be able to generate a Microsoft Effective License Position (ELP) that covers your desktop, data center and cloud environments, and use it to continuously optimize your IT ecosystem. How? By following these four steps:

1. Discover, inventory, identify and track the usage of all relevant software
2. Clarify your license entitlements
3. Create your Microsoft ELP
4. Implement optimization plans

The best way to successfully and efficiently deliver this is using an automated SAM tool, such as Certero for Enterprise SAM. This will give you full hardware and software inventory, lightning-fast data collection and processing, dynamic ELPs and in-built analytics and custom dashboards.

However, deploying a SAM tool is only an option if you have the right licensing experts in-house. If your organization doesn’t, you can opt for a SAM Managed Service that will take away all the pain and hassle of managing and optimizing your IT estate.

If you want to discuss your Microsoft licensing challenges or need help deciding which option is best for your organization, you can request a call back or chat to one of our experts below.

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