Aside from optimizing your true-up as described above, the best time to leverage your purchasing power and strike a better deal with Microsoft, is when renegotiating the EA renewal.

Again, to do this it will always be beneficial to be as informed as possible on what your organization actually uses and needs. This helps to right-size your numbers and ensure that you are achieving as much business value as possible from the investment in Microsoft technology.
Bear in mind that negotiating any none-standard agreement with a mega vendor like Microsoft needs to be a two-way street; you need to be aware of Microsoft’s strategy and have something to offer in return, for Microsoft to agree to changes in standard practices.

Therefore, in order to negotiate with your Microsoft account manager or reseller, you need to consider:

Be Prepared
It goes without saying that you need good information to negotiate and the more insight and data you have to make informed assertions, the stronger your position will be. SAM is always about evidence and if you have evidence of what you have and what you need, then you can plan further ahead more accurately. Future prospecting and ability to safely commit to a plan of realistic growth is your greatest commercial leverage in the negotiation.

Time and Timing
It takes time to negotiate and to get agreements signed-off at both on both sides of the table. So, if you want to negotiate, always allow as much time as possible to do so, or run the risk of potentially losing leverage at critical points in the agreement process.
Also, like any business, Microsoft’s fiscal year-end on 30th June is a potential tipping point to get new deals recognized, but also don’t underestimate the impact of a slow first quarter on sales teams’ hunger to increase their numbers.

Microsoft’s Strategy Prioritizes Cloud Growth
Negotiating on on-premises licensing is not likely to be attractive to Microsoft – they want you in the cloud and they want you on the higher, premium plans. If your strategy does not align with Microsoft’s, then there is little incentive to make changes.

Measure SaaS Usage and Define What Your Business Needs
There are two sides to understating and optimizing what SaaS licenses your users really need – what they actually use and what they should be using.
A SaaS optimization solution will give you clarity over what users really use on a daily basis and therefore an understanding of what product features and license level are the best fit:
• Identify inactive users and unused SaaS subscriptions
• Identify users that don’t use the full functionality of their assigned license type and the license could be downgraded without impacting productivity

Next, consider cloud sprawl and whether you have two or more SaaS products that provide the same functionality and could therefore be rationalized down to just one. Outlook and Gmail are a classic example, or collaborative working tools like Slack and Zoom crossing over with functionality within MS Teams.

Standardizing on approved products reduces costs and will also make support easier and will increase security, with greater control over your data.
Once you know exactly what you actually need, you’re in an informed position to go out and negotiate an agreement.

Optimize and Forecast Your Growth Within Azure
Cloud optimization and forecasting is essential to controlling spiraling costs and so being as informed as possible on this growth is what Microsoft will want to lock-in.
EAs already offer some great benefits in Azure, such as Active Directory Premium, multi-factor authentication and 99.99% guaranteed uptime, but Microsoft want to keep you on-board and understand your year 2 and 3 growth (and beyond). This may be your greatest leverage in negotiations and will require insight from a Cloud Cost Management solution for Azure.

Longevity – Dangle Carrots and Lock Down Bouncy Prices
Consider what Microsoft want – like any SaaS business, they’re in a market that’s profitable but customers now have more choice and can be more fickle than ever. Microsoft know they need to deliver value to you to retain your business, and retention brings in more revenue at less cost than acquiring new business. So, renewals work to your advantage in terms of requesting discounts.

Generally, when a discount is secure in year one, vendors will seek to recoup that lost revenue in subsequent years, so be mindful of this dynamic and lock-down pricing as far as possible by requesting reasonable limits to future prices rises on your renewals.
An Enterprise Agreement is a 3year commitment with an option to renew for 1 or 3 years. Microsoft account managers work on the long-term value of the contract, so give them the best understanding as possible of your future requirements.

Using Wider Market Dynamics
As alternatives to Microsoft are now a possibility, having prices from MS competitors gives you a solid foundation to inspire movement on list prices.
This raises the next question – can you get any pricing insights from your peers within other businesses as a benchmark? This can be a shaky proposition to pull off. Firstly, it erodes confidentiality and trust and secondly, you need to expect a response that ‘no two scenarios can be exactly the same’.

Whether or not you’re ‘comparing apples with apples’ is almost impossible to validate. You would need to be able to really understand quantify any differences in value before attempting to squeeze any part of the pricing structure with a logical argument.

Partnership
What is likely a more positive approach to agreeing discounts and better terms, is adopting the stance of both parties being mutually more valuable to one another.

This is much easier if you’re fortunate enough to have a prestigious brand that Microsoft can openly talk about. Account managers have access to incentives to actively secure big names for Microsoft against their competitors, so if you’ve got it – flaunt it! Being helpful is not to be underestimated, if you have a high profile then being available for case studies, references or mutual partnership and branding opportunities is highly valued.

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.