Cut Costs on Microsoft EA Renewals: IT and Procurement Collaboration Guide

Renewing a Microsoft Enterprise Agreement (EA) is one of the most significant technology purchasing events for organizations. With stakes running into the millions, the way IT and Procurement teams collaborate can make or break the outcome. Too often, companies fall into the trap of working in silos, resulting in over-licensing, wasted spending, and inflexible commitments that weigh on budgets for years. In this blog, we’ll explore how Procurement and IT collaboration, during EA renewals, can prevent overspending and ensure every dollar delivers value. 

Typical Silos Between IT and Procurement 

In many organizations, IT and Procurement approach Microsoft EA renewals from different vantage points: 

• IT’s focus: Ensuring end users and infrastructure have the right tools, functionality, and security coverage. They emphasize uptime, licensing compliance, and technical requirements. 
• Procurement’s focus: Negotiating the best possible deal, enforcing budget controls, and ensuring financial accountability. 

While both roles are critical, lack of coordination often results in: 

• Duplicate or unnecessary licenses due to poor visibility into actual usage. 
• Missed savings opportunities when Procurement isn’t fully aware of IT’s true needs. 
• Contract inflexibility because IT overestimates demand to avoid shortages, while Procurement over-optimizes for cost reduction. 
  
  

Pro Tip: Before starting renewal discussions, establish a single source of truth for license usage data that both teams can reference. 

Breaking down these silos is the first step toward a smarter, leaner Microsoft licensing strategy that doesn’t inhibit productivity and security. 

How IT Justifies User License and Server Counts 

During an Enterprise Agreement renewal strategy, IT is responsible for justifying licensing needs based on: 

• User counts: How many employees require Productivity licenses (Microsoft 365 Business, Microsoft 365, or other bundles)? 
• Server workloads: SQL, Windows Server, and hybrid workloads that may require Software Assurance or hybrid rights. 
• Security and compliance requirements: Add-ons like Microsoft Defender, Purview, and Intune that IT deems essential to meet regulatory or risk standards. 

The challenge? Without accurate usage data, IT tends to lean more conservatively, inflating numbers to ensure coverage, leaving a buffer for unforeseen growth. While understandable, this conservative approach leads to over-licensing and overspending when user attrition or slower-than-expected adoption occurs. 

Procurement must pressure-test IT’s justifications with usage data, growth forecasts, and real consumption metrics. 

Procurement’s Role as the “Police” in EA Budgeting 

Procurement typically acts as the financial watchdog in Microsoft licensing negotiations. Their responsibilities include: 

• Enforcing budget discipline: Ensuring the company doesn’t overcommit to licenses and services that lack business justification or usage data. 
• Challenging assumptions: Reviewing IT’s license requests against actual usage and forecasted demand. 
• Negotiating terms: Pushing Microsoft or resellers for better pricing, discounts, price protection, and flexible renewal options. 

While critical, Procurement’s “policing” role can sometimes create friction with IT, especially if cost-cutting feels like it comes at the expense of service quality or access to critical workloads or features. The key is balance: Procurement must uphold fiscal responsibility without undermining IT’s ability to deliver business outcomes. 

Hybrid Rights and Cloud Migration Decisions 

Microsoft’s licensing models make EA renewals even more complex by tying them to cloud strategies. IT leaders often weigh: 

• Hybrid use rights: The ability to reassign eligible on-premises licenses while transitioning to the cloud. 
• Azure commitments: Pre-paying for cloud consumption, which impacts both IT budgets and Procurement’s financial flexibility. 
• Cloud adoption timelines: Overestimating cloud migration speed can result in wasted spend on underutilized Azure commitments. 

For example, if IT assumes a rapid migration to Azure and licenses accordingly, but real-world migration stalls, the organization is locked into paying for cloud capacity it cannot use. Procurement should challenge these assumptions by asking: 

• What is the realistic cloud migration roadmap? 
• How much capacity can be shifted from on-premises to cloud within the EA term? 
• Are there hybrid licensing options that maintain flexibility? 
• Do you have governance in place to monitor commitment burn-down monthly?

Alignment here can prevent millions in stranded costs. 

Forecasting Growth and Avoiding Over-Provisioning 

Another recurring pain point is growth forecasting. IT often estimates user counts based on projected headcount, mergers, or expansion plans. But these projections frequently overshoot reality. 

Over-provisioning risks include: 

• Paying upfront for licenses that go unused. Commitment made upfront may not reflect actual usage, especially if hiring slows or projects shift.
• Losing flexibility to scale down during layoffs or organizational changes. Without flexible licensing, it's difficult to scale back after business changes. 
• Budget strain due to locked-in commitments. 

Procurement can help mitigate this risk by: 

• Requesting true-down options to recover costs from unused licenses. 
• Building in step-up clauses to scale only when growth actually happens. 
• Reviewing historical hiring patterns to challenge overly optimistic projections. 

The best outcomes occur when IT and Procurement use data-driven usage and forecasting rather than gut feel or worst-case planning. 

Pro Tip: Don’t assume every new hire requires an E5 license. Consider mix-and-match strategies (E1/E3 with add-ons) to optimize spend. 

Practical Steps to Align IT and Procurement Before a Microsoft Renewal 

So how can organizations ensure IT and Procurement teams collaborate effectively during Microsoft EA renewals? Here are some proven steps: 

1. Create a joint renewal task force. Include stakeholders from IT, Procurement, Finance, and Security to align requirements and budgets early. 
2. Run a license usage audit. Analyze actual license consumption across Microsoft 365, Azure, and server workloads. 
3. Map business priorities. Identify which Microsoft workloads are mission-critical versus nice-to-have and align license choices accordingly. 
4. Develop multiple scenarios. Build “what-if” models for growth, attrition, or delayed cloud migration to test assumptions. 
5. Negotiate with transparency. Present Microsoft with a unified front, blending IT’s technical requirements with Procurement’s financial rigor. 
6. Schedule ongoing check-ins. Don’t wait until renewal year; review license consumption quarterly to stay aligned and avoid surprises. 

Conclusion: Collaboration is a Million-Dollar Difference 

Microsoft EA renewals are complex, high-stakes negotiations that directly impact budgets and IT performance. When IT and Procurement work in silos, organizations overspend, over-license, and overcommit. But when they collaborate, confirm assumptions with data, and balance risk with flexibility, companies can save millions while still empowering their workforce with the right tools. 

The bottom line: Breaking down silos between IT and Procurement is a smart move any organization can make heading into their next Microsoft EA renewal. By working together, you can transform your renewal from a financial burden into a strategic advantage. 

Ready to Cut Waste from Your Next Microsoft EA Renewal? 

Don’t go into your Microsoft Enterprise Agreement renewal without your data. With ENow’s Microsoft 365 License Optimization Demo, you’ll see how to: 

• Audit actual license usage across Microsoft 365 

• Identify over-licensing and duplicative licensing 

• Build a data-driven strategy that IT and Procurement can align on 

Request Your Microsoft 365 License Optimization Demo and learn how to save money while ensuring the right tools for every user.