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Negotiate Your Microsoft 365 True-Up and EA Renewal Like Jerry Maguire

microsoft ea true up savings

IT pros are expert in the art of managing technology, but not as adept in the world of finance. As a result, IT is at a disadvantage when negotiating annual Microsoft 365 True-Up and hammering out Enterprise Agreement (EA) renewal contracts every three years.

IT has one advantage, however — the ability to deeply analyze the software it is actually using, and identify licenses that aren’t being used or are underused. That is exactly the data needed to properly negotiate True-Ups and EA renewals.

In fact, IT is in a far better position to gather this data then SaaS software vendors including Microsoft. SaaS vendors assume that every license you have is being used, and you should probably buy extras as a buffer as your company grows.

The opposite is likely true. Chances are you have more licenses, probably far more licenses, than you actually need. While correcting this can save your organization money, that dough can also fund new strategic IT initiatives.

CoreView put together a comprehensive guide to negotiating True-Up and EA agreements. You can download the guide, Prepare for Your Microsoft Annual True-Up (and EA Renewal) – 14 Cost Saving Tips, here.

Here is a sneak peek at the 14 ways you can ace your next True-Up or EA renewal.

Step One – Open Your Eyes to Visibility

Visibility is one of the top issues – which means seeing license counts, usage and costs. Finance departments, for instance, send out bills — a chargeback to each of the departments or business units. Unfortunately, these departments can’t reconcile or see what they’re being billed for and why.

Step Two – Avoid Surprises

Without visibility, these over-licensing issues only arise during the annual Microsoft True-Up process. So what exactly is a True-Up? “The EA enrollment has a three-year term, with the option to be renewed after each cycle. As part of the EA, your company is required to perform an annual True-up inventory to identify the number of qualified desktops and users, servers, CPUs, computers, and other devices running Microsoft software, and take into account any licenses that may have been added during the previous 12 months. This inventory is required at the end of each of the three years of the agreement,” Microsoft explained.

During this True-Up inventory process, departments, business units, and even the entire enterprise are commonly surprised – sometimes shocked – to see the costs they are facing, wondering how license counts have risen so high.

Step Three – Embrace Licensing Best Practices

You can eliminate licensing blind spots and dramatically alter the licensing end game. You do that by operationalizing a best practice around reclaiming licenses before ordering new ones, and being more proactive in preparing for your True-Ups and EA renewals.

Step Four – Forget the Easy (and Expensive) Way Out

Too many companies, concerned with keeping business moving smoothly, simply buy and add licenses as they THINK they need — just to make sure that everybody in their teams are covered.

Understanding license usages, in normal circumstances, is a very manual process. Without a solution such as CoreView, business line managers must ask central IT and their PowerShell gurus to create custom usage reports

Step Five – the Proactive Approach is the Smart Way to Go

By being proactive, IT doesn’t carry unused or unassigned licenses, or pay for expensive licenses when cheaper ones suffice. Fixing this requires proactive best practices and processes that utilize auto provisioning, and deep license provisioning, best practices and processes. This involves creating workflows and automating license management as much as possible.

The only time you should request additional licenses is if there are no licenses to reclaim within your organization. You can only follow this practice if you know what you have and how it is used.

Replace Reactive License Management With Proactive

Replace Reactive License Management With Proactive

Step Six – Get Detailed, Actionable License Reports

The key to understanding Microsoft SaaS economics are license reports showing the exact counts and precise usage. This should include inactive, unused, duplicate, and disabled licenses – along with the license levels such as E1, E3, E5 etc. You can convert those reports and findings into KPIs and build custom licensing dashboards.

These KPIs are in essence your reporting tool, and the resulting reports can be scheduled on a regular basis or whatever cadence the organization prefers. This way it is a much easier push rather than a pull. You can customize these for each department, each business unit, whatever works best.

Step Seven – Create and Leverage KPIs

We already talked about taking licensing reports, creating KPIs off of them, tying them into a dashboard and giving you the ability to have a view into your licensing. This way you control the metrics by which you measure license cost efficiency.

Step Eight – Track Consumption

Most finance and M365 professionals have no idea what licenses are being used, and how many of the apps and services are actually consumed – and to what degree. Here is where a consumption dashboard comes in which includes all this detail – as well as the costs. IT and department heads can see inactive and active user counts, then drill down into any department or user set to find out exactly who is using what — and what that activity has been.

Step Nine – Take Remediation Action

Knowing you have a license problem and doing something about it are two different things. Remediation tasks include delicensing people that have never used an application or their license. IT or managers can invoke a workflow to automate that license removal process.

Step Ten – Jump Into License Pools

Most M365-based enterprises have licenses in one big jumble. A better idea is to segment licenses – and license management – through pools. Once organized this way, management can examine – and tightly control — license pool costs including price per user.

Step Eleven – Look Deep Into Dashboards

Not all people managing licenses are IT pros. That’s why dashboards are such a nice way to keep all the details in one easy to read place. We recommend looking at the dashboard weekly if you are looking to add more licenses — but at a minimum on a monthly basis to make sure groups are utilizing the licenses they have as proactively as possible.

Step Twelve – Arm Yourself with Data

An accurate and detailed license analysis is a critical basis of any True-Up or EA negotiation. “Heading to negotiations with the right information is a key factor in the success of any negotiation. Having current licenses, hardware, and software information gathered in advance, and having it organized in an accessible way is a critical step,” said Emerset Consulting Group in its article Top 10 Mistakes to Avoid When Negotiating with Microsoft. “When you show up to the negotiation table, having this information meticulously organized in advance helps you know where you want to go with future technology and licensing, and puts you in the leadership role vis a vis Microsoft.”

Step Thirteen – Combine RBAC and License Management

When an enterprise has global administrators managing sometimes many thousands of licenses, much can fall through the cracks. One solution is to designate local, group or departmental administrators to keep an eye on licenses. This Role-Based Access Control (RBAC) approach implements local operators, combines process and workflow automation, close and careful license management, and produces deep savings and total license optimization.

Step Fourteen – Actively Upgrade or Downgrade Licenses

License optimization is not just about getting rid of unneeded licenses, or downgrading to only pay for the license levels you need. In many cases, a license, say an E3 or E5, is not fully used – but should be. Here you can train those users to fully utilize paid for applications, and thus dramatically boost productivity. By the same token, you may identify low-level licenses, especially E1s that should be upgraded so the users can more fully contribute to the financial health of your organization.

Free Microsoft 365 Health Check is Your Negotiating Secret Weapon

There is a free way to strike the best deal possible. That’s right. The CoreView Microsoft 365 Health Check scans and analyzes your entire M365 environment, finds every license, then determines four things:

  • What percentage of licenses are actually used.
  • What amount of licenses are unused — perhaps because the employee left or simply stopped using the software.
  • How many licenses are unassigned, and thus free to be returned or reallocated.
  • Amongst used licenses, what are the workloads and do the licenses match the actual or desired usage.

The CoreView Microsoft 365 Health Check is a comprehensive M365 deep scan, analysis and assessment of your entire Microsoft SaaS environment. This assessment provides a complete overview of Microsoft 365 license costs, and overall usage activities for workloads inside your environment.

See how CoreView can help you with this

Learn more about securing and optimizing your M365 and other SaaS applications.