For organizations experiencing the resource drain that is the impending expiration of a Microsoft Enterprise Agreement (“EA”), the decision of whether to move forward with renewal is critical. These renewals easily can impart a seven-figure hit on an organization’s IT expenditure, and it is important to understand the full spectrum of the costs and benefits of renewal. Key factors to consider when making an EA renewal decision include the following:

  1. You already paid for a perpetual license. Upon expiration of the EA, the organization retains perpetual use rights to all of the software titles they ordered during the term of the agreement. Organizations do not need to renew just to continue using the products that are currently licensed and installed under the EA.
  2. You will continue to receive product support. Software security fixes, patches, and updates are included in the perpetual license. Microsoft will continue to provide product support for those installed titles for the duration of the product lifecycle regardless of the status of your EA.
  3. Premier support services will expire. It is important to distinguish between product support and the premier support services included in your Microsoft EA. If your organization relies on these premier Microsoft environment support services, you should strongly consider renewing the agreement. However, there are other support service options available directly from Microsoft or Microsoft Partners that may fit the needs of your organization.
  4. Upgrade rights are available post-EA. Just because your EA expires does not mean you cannot upgrade to the next version of an enrolled product when your organization is ready. You retain the rights to upgrade to the next version so long as that version was released by Microsoft while the EA, or more specifically, the Software Assurance under the EA, was active.
  5. Virtualization rights expire. One of the key selling points for Microsoft is the desktop and server virtualization rights that accompany an EA. If your organization is leveraging virtualization to minimize support and deployment costs, it is important to understand the costs of losing these rights.

In addition to the IT analysis and strategy implications, the renewal process should include significant interaction with your legal department to help ensure entitlement reconciliations and renewal agreement negotiations adequately protect your organization from future Microsoft audits. It is not uncommon for the information sharing that occurs during a renewal to raise a red flag for Microsoft, so the entire process should be carefully managed and controlled. Whether you are still making the strategic decision with regard to renewal or are moving forward with the negotiation, we recommend engaging experienced counsel to help protect your rights, avoid situations that may trigger an audit, and obtain the best possible deal for your organization.