The Microsoft Enterprise Agreement renewal process can be a difficult time for many large organizations. The process generally begins with a count of software products, processor cores, and virtualizations. All of these elements are necessary for a thorough evaluation of an organization’s true-up obligations under the EA. Next up is the process of evaluating future needs in order to determine whether the perpetual use rights associated with the licenses purchased under the original EA will satisfy the organization’s needs moving forward. Finally, all of these activities must be conducted under the looming specter of the EA’s expiration date and the associated non-stop communications from the company’s Microsoft account representative.

However, to avoid making a hurried decision that could end up costing an organization hundreds of thousands of dollars in unneeded licenses, decision makers must understand: 1) the penalties, if any, associated with non-renewal; and 2) the actual date by which the decision must be made. It is important to understand that a decision not to renew does not instantly make an organization noncompliant. In fact, one of the biggest benefits to the EA, as opposed to the EAS (Enterprise Agreement Subscription), is the perpetual license grant that comes with most products. On the other hand, there is a significant penalty to Software Assurance users if they let the EA lapse – when the EA agreement expires, Microsoft typically requires its customers to purchase the Software Assurance along with another copy of the product license.

The good news, for most organizations just now coming off a three-year EA, is that Microsoft likely built a grace period into the original agreement by including a 30-day window from the expiration of the previous EA to renew with Software Assurance without being forced to re-buy the underlying product license. The bad news is that Microsoft removed this grace period provision for most EA’s signed after 2009. For these customers, the expiration date for those agreements really is the expiration date.

Microsoft customers should carefully read their EA to determine whether a grace period for Software Assurance is present or consult with an experienced attorney to assist with protecting legal rights when making this expensive decision on renewal.