CIO Chronicles: Challenging Our Microsoft Renewal

“I wish we had internal data to challenge Microsoft’s numbers instead of relying on their narrative.”

That thought echoed in my mind as I stared at the EA renewal proposal sitting on my desk. More accurately, lurking like a wolf in sheep’s clothing. It wasn’t just the numbers that bothered me. It was the fact that I couldn’t confidently tell my executive team whether they were accurate… or inflated.

I’m Ethan Keller, CIO of VirelliTech, a global industrial automation firm with just over 12,000 employees. We’re a company known for engineering precision and operational efficiency—but when it comes to software licensing, especially Microsoft, our house has been… less than in order.

The Internal Reckoning
A few weeks ago, I pulled together my IT ops director, our procurement lead, and a couple of folks from finance to ask one simple question:
“Do we actually know how many Microsoft licenses we’re using — and how many we actually need?”

Silence. Then the usual dance:

Procurement shrugged: “We go by what Microsoft tells us.”
Finance asked: “Isn’t that in the SAM tool?”
IT said: “Which SAM tool are we talking about? We’ve got ServiceNow, but it’s not fully implemented.”
And everyone turned toward my SAM lead… who left the company six months ago and hadn’t been replaced.

That’s when the reality hit me.
We had fragments of data — procurement records here, spreadsheets there, telemetry that may or may not be tied to active users — but nothing coherent. And yet, Microsoft was asking us to sign off on a 3-year agreement with a 22% cost increase and only vague assurances about “value realization.”

Microsoft’s Narrative Is Always Ready
Microsoft doesn’t wait for you to get your house in order. Their EA renewal account team came prepared. PowerPoints, charts, “business value assessments,” and usage stats that—let’s be honest—made us look underlicensed, underutilized, and underinformed.
But here’s the kicker: I knew some of their claims didn’t line up with reality.
For instance, they said Teams usage was “skyrocketing” across the company, but I’ve had two senior managers tell me their divisions still use Slack and WebEx. They claimed our Defender deployment was near-complete. It wasn’t. We were piloting it in just one region. So I sat there, stuck between a vendor who had all the leverage—and an internal team that couldn’t give me a clean, confident alternative narrative.

Enter MetrixData 360
That’s when our CFO — who had worked with MetrixData 360 at her previous company — pulled me aside and said: “You don’t have to do this alone. Get someone in the room who can tell our story — backed by our data.We brought in the MetrixData 360 team that same week.

They didn’t start with Microsoft. They started with us. They dug into our Active Directory data, matched it with usage telemetry, crawled our CMDB, reviewed our contracts, and helped us map out an actual license inventory. Within a month, we had a complete, validated picture of what we had, what we were using, and what we truly needed.

They identified over 1,300 E5 licenses that could be downgraded. We were double-counting SQL Server entitlements. And our supposed “under-deployment” of Defender? It was already deployed across three regions—just not reporting correctly in Microsoft’s dashboards.

The Power Shift
For the first time, we walked into the negotiation not with questions—but with answers. Our answers.
And when Microsoft’s team tried to steer the conversation with their usual assumptions, we didn’t push back emotionally. We pushed back with evidence.
I felt like a CIO again—not a customer trying to catch up to a vendor’s story.

The Lesson
We talk a lot about digital transformation and owning your tech stack — but no one tells you that if you don’t own your data, someone else will. In this case, Microsoft was more than happy to tell our story for us — until MetrixData 360 helped us tell it better.

I still think about that moment in my office:
“I wish we had internal data to challenge Microsoft’s numbers.”
Now, we do. And I’ll never go into another renewal without it. You shouldn’t either.

Renew your Microsoft EA Agreement With Confidence and Precise Data. Let’s Connect Today.

Microsoft Licensing and Contract Renewals in 2025

If you missed our recent learning session where Mike Austin shared insights on managing Microsoft EA renewals, you can still watch it here on demand. In this article, we provide highlights from this session to help you implement proven strategies for managing Microsoft contract renewals, reducing costs, and ensuring compliance.

Navigating Microsoft’s Complex Licensing and Cost Management

Microsoft’s licensing structures are inherently complex, encompassing numerous programs, license types, and bundles. A lack of transparency in pricing models compounds this complexity. For example, distinguishing between the Enterprise Agreement (EA) and the Cloud Solution Provider (CSP) program is not always straightforward, which can hinder informed decision-making. Adding to this, Microsoft’s recent strategy to transition smaller organizations into the CSP program introduces additional challenges. This shift aligns with Microsoft’s efforts to manage rising costs and renewals, illustrated by the upcoming 10% price increase for Windows Server in 2025.

To navigate these challenges, organizations must adopt a proactive and strategic approach to managing Microsoft renewals. Key steps include initiating renewal discussions at least 12 months in advance and maintaining active oversight of agreements throughout the contract lifecycle.

Mapping actual usage data is vital to uncover savings opportunities. For instance, analyzing Microsoft 365 E5 licenses often reveals that many users do not require the full suite of features. By downgrading to more suitable license types, organizations can realize significant cost savings. One of our clients, a large utility company, achieved an annual savings of $1.2 million by transitioning non-essential users to lower-tier licenses.

Alternatives to Microsoft’s Upsell Tactics

Organizations should critically evaluate Microsoft’s upsell strategies and explore cost-effective alternatives. This may include transitioning from E5 to E3 licenses or reverting from Microsoft 365 to Office 365, depending on specific requirements. Conducting a detailed evaluation of your security stack and considering competitive products can also yield substantial savings.

Developing a negotiation roadmap at least nine months before renewal is crucial. This roadmap should identify potential cost levers, such as Azure credits, support discounts, or license downgrades. For example, negotiating Azure agreements with tiered spending commitments can unlock incremental discounts, leading to meaningful cost reductions.

Adapting to Microsoft’s Reseller Model Changes

Microsoft’s recent changes to its reseller model have shifted more responsibilities to customers. By transitioning their top 20% of customers to a direct model and reducing Licensing Solution Providers (LSPs) fees, organizations now face tasks traditionally managed by LSPs, such as reporting and purchasing. Understanding the differences between LSPs and CSPs and the services they offer is critical to making informed decisions and ensuring all necessary support structures are in place.

Aligning with Microsoft’s Strategic Priorities

To optimize costs, organizations should align their strategies with Microsoft’s current product priorities. Products like Copilot, Power Platform, and Microsoft 365 E5/E3 are strategic focus areas for Microsoft, often accompanied by discounts and incentives. Conversely, securing discounts on products like Windows and SQL Servers is increasingly difficult unless the deals are substantial. Aligning your organizational needs with Microsoft’s goals can improve your negotiation position.

Moving Beyond Unit Price Negotiations

Relying solely on unit price negotiations is no longer effective. As Microsoft reduces discounting flexibility and raises prices, alternative cost-saving measures must be prioritized. Key strategies include optimizing license assignments, implementing archival practices, and eliminating unused licenses. For instance, regularly auditing licenses can prevent costs associated with blocked accounts or inactive users.

Communication and Planning: Keys to Success

Open and early communication with Microsoft is critical. Engaging in frequent discussions about your organizational needs ensures better alignment with Microsoft’s strategic goals and minimizes surprises. Building strong business cases and conducting pilots for new solutions, like Power Apps, can secure internal buy-in and ensure smooth implementation.

Proper planning and monitoring are essential to avoid pitfalls, such as poor adoption. One client struggled to transition from Zoom to Teams due to inadequate training and user engagement, leading to missed opportunities for savings and efficiency.

The Path to Optimized Renewals

To effectively manage Microsoft renewals, organizations need a comprehensive, proactive strategy that includes:

  • Understanding Microsoft’s licensing structures.
  • Initiating renewal discussions early (12+ months in advance).
  • Mapping actual usage data to uncover savings.
  • Exploring alternatives to Microsoft’s upsell tactics.
  • Building a robust negotiation roadmap.

Leveraging tools like SLIM 360 (MetrixData 360’s Microsoft license and cost optimization platform) can further optimize license usage by identifying opportunities for reclamation and cost savings. By implementing these strategies, your organization can reduce costs, ensure compliance, and confidently navigate the complexities of software asset management.