Skip the Microsoft EA Trap: Why Businesses Increase Negotiation Power by Separating Renewal Dates.

Anyone who’s ever attempted to reach—and sustain—the elusive Inbox Zero status on their email accounts will know that there are just some practices that sound amazing on paper…but which tank productivity in real life.

Similarly, Microsoft’s common practice of aligning the termination date for Enterprise Agreements (EAs) and Unified Support looks like common sense at first glance. However, in reality, binding these contracts together robs customers of the chance to negotiate terms in their favor.

Much like the appeal of following the purported daily routine of a top CEO to exact success from every aspect of your life, the use of simultaneously terminating contracts promises your most productive year yet but leaves you with underwhelming progress.

US Cloud can help you find a way to avoid the agreement trap. Read on for how we can help.

Linking agreements might seem efficient but limits negotiation power | PixieMe - stock.adobe.com

Ending contracts all at once has the appeal of a minimalist office aesthetic. Without personal touches and accommodations, it’s sleek and refined while still hinting at a productive future where goals are met. However, there might be a finer line than you think between extreme simplicity and penitentiary sparseness.

Sometimes regarded as “sweetheart deals,” coterminating contracts require EAs and contracts for Microsoft Unified Support to conclude at the same time. This forces customers to bundle both into their next renewal or risk losing service or a deal during the next Microsoft renewal cycle.

This strategic move is often encouraged in the name of convenience, allowing customers to address contract renewal all at once for licensing and support instead of making time to handle each one separately. For an enterprise that needs Microsoft products and some kind of correlated support to keep it running, that configuration sounds enticing.

In practice, though, this illusion of simplicity eliminates chances for the customer to negotiate contracts in their favor. This creates a trap that looks just fine on the outside but may feel prohibitive in practice.

Microsoft's trap: bundled contracts reduce negotiation power.

So far in this post, we’ve been mentioning that this setup for renewing contracts at the same time inhibits customer chances at a favorable negotiation. Here are reasons why aligned contract expiry dates do not work for all involved parties:

Damaged Negotiation Leverage

In this scenario, businesses lose the ability to independently negotiate better terms when it comes to licensing and support options. That’s because Microsoft gains the upper hand here by wielding the contracts as being dependent on one another. In other words, they might offer certain pricing by keeping the renewal dates bundled.

Limited Pricing Flexibility to Support IT Budgeting

Not only is the price of the contracts more rigid, aligning payments for both services at the same time can make for less manageable expenses as opposed to a more staggered approach.

Increased Vendor Lock-in

While simultaneous expiration dates benefit Microsoft by decreasing chances that customers will discover and have time to switch to third-party Microsoft Support alternatives, it decreases options for right-sized service.

Businesses struggling with this binding contract practice will find it hinders IT teams from discovering the support option that better suits their infrastructure. This leaves enterprises with fewer opportunities to escape escalating Unified Support costs.

Obligatory Unexpected Price Increases

Speaking of escalating Unified Support costs, Microsoft renewal season is an opportunity for bundle pricing changes to be implemented into new customer contracts. Historically, if Unified Support pricing upticks haven’t hit accounts in between renewals cycles, these will show up in the next iteration of Microsoft agreements. That just leaves businesses with no choice but to cover the difference.

It’s not the end of the line for your Microsoft negotiations if your contracts are up and it’s time to talk to Microsoft about licensing and support. For renewal cycles happening now and down the road, you have options. Here are four tips for helping you deflect the agreement trap this time:

1. Keep Enterprise Agreement and Support Contracts Separate
   Maintain your contract flexibility by renewing agreements at different times, even if you receive pressure to make it more convenient by aligning their expiration dates.

2. Explore Alternative Support Options
   Third-party Microsoft support options have the ability to scale support to your needs instead of pigeonholing you into an all-or-nothing deal. Be sure to give other alternatives a look before resigning yourself to more fruitless negotiations. You could be saving a significant amount of money on the quality support you need (Customers report 30-50% savings after switching to US Cloud).

3. Negotiate Proactively
   Enter negotiations armed with your true usage data and a request for proposal (RFP).

4. Call US Cloud
   US Cloud can help you break the cycle of EA traps.

Separating contract renewal dates increases negotiation leverage.

Just because your Microsoft contracts and agreements “conveniently” renew at the same time doesn’t mean they benefit your business. In reality, this contract configuration primarily benefits Microsoft.

You don’t have to fall for the agreement trap you see coming, though. You can take back control during your next round of negotiations.

Call our team today to find out more about how third-party Microsoft support gives your team the tools you need to negotiate Microsoft Enterprise Agreements and support contracts in your favor.

Four key steps to break free from the Agreement Trap.

Why does Microsoft push for coterminous contracts?

Microsoft likes to use simultaneously terminating contracts to maintain more control over the path of negotiations when renewal season comes around. It’s a long game that often works out in their favor because customers might be so entrenched in their Microsoft systems that they can’t risk losing the product or the support.

Enterprises in that situation typically relinquish their flexibility and ability to choose alternative options in order to secure a safety net through Microsoft. While this configuration may not be problematic for some teams, for other teams this contract model leaves them bound to accept price increases.

How does keeping Microsoft contracts separate help my business?

Ensuring that your Enterprise Agreement (EA) and your Microsoft Support agreement expire at different times will allow for better financial planning, improved negotiation leverage, and more freedom to evaluate alternative support options.

Even if you do not choose to use third-party Microsoft support, knowing other choices are available can give you more leverage to work with when it’s time to negotiate your contract.

Are there third-party support options for Microsoft Support?

Yes, and they are capable of providing better service at a lower cost. That includes US Cloud, where customers typically report a savings of 30-50% after switching from Microsoft Unified Support.