Whether you are modernising infrastructure, migrating to the cloud, or negotiating with Microsoft, your contractual license agreement is what ultimately defines your rights, obligations and risks. Yet too often, key stakeholders do not fully understand the agreements they are signing – or the commercial levers available.

In this blog, we outline the six most common Microsoft licensing agreements our clients encounter. These frameworks define everything from how software is deployed to how  support is delivered, how much flexibility you retain, and what you pay long term.

1. Enterprise Agreements (EAs)

Best for: Organizations with predictable, large-scale software usage
Key risk: Overcommitment or underutilisation

Enterprise Agreements (EAs) are volume licensing contracts typically signed for three-years, with optional two-year extensions. They consolidate Microsoft products under one agreement with committed annual spend. EAs support customization via standard and amendments and have historically offered increasing discounts as volumes rise, along with price pools to reward higher usage. However, from November 1, 2025, Microsoft will remove these automatic volume-based discounts for online services under the EA, meaning all customers will default to Level A pricing regardless of scale.

While pricing can be attractive, EAs often result in over-licensing – especially when growth forecasts are overly optimistic or business needs shift.

What to watch:

• Misalignment with actual usage
• Limited flexibility to reduce below original commitment
• Renewal price increases

2. Enterprise Agreement Subscriptions (EAS)

Best for: Organizations with fluctuating software usage that prefer not to own licenses
Key risk: Higher long-term more cost and bundled Software Assurance (SA)

EAS is the subscription-based  Opex led variant of the Enterprise Agreement. It typically runs for three-year term, with the option to extend. Like the EA, it includes annual true ups, but also allows true down, although not below the committed Enterprise product baseline. From November 1, 2025, customers should note that the removal of volume discounts in the EA framework will also apply to the EAS, significantly affecting renewal costs.

What to watch:

• Overcommitting at the start of the agreement
• Rising renewal price
• Long-term budget predictability

3. Cloud Solution Provider Agreements (CSPs)

Best for: Smaller or agile organizations needing flexibility and lower upfront commitment
Key risk: Limited contractual controls and partner dependencies

CSP are monthly or annual subscription agreements for Microsoft’s cloud services, offered through partners. While they offer usage flexibility, there is no price pooling to apply volume discounts. With Microsoft now removing EA volume discounts for online services from November 1, 2025, this gap between EA and CSP pricing will narrow, potentially making CSPs a more viable option for some organizations depending on flexibility needs.

What to watch:

• Whether your partner is direct or indirect
• No access to SA
• Minimal ability to customize contract terms

4. Server & Cloud Enrolment (SCE)

Best for: Enterprise organizations with significant on premise or hybrid estates
Key risk: Requirement to license all installations across the estate

SCE is a specialist agreement under the EA framework that supports standardization of Microsoft server or cloud environments. It covers application servers, the Core Infrastructure Suite, and development platforms, (e.g. Visual Studio Enterprise unless otherwise approved).

To qualify, organizations must license all eligible installations across their entire estate, which sometimes requires re-licensing previously covered instances.

What to watch:

• Risk of over-licensing due to estate-wide requirements
• Exclusion of pre-owned licenses from count
• Azure-only SCEs are no longer available

5. Microsoft Products & Services Agreement (MPSA)

Best for: Organizations preferring a transactional purchasing model
Key risk: Limited optimization potential and no true ups

The MPSA replaced the retired Select Plus agreement and offers a flexible purchasing model across cloud, perpetual and PAYG licenses. SA is optional and must be added per order. Discounts are currently based on a point system but are also impacted by the November 1^st 2025 discount abolition by Microsoft for Online Services in line with the Enterprise Agreements.

While still active, MPSA is considered end-of-life for new customers, with Microsoft encouraging transitions to other models.

What to watch:

• Remember to add SA manually
• Maintain minimum points thresholds
• Plan for future transitions as MPSA is phased out

6. Service Provider License Agreement (SPLA)

Best for: Highly variable usage and hosted environments
Key risk: No price protection and increased compliance complexity

SPLA is Microsoft’s most flexible licensing model, allowing monthly fluctuations in usage. With the introduction of the Flexible Licensing Benefit, customers with eligible EA and SA licenses can apply these in SPLA environments, reducing costs, but increasing compliance oversight.

Under this shared responsibility model,  the customer must also manage compliance alongside the SPLA provider.

What to watch:

• No lock in pricing, costs can vary monthly
• Active monitoring required to avoid overspending
• Review periodically. If usage stabilises, anew model may be better

Final Thought: Contracts Are Strategy

Choosing the right agreement is rarely straightforward, especially in the current market. Microsoft has shifted incentives and contracting norms:

• LSPs no longer receive rebates on EA deals
• Smaller customers are being nudged toward CSPs under the MCA option
• Large clients are pushed onto the MCA-E, by bypassing their  LSPs entirely

You can download our Microsoft Agreement Cheat Sheet for a quick reference of the different contract types, their key risks and what to watch out for.

At ITAA we help organizations navigate this landscape. Our EA to MCA Transition Service supports those facing the end of an EA and unsure whether to adopt CSP, MCA or a hybrid model. We also offer renewal and negotiation support for any Microsoft agreement, providing clear independent advice based on real-world expertise.

If your Microsoft agreement is up for renewal – or just not delivering the value you expected – get in touch with ITAA.

Lucy Baker, Senior Microsoft Consultant

Lucy is a Senior Microsoft Licensing and IT Asset Management Consultant with extensive expertise in license risk and remediation, optimization, and audit defense. Known for delivering tailored, customer–focused solutions, Lucy specializes in Microsoft 365 optimization, contract negotiation and ITAM strategy, helping organizations navigate complex licensing environments with innovative thinking and precision.