As more large enterprises adopt Azure cloud, especially those that have traditionally used Microsoft tools, we have observed growing interested in Microsoft Azure Enterprise Agreements, commonly known as EAs. We thought it would be useful to understand more about Microsoft EA’s, how they work with Azure, and what they mean to both the enterprise and the ISV.
What is an Azure Enterprise Agreement?
While you can create an Enterprise Agreement with Microsoft specifically for Azure, most companies using this option already have an EA in place for use of their software assets like Windows, Office, Sharepoint, System Center, etc. If you have an EA for other products, then you can simply add Azure to that existing agreement by making an upfront monetary commitment. You can then use eligible Azure cloud services throughout the year to meet the commitment. And you can pay for additional usage beyond the commitment, at the same rates. So, like any Enterprise License Agreement (ELA), including AWS’s EDP, you are committing to a contract term and volume to gain additional discounts.
According to Microsoft, the Enterprise Agreement is designed for organizations that want to license software and cloud services for a minimum three-year period. The Enterprise Agreement offers built-in savings ranging from 15 percent to 45 percent based on committed spend – and given how these commitments typically work, it is likely that the more you buy, the better your discount. The minimum listed commitment for an EA is 500 more users or devices for commercial companies (250 for public sector), and they specifically state this minimum does not apply to Server and Cloud Enrollment, an offering aimed at companies with EAs in place to help them standardize on Microsoft server and cloud technologies.
As it turns out, the Azure Enterprise commitment minimum is very low. You are required to make an upfront monetary commitment for each of the three years of the agreement, with a minimum order value of one “Monetary Commitment SKU” of $100 per month ($1,200/year). This low commitment make sense: once an enterprise is on a cloud platform, it’s sticky – land and expand is the name of the game for Azure, AWS, and Google. They expect infrastructure to grow significantly beyond the minimum, and just need to get a foot in the door. And of course,the starting point on the cloud is supposed to be much cheaper and flexible than on prem infrastructure.
Benefits of an Azure Enterprise Agreement… Beyond Pricing
There are certain Azure-specific EA benefits besides just price to entice users to move off of Pay-As-You-Go. You can create and manage multiple Azure subscriptions with a single EA. You can also roll up and manage all your subscriptions, giving you an enterprise view of how many resource minutes you’re using per subscription. In addition, you can assign subscription burn to accounting departments and cost centers so you can more easily manage budgets and see spend at various roll up levels.
EAs give you access to certain features that you’d otherwise be required to purchase separately. For example, an Azure EA gives you the option to purchase Azure Active Directory Premium, which will give you access to multi-factor authentication, 99.99% guaranteed uptime, and other features. Pay-As-You-Go only gives you access to the free version of Azure AD.
Besides getting the best pricing and discounts, what are some of the other added benefit an EA might provide to an enterprise:.
- A common IT platform deployed across the organization.
- Minimal up-front costs and the ability to budget more effectively by locking in pricing and spreading payments over three years.
- Flexibility to choose from Microsoft cloud services, on-premises software, or a mix of both and migrate on your own terms.
- Simplified purchasing with predictable payments through a single agreement for cloud services and software.
- Managed licensing throughout the life of your agreement with the help of a Microsoft Certified Partner or a Microsoft representative.
Now, for vendors like ParkMyCloud, that need Azure pricing data to perform our service, how are we affected by the EA? Not adversely: the good news is that Microsoft makes EA pricing available through dedicated APIs and/or the Azure Price Sheet. We can match this information to a customer by using their Offer ID which defines their EA subscription and corresponding pricing (discounts).