📢 Microsoft’s Strategic Shift: Moving Mid‑Market Organisations from EA to CSP...and..How a Licensing Audit Unlocks Savings

📌 TL;DR

• Microsoft is prioritising CSP for many mid‑market customers, with partners widely reporting fewer EA renewals under ~2,400 seats. CSP also now supports three‑year terms for continuity.
• Moving without a licensing audit risks over‑ or under‑licensing, missed incentives and compliance exposure.
• Velocity Technology Group (VTG), a Microsoft Solutions Partner and CSP, delivers a data‑driven audit → optimised CSP licensing → zero‑disruption migration → ongoing optimisation.

📈 Microsoft’s strategic move: EA out, CSP in!

For years, Microsoft’s Enterprise Agreement (EA) was the default for larger estates. That centre of gravity has shifted. Across the partner ecosystem, Microsoft is emphasising CSP as the hero motion for SMB and mid‑market, aligning to cloud‑first adoption, AI acceleration and partner‑delivered value.

In support of this, Microsoft introduced three‑year subscription terms in CSP (for Microsoft 365 E3/E5, with or without Teams, and Teams Enterprise) from 01/06/2025, helping customers transition from multi‑year EAs without losing price stability.

What this means for you: if you’re under ~2,400 seats, you may find EA renewals less available or less attractive, with CSP (or Microsoft Customer Agreement variants) recommended by many advisors as the modern route for licensing flexibility and operational simplicity.

☁️ Why CSP is compelling for mid‑market organisations

Operational advantages vs EA:

• Flexibility & agility: Add/remove seats more frequently (e.g., monthly) rather than annual true‑ups and three‑year lock‑ins.
• Simplified budgeting: Predictable monthly billing aligns licence costs with actual headcount and usage.
• Partner‑led support: Your CSP partner provides billing, provisioning, incident support and usage optimisation — a single point of accountability.
• Continuity options: 3‑year CSP terms (from 01/06/2025) allow longer‑term price stability similar to EA, including with or without Teams.

When EA can still make sense: very large, stable estates with specific on‑premises needs or complex enterprise negotiations may still see value in EA constructs and unified support models.

⚠️ The hidden risk of moving to CSP without an audit

Switching channels without assessing your current effective licence position can lock in unnecessary cost or create compliance gaps.

• Over‑licensing: Dormant accounts, premium SKUs unused by many roles, or duplicate capabilities across Microsoft and third‑party tools.
• Under‑licensing: Entitlement shortfalls that create audit exposure.
• Missed promotions/bundles: Overlooking CSP‑specific incentives or the new multi‑year options that reduce price volatility.

💡 Why a pre‑CSP licensing audit pays for itself

A well‑run audit gives you a quantified business case and a clean, compliant starting point in CSP.

1. Material cost reduction
   Right‑sizing licences and de‑duplicating overlapping tools typically yields 15–30% savings which can be redeployed into security or AI adoption.

2. Audit‑ready compliance
   Establish a clean Effective Licence Position (ELP) before you change contract motion; reduce the chance of rework or penalties later.

3. Future‑proof architecture
   Map roles to SKU tiers (E1/Business, E3, E5), validate security add‑ons, and ensure alignment with Copilot readiness, data governance and identity controls.

4. Smoother migration
   Use Microsoft’s channel transfer capabilities or manual path to preserve tenant identity and services while moving to CSP, with VTG coordinating timing, entitlements and any SKU substitutions.

🧩 EA vs CSP: a nuanced comparison for decision‑makers

🛡️ Compliance and audit readiness: don’t leave it to chance

Microsoft’s compliance checks are no longer ‘gotcha’‑driven by account teams; they are often triggered by data‑driven anomaly detection. Entering CSP with a messy entitlement picture invites avoidable risk. A pre‑move ELP, with documented assumptions and reconciled proofs of entitlement, shortens any future review dramatically.

Let’s say you have 1,200 users on mixed E3/E5 with add‑ons. Discovery shows:

• 8% dormant accounts;
• 20% on E5 who only need E3 + targeted security;
• Overlap with third‑party email security and DLP.

After right‑sizing:

• Net licence reduction: 10–14%;
• SKU mix optimisation: shift ~15% of seats from E5 to E3 + add‑ons;
• Third‑party rationalisation: consolidate 1–2 tools.

Indicative savings: £120k–£220k per annum (≈ 10–18%) plus soft benefits (simplified stack, fewer vendors). Results vary by environment, but 15–30% is a realistic benchmark seen in many transitions when optimisation is done properly.
Sources: US Signal; Block 64

📝 Pre‑move checklist

• Stakeholders aligned: IT, Security, Finance, Procurement, HR.
• Inventory complete: Users, devices, shared/seasonal profiles, third‑party tools.
• Usage insights: Workload adoption (EXO, SPO, Teams, Defender, Intune).
• Security posture: MFA/Conditional Access, device compliance, data loss controls.
• Contracting plan: Monthly vs annual vs 3‑year CSP, promotions, cancellation terms.
• Migration path: Channel transfer eligibility, tenant considerations, sequencing.

Sources: Microsoft Learn (CSP transitions & overview)

🏆 Why Velocity Technology Group (VTG)?

• Microsoft Solutions Partner & CSP: Verified capability across modern work and security; we own the end‑to‑end lifecycle.
• Commercial + technical: We blend contract know‑how with architecture, identity and security expertise.
• Measured outcomes: We build a quantified ROI in $, then we deliver it and keep iterating every quarter.

📞 Ready to make the move?

Microsoft’s EA→CSP transition continues to gather pace. Enter CSP on your terms: optimised, compliant and future‑ready.

Book a Microsoft Licensing Audit with VTG to quantify savings and design your CSP plan.

• Visit www.thevtg.com
• Or contact us to schedule your 30‑minute discovery call.