Microsoft EA: 35% Below Market

Key points

• Microsoft opened renewal negotiations nine months before contract expiry, earlier than typical, presenting a proposal that represented a 24% increase over the expiring agreement.
• The bank's technology procurement team estimated the Microsoft stack represented approximately 31% of its total enterprise software spend.
• The bank used this data point to open a parallel discussion: resolution of the $4.2M true-up in exchange for a 3-year commitment at higher Azure consumption levels, a structure that benefited both parties.
• This replaced Microsoft's proposed 120,000-seat full deployment at list price, a change worth $43M in avoided commitment over the EA term.
• The signed EA totaled $51M over three years, versus Microsoft's initial proposal of $69M. Savings of $18M represent a 26% reduction from Microsoft's opening position.
• On a peer benchmark basis, the bank achieved pricing 35% below the median for comparable financial services institutions, placing it in the top decile of outcomes in ISVCOSELL's dataset for organizations of this size and complexity.
• The true-up resolution, completed concurrently with the renewal, removed a $4.2M contingent liability from the technology balance sheet without a cash outlay.
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