Microsoft EA Contract Stack

Glossary of Documents in the EA contract

EA Contract Stack

What customers refer to as a Microsoft Enterprise Agreement (EA) is actually an interconnected stack of contracts and reference documents. The accompanying diagram shows the most important ones to review and (if possible) amend when negotiating an EA, with the text that follows explaining each in more detail.

The Microsoft Business and Services Agreement (MBSA)

The MBSA is an evergreen document (in effect until terminated by either party) that defines a customer’s business relationship with Microsoft. An MBSA does not oblige a customer to buy anything. However, it is a precondition for entering into an EA or other volume licensing agreement. Among other things, it specifies the rules of precedence among other documents in the contract stack, which types of business units (affiliates) a customer may include, privacy and confidentiality rules, remedies in case of contract breaches, and software license audit rules and procedures.

Enterprise Agreement (EA)

An EA contract records a collection of terms and conditions applicable across enrollments (explained below), such as license duration and rules for license reassignment and transfer. By itself, the EA does not obligate a customer to make any purchases and has no set termination date (it stays in effect until terminated by either party). Important points it covers include which product use rights apply to the agreement, and handling of mergers and acquisitions.

Amendment(s)

Amendments refer to changes made to the agreement after it has been signed. Either party can make these changes and are usually made to accommodate changes in the business environment or to add new products or services. Amendments can be made by adding new terms or modifying existing ones.

Enterprise Enrollment

What most customers consider as “the EA” is the Enterprise Enrollment, and its terms are the single most important part of any EA negotiation process. Also sometimes called a “desktop EA”, an Enterprise Enrollment is commonly used to buy client-side licenses and subscriptions for Windows, Microsoft 365 software and services, and on-premises server applications. The Enterprise Enrollment commits a customer to various purchase obligations, including the purchase of at least one product enterprise-wide, such as a Microsoft 365 enterprise suite. The Enterprise Enrollment also establishes purchase rules and processes, including the annual “True Up” in which the customer audits its systems and places orders for any licenses required to cover growth in the last 12 months. The enrollment also sets price levels, payment terms, affiliate inclusion, and any exceptions granted to product use rights. The term of the Enterprise Enrollment is usually three years: among other things, this means the customer will need to renegotiate any negotiated amendments at the end of this term.

Server and Cloud Enrollment (SCE)

The Server and Cloud enrollment is commonly used to buy server-side licenses and subscriptions for SQL Server, Windows Server, and System Center. Like Enterprise Enrollment, the Server and Cloud Enrollment commits the customer to buy some products enterprise-wide and establishes purchase rules and processes, including “True Up” requirements, price levels, payment terms, affiliate inclusion, and any use rights exceptions. Not every EA includes a Server and Cloud enrollment, because customers can also buy server-side licenses through an Enterprise Enrollment, but the Server and Cloud enrollment can offer superior unit prices for large commitments.

Product Selection Form

A Product Selection Form is a document associated with an enrollment. It lists the types of licenses that will be bought enterprisewide, along with initial purchase quantities and price levels. The resulting prices, including both standard and negotiated discounts, are recorded in a separate Customer Price Sheet for the enrollment.

Customer Price Sheet (CPS)

A CPS records prices an EA customer agrees to pay in an enrollment, including any standard and negotiated discounts. The CPS also records license quantities purchased at the start of the enrollment, as well as country of usage for the licenses. The CPS is typically one of the last documents to be finalized during an EA negotiation, is prone to mistakes, and warrants thorough review.

Program Signature Form

A Program Signature Form is the vehicle by which a customer “signs” legal documents related to most volume licensing programs. Customers do not sign the legal documents themselves, but rather a customer representative signs a Program Signature Form that lists one or more documents being signed, along with their unique identification codes. Every new “signature event” results in a new form, and by assembling all past Program Signature Forms, a customer can identify the documents the organization has signed, and when.

The following documents are not part of the EA contract stack, strictly speaking, but they are referenced by documents in that stack and contain important terms.

Product Terms

The Microsoft Product Terms is an online repository for rules governing product licenses acquired through volume licensing programs. The Product Terms defines each product’s license model, which among other things, defines a set of license types, which devices or users require them, how many are needed, and under what circumstances. It also lists components of suites (such as the Microsoft 365 enterprise suites), The Product Terms is updated monthly, but it is referenced by documents in the EA stack that have longer lifetimes. Consequently, EA documents generally should specify which month’s Product terms apply, so that terms do not change out from under the customer.

Online Service Terms (OST)

Online Services Terms (OST) is a repository for certain types of information specific to online service licenses acquired through volume licensing programs. Service Level Agreement (SLA) for Microsoft Online Services. The OST was merged into Product Terms in February 2021, so it no longer exists. However, it is still referenced in any EA contract signed in early 2021 or prior.

Service Level Agreement (SLA)

The SLA is the most important element of the Online Services Terms. It specifies financial remedies for online services downtime and other incidents, and procedures for claiming remedies after an incident. Customers who actively monitor downtime and have efficient processes for claims can save on service fees. The SLA is not updated on any regular schedule but usually updated two or more times a year. (based on last few years)

Data Protection Addendum (DPA)

The DPA defines privacy and confidentiality terms that will apply to an EA. Regulated customers will need to review it carefully: although it is rarely amended for individual customers, the DPA is revised roughly semi-annually, so customers must also review which version applies to their enrollments and EA. In some cases, amendments elsewhere in the EA stack could address shortcomings in the DPA. The DPA isn’t updated on a regular schedule, but historically, it is updated at least once annually.