Calculating True-Up Prices

Enterprise Agreements (EAs) are based on the number of personal computing devices with a full client OS in an organization (that is, desktop PCs and portable PCs, including Tablet PCs and Macintoshes). Each year that number is checked, and if PCs have been added since the last check, the organization sends Microsoft a one-time “true-up” payment for each new PC.

When calculating true-up payments, the customer pays the same for product licenses regardless of when the software is purchased during the term of the EA, but the cost of Software Assurance upgrade rights for the product (upgrades are always included with EA licenses) varies with the number of years remaining in the EA.

The basic principle is that a customer who adds a new device six months before an EA ends is purchasing upgrade rights for only a short period of time, and the upgrade fee is correspondingly low. In contrast, a new PC purchased near the beginning of a three-year EA comes with a longer period of upgrade rights, and the upgrade portion of the true up is correspondingly higher.