MCA vs EA: What’s the difference and why it matters

Choosing the right Microsoft licensing agreement is a critical decision for any organization. It impacts your flexibility, compliance responsibilities, renewal strategy, and how you manage licensing across affiliates, cloud services, and perpetual software.

Over the past few years, Microsoft has worked on a plan to move away from the Enterprise Agreement. Over the past months, it has become clear that they are increasingly shifting focus toward the Microsoft Customer Agreement (MCA), a newer, more flexible contract model designed to replace the Enterprise Agreement (EA) for many customers. But that flexibility comes with trade-offs.

But what’s the actual difference between the two? And which one should your organization choose?

Let’s explore some of the key differences in this Microsoft EA vs MCA comparison and why it’s worth understanding them before your next Microsoft renewal or cloud commitment.

Tip 1. Contract Structure: Simplicity vs. Control

One of the most noticeable distinctions between the MCA and the EA lies in how each agreement is structured.

• MCA: A simplified, modular contract that covers all orders placed under it. It doesn’t require additional enrollments or signatures per transaction, making it quicker to manage, especially for cloud subscriptions like Microsoft 365 and Azure.
• EA: A more complex, layered agreement built on a Microsoft Business and Services Agreement (MBSA), paired with Enterprise Enrollments. This structure is more rigid, but can offer benefits for organizations that prefer predictability and central control.

The takeaway: The MCA is easier to adopt and manage. The EA requires more administrative work but may offer advantages in large-scale or centralized IT environments.

Tip 2. Licensing Terms: Renewals, Buy-Outs, and Subscriptions

Both agreements support a mix of subscription-based and perpetual licensing, but the rules around renewals and license duration vary.

• Under the MCA, subscription licenses expire unless renewed, and perpetual licenses remain valid once fully paid. At the time of writing, Software Assurance doesn’t seem to be a thing yet.
• The EA includes more structured renewal processes, has mandatory Software Assurance for perpetual licenses and has a “rental” option where you don’t buy the licenses, but pay a subscription fee. Many of these items that make the EA interesting might disappear. Additionally, also note Step-up licenses, From SA licenses (already being phased out), Add-ons, and you name it. This was required to make the EA an interesting licensing program, but Microsoft says there are not needed in the new MCA-model.

This matters if you’re planning for long-term compliance, budgeting multi-year deployments, or managing hybrid licensing models across cloud and on-premises environments.

Tip 3. Affiliate Licensing and Compliance Responsibilities

Organizations often license Microsoft products across multiple legal entities, which introduces another key difference.

• In the EA, each affiliate included under the enrollment is individually accountable for compliance.
• In the MCA, only the original customer signs the agreement and has enforcement rights, even if products are provisioned for affiliates.

This can affect both risk and control, especially in multinational organizations or group structures with distinct compliance teams.

Tip 4. Intellectual Property and Usage Restrictions

Both agreements contain clauses that limit how Microsoft products can be used, for example:

• You may not reverse engineer or bypass technical limitations.
• You can’t use non-Microsoft software in a way that could interfere with Microsoft’s IP protections.

However, the Enterprise Agreement typically contains more detailed language around IP and legal rights, which may be relevant for regulated industries, software development, or licensing audits.

Tip 5. License Transfers: What Happens During Mergers or Divestitures?

Organizations going through acquisitions, divestitures, or restructuring should pay close attention to transfer rules.

• The MCA allows the transfer of fully-paid perpetual licenses, but only under specific conditions (such as a merger or divestiture).
• The EA also permits license transfers, but requires Microsoft’s written approval through a License Transfer Form — adding another layer of process and documentation.

Tip 6. Eligibility and Pricing Models

Both agreements include eligibility checks — particularly for nonprofit, government, and academic pricing — but they handle it differently.

• The MCA consolidates eligibility into the main contract, making the process simpler.
• The EA handles this through enrollment-specific pricing tiers and minimum commitments, which can be harder to navigate without guidance.

Which Agreement Is Right for You?

• The Microsoft Customer Agreement (MCA) is designed for flexibility. It’s particularly suitable for cloud-first organizations, smaller enterprises, or those with rapidly changing needs.
• The Enterprise Agreement (EA) remains valuable for larger organizations that want structured commitments, long-term price predictability, and centralized control.

Your organization’s ideal choice depends on your size, IT strategy, governance model, and renewal objectives.