How to negotiate a Microsoft audit settlement

Most organizations dread going into negotiations with Microsoft. Rightly so, Microsoft is a tech giant and has been in the business of negotiations for years with all the muscles it may need to succeed at it. But fear not whether you are a small or large organization. You first need to know and understand how to approach any negotiations with Microsoft.  

Signing up for any Microsoft products and services usage comes with terms and conditions that must be followed to the letter. As part of the terms and conditions your organization agrees to a periodic audit at the behest of Microsoft usually.   

The audit report at the end of the day will put out some recommendations or obligations to be met by your organization if found at fault. The report finding should not necessarily be accepted by your organization if you believe it is not accurate. There are a series of processes to undertake which involve adjustments to reflect the true situation until all parties can finalize the audit report and accept its findings.    

Audit negotiations are not a one-off event if you know what you are about as an organization. You may also seek the services of an experienced independent expert to guide and support you to a favorable conclusion. The audit settlement negotiations may go into a second or third round of discussions after the report findings have been accepted in order that your organization arrives at a favorable settlement.   

In this write up, we will look at what a Microsoft audit is, what may trigger an audit and how to settle an audit finding if it goes against your organization.    

What is a Microsoft audit?  

A Microsoft audit is an inspection process usually initiated by Microsoft to ensure that its software products are being used in compliance with licensing agreements and terms. This involves reviewing the use of Microsoft software within an organization, including any installations, licenses, and usage.    

What are the first steps leading to a Microsoft audit?   

Microsoft will first write to your organization stating its intention to audit the use of their products and services per the licenses purchased. In this letter, you should look out for what form the audit will take.   

Also look out for and make ready details of data on Microsoft licenses purchased, the number of users, devices and servers running in your organization. As an organization, after you are clear with what data is being requested for by Microsoft, look out for deadlines so you can appropriately respond and submit data on time.  

After all the above has been ticked, look out for contact information to the auditor selected by Microsoft to oversee the audit work in your organization and other steps required through the audit process. When the audit is completed successfully, a report or finding will be available to your organization, which will inform subsequent actions.  

How to negotiate a Microsoft audit settlement successfully?  

• Understand the audit process  

Seek a clear understanding of the entire process and what to expect. When the audit letter is sent to your organization, take time to read through the guidelines and what your role is as expected. Know what licenses or products are being audited within the scope of your agreement. Know that Microsoft is looking out for accurate reporting of software usage aside from compliance and other benchmarks agreed on.     

• Conduct an internal audit  

Now that you understand the audit process, it is important to conduct your own internal audit before the official audit begins. This will give you a better understanding of your current licensing situation and identify any potential compliance issues. It also allows you to address any discrepancies or issues before they are brought up by Microsoft. Conducting your own internal audit must be done even without an audit letter from Microsoft. Periodically, with the help of an independent Microsoft licensing expert, conduct these audits for your own knowledge on what your license position is as an organization.  

• Gather all necessary documentation  

Before entering negotiations, gather all relevant documentation related to your Microsoft products and licenses. This includes purchase agreements, invoices, and any other proof of ownership or usage. The information Microsoft will request includes but is not limited to purchase orders, product keys, and deployment records all in the hope of verifying compliance. There may be the request for a list of all installed software and its corresponding licenses. Microsoft may conduct on-site visits or use automated tools to gather usage information and you must be ready with this information prior to their visit.  

• Consider hiring the services of an independent expert  

Even after getting all the needed information about your licensing position as an organization, the accuracy and how to put this information together for the negotiation process is tricky. Negotiation with Microsoft has a language. You may have the information, but it may be used against you if you don’t know how to go about negotiating expertly. To avoid instances of being unsure about your compliance status, an independent Microsoft licensing expert will be of much help. Again, the entire audit process can be overwhelming, but a third eye can do your organization a lot of good. The independent expert also provides an unbiased assessment of your licensing situation and helps negotiate with Microsoft on your behalf.  

• Negotiate from a place of knowledge  

It is important to go into negotiations with a clear understanding of your usage and licensing rights. Use this knowledge to negotiate for a fair settlement that considers any over-licensing or under-licensing. By this time in the audit journey, make sure you have a firm grip on issues raised in the form of non-compliance with licensing agreements. This is one of the most common issues found during a Microsoft audit.   

Also make sure you have complete or accurate records of everything licensing in your organization. Not having this in place can lead to discrepancies between what is installed and recorded, causing potential compliance issues. When you are well equipped with this information, you can negotiate and ask for discounts with confidence.   

• Be open to compromise  

In any negotiation, it is important to be open to compromise and this does not exclude one involving Microsoft. Negotiations may not go your way in its entirety. Microsoft may request certain concessions in exchange for a lower settlement amount, and it is important to consider these options and their potential impact on your organization. Also, whiles deciding on what form and to what length you can compromise, always have in mind the priorities, needs, financial standing and goals of your organization.  

• Get everything in writing  

Once a settlement has been reached, make sure to get all agreements in writing. This will protect your organization from any legal issues moving forward. Every negotiated point agreed on should be well and clearly documented to allow for transparency.  

Let our independent Microsoft licensing experts support your audit settlement  

Negotiating a Microsoft audit settlement can be a complex process. An audit of your licensing position as an organization is not an event, rather it starts with how you take inventory after purchasing and using Microsoft products.   

Joggling between overseeing your daily activities and monitoring the licenses purchased, number of users in your organization can be stressful. Even if your IT team oversees this, they may periodically need external support to confirm if they are doing the right things. Our team of experts only deal with cloud and licensing related issues and nothing else hence are on top of this field. We can assist you at every turn when it comes to Microsoft cloud and licensing issues to help you save on cost.  

Even at the time of deciding to purchase licenses, we can assist you with options and alternatives that get the work done and save you substantially. There are pre-owned or used Microsoft software licenses that offer the same value as new ones but at a cheaper cost.  

Talk to us let’s start with carefully reviewing your licenses and carry out a self-auditing before Microsoft reaches out to you. Let’s prepare you and guide your license purchase and usage today. Contact us.