A true up demand letter is written to read as final, yet almost every figure in it rests on an assumption you are entitled to examine. Reading the letter correctly is the difference between paying the opening number and paying the defensible one.
When a true up figure arrives in formal language, on letterhead, with a quantity, a price, and a deadline, it carries an air of settlement. That tone is the point. A demand that looks final invites payment, and many organizations pay it precisely because it looks final. But a true up is a count, and a demand letter is one party's reading of that count. This article walks through the letter section by section, separates what is genuinely fixed from what is open, and shows where a measured response moves the number. For the figure behind the letter, start with how Microsoft sizes a true up.
What the letter is, and what it is not
A true up demand letter is Microsoft's statement of what it believes you owe for the growth in your use of licensed products over the agreement year. It is built from the data Microsoft holds, the assumptions it applies to that data, and the price levels in your agreement. It is a contractual instrument in the sense that the true up obligation is real and the deadline matters. It is not an adjudication. No neutral party has reviewed the count, and nothing in the letter has tested your evidence against Microsoft's. The letter is the opening position in a conversation, dressed as the closing one.
Reading the letter part by part
Most demand letters share the same anatomy. Knowing what each part is doing tells you where to focus.
The quantity
This is the count of net new use above your baseline, and it is where most of the recoverable money sits. The quantity is built from deployment and active use data, and it carries every assumption baked into that data: decommissioned servers still listed, software installed but unused, licenses reassigned and counted as new, products measured on the wrong metric. The quantity is the most negotiable part of the letter because it is the part most dependent on counting choices.
The product mapping
The letter maps your deployments to specific products and editions. A deployment mapped to a higher edition than the one running, or to a per core metric when a server plus client access license model applies, inflates the figure without any change in what you actually use. Confirming each mapping against the real deployment is routine and frequently productive.
The pricing
Price levels under an Enterprise Agreement are the most fixed element. The rates were negotiated when the agreement was signed, and a true up applies them. This is rarely where the argument is. Trying to relitigate price in a true up is usually effort spent in the wrong place. The leverage is in the quantity and the mapping, not the rate.
The deadline
The letter states a date. The date is real and ignoring it carries consequences, but a deadline is not the same as a settled figure. Responding by the deadline with a corrected count is entirely different from missing the deadline. A common and avoidable error is treating the deadline as a reason to pay rather than a reason to respond. The right move is to respond on time with evidence, not to pay on time without it.
| Part of the letter | How fixed | Where it moves |
|---|---|---|
| Quantity | Open | Recount against real deployment and use |
| Product mapping | Open | Confirm edition and metric per product |
| Pricing | Largely fixed | Agreed rates, rarely the battleground |
| Deadline | Fixed date | Respond by it, do not pay because of it |
Indicative framing. The exact terms depend on your agreement and the products in scope.
The pressure built into the language
Demand letters use tone as leverage. Words like final, due, and required signal that the matter is closed. Often a letter implies that questioning the figure will sour the relationship or complicate the next renewal. None of that changes the underlying fact that the quantity is a count you can recount. A calm, evidenced response does not damage a commercial relationship. It is the normal conduct of a customer who manages its agreement carefully, and account teams deal with it routinely. The pressure works only on organizations that read the tone as a verdict.
How a measured response is built
Responding well is methodical, not adversarial. The sequence is consistent across cases.
- Acknowledge the letter and the deadline so nothing is treated as ignored
- Recount the estate from current evidence rather than accepting the stated quantity
- Clear the false positives, the decommissioned, unused, and reassigned items that inflate the count
- Confirm each product mapping and metric against the actual deployment
- Assemble the evidence for every adjustment so each correction can be shown, not merely asserted
- Submit the corrected position by the deadline with the supporting documentation attached
This is the same recount discipline covered in reducing the true up before you submit, applied after a demand rather than before one. The difference is only timing. The method is identical: count accurately, document the basis, and put a defensible figure in front of Microsoft instead of accepting the opening one.
When the true up sits next to something larger
A true up demand sometimes arrives in the same period as a renewal, a self verification, or signs of a formal review. When it does, the figure is no longer just an annual count. It becomes a number that interacts with a wider negotiation, and the way you respond to the letter can shape the larger conversation. This is the point where independent help earns its place, because the right response depends on the full picture rather than the letter alone. For how a true up differs from a backward looking review, see how an audit differs from a true up.
The next step
A true up demand letter is an opening position written to look like a closing one. Read part by part, most of its figure rests on counting assumptions you can test, and a response that recounts from evidence by the deadline is the path to the defensible number. The full method for managing the annual demand and any review that follows sits in our pillar, the Microsoft Audit Survival Guide. If a demand letter is in front of you now and a renewal or review is anywhere near it, the response is worth getting right the first time. Book a strategy call below and we will read the letter with you.
When the numbers start to look serious, our EA true up defense team verifies the numbers before they become contractual.
A demand letter is an opening position. Treat it like one.
Book a strategy call and we will read your true up demand letter part by part and map where the figure moves.
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