Choice is critical in business, but sometimes it’s difficult to determine the best decision for your specific organization. Such is the case when it comes to contracting services for Azure and your other Microsoft cloud applications. For many years, the best choice for larger organizations was signing up for an Enterprise Agreement (EA) directly with Microsoft. However, now there is a new option called Cloud Service Provider (CSP), a contract you can purchase from a certified Microsoft partner like Interlink.
Both offer similar services and similar pricing. There are advantages and disadvantages to both depending on your size and type of business. So, how do you decide what’s the right choice for your organization? Below is a look at the two options in several key areas.
An EA is a three-year agreement and requires a minimum of 500 licenses to be purchased at the same time. The most frequently purchased licensing options are Office 365 plans - any combination of the E1, E3, and E5 licenses would count. Customers pay upfront for the entire year at one time, which is unexpected for a subscription service and can make cash flow tough. Any user licenses added during the year would be paid on the next anniversary, which can also make cross charging quantities difficult. Quantities on the EA can go up during the year but can only come down by providing a notice 30 days prior to the anniversary. If a company divested a division in the first month after their anniversary, they may have to pay for unused licenses for 11 months.
CSP licensing is based on a month-to-month commitment, which can be attractive for businesses in volatile markets with inevitable ebbs and flows or businesses that have seasonality. It is also beneficial for organizations who find it difficult to predict longer-term usage requirements or those who may want to start with a basic plan as they move to Office 365 (like email only) and then increase the licensing level as users adopt the functionality.
In general, larger organizations with 500+ users are frequently be better off with an EA. For smaller organizations, a CSP might be the best alternative. However, each business will have unique needs to be considered.
When choosing between cloud solution providers, there are a lot of factors to consider when deciding on the best partner for your organization. So why Interlink?
For many organizations, the end of their Microsoft EA in coming up this June. With the deadline approaching, are you considering renewing your EA or switching over to CSP? This is something to think about over the next few months. There have been some recent changes to the EA that may impact your decision – some SMB customers may have to choose, or will be forced to choose, an alternate licensing program like CSP. Now is a good time to look at your current agreement, the changes to the EA requirements and compare the benefits of CSP vs. EA for your organization. This process can be challenging to navigate, but Interlink is available as a resource to provide guidance or additional information to help with decision making.
If you’re debating between CSP and EA, contact us to discuss your options and help determine the right option for your business.
Interested in learning more? View our similar blog: On-Demand Webinar | Demystifying Microsoft Cloud Licensing.