Microsoft’s Cloud Solution Provider program supports businesses’ ever-changing licensing needs.
The Enterprise Agreement (EA) is the legacy licensing agreement used by many organizations and has been a long-preferred agreement for customers who could meet the minimum requirements. Microsoft launched the Cloud Solution Provider (CSP) program to offer flexibility in how organizations purchase licensing. When we look at some of the differences between CSP and the EA, there are a few that jump out.
For organizations with less than 500 users, CSP is your best option for licensing your Microsoft Cloud Services. With the minimum being just one user, organizations can start an agreement with little upfront investment and move at their own pace to add licenses as they are ready to move them to the Cloud, especially if they are migrating to the Cloud for the first time. The EA usually made the most sense for larger companies, but organizations with more than 500 users should also consider CSP for the potential of better pricing and support.
There have been changes to the CSP program as Microsoft introduced its New Commerce Experience (NCE) in early 2022.
- The best pricing for CSP now requires a one-year commitment. Unlike the EA, you can still opt to be billed monthly with an annual commitment to ease your cash flow.
- A month-to-month commitment is available with a 20% markup over the one-year option for the flexibility to reduce user counts at end of one-month term.
- Subscriptions can only be cancelled within 7 days after purchasing (responsible for prorated amount until cancellation). No cancellation after 7 days.
It’s important to note that annual and monthly commitments can be combined. For example, let’s say you routinely hire 50 summer interns and they will require M365 E3 licenses. You can choose a month-to-month commitment for those users while choosing an annual commitment for the rest of your users. Even with the 20% markup for month-to-month licenses, you will save money purchasing 50 M365 E3s for 3 months vs. paying the lower monthly cost for 12 months.
Selecting a CSP Partner
There are many companies who can resell CSP licensing; however, it is important to understand the value of each company’s offering and what you are getting with your purchase. Microsoft empowers the CSP to set the price and build an offering, but the guidance is vague, so offerings can vary greatly from CSP to CSP. We've compiled a list of key questions to ask a CSP.
Interlink is a Direct Partner with Microsoft. We are one of a small subset of all Microsoft Partners who transact directly with Microsoft instead of through a third-party distributor. This helps ensure the best possible costing and support outcomes for our clients.