If you’re considering purchasing licenses or subscriptions from Microsoft, you might have come across their Cloud Solution Provider (CSP) program. Since its launch in 2015, the CSP program has steadily gained popularity, especially with the growing demand for cloud-based solutions, particularly hybrid ones. But what exactly is the CSP program, and how does it impact you and your organization as a consumer of Microsoft products?
At Softlanding, we have extensive experience dealing with Microsoft for many years and being a Microsoft Solutions partner. In this blog post, we’ll delve into the details of Microsoft’s CSP program: its definition, purpose, and the benefits it offers to its buyers.
What is the Microsoft CSP Program?
CSP, short for Cloud Solution Provider, is a licensing agreement that Microsoft introduced in 2015. Its primary purpose is to offer customers a more convenient and comprehensive way to procure Microsoft cloud services and software licenses directly from Microsoft partners. These partners often package these services with their own offerings, providing customers with tailored IT solutions that include licenses.
The CSP program encompasses various products and services, such as Microsoft 365 (formerly known as Office 365), Microsoft Azure, and a selection of server and desktop licenses. The main idea behind CSP is to enhance customer experience, creating a closer relationship between customers and Microsoft with the assistance of skilled partners.
In this model, the chosen partner takes care of managing the subscription on behalf of the customer. This grants the partner more control over the customer experience and billing processes. However, it also results in a single point of contact for the customer, streamlining their interactions for everything from licenses to support needs.
While CSP differs from traditional Microsoft licensing channels like Enterprise Agreement, Select, or Open Value, it still requires customers to sign a licensing agreement with Microsoft. The CSP partner facilitates this process, but notable differences exist between CSP and the traditional channels, including variations in operational methods, availability of Microsoft products and services, and differences in licensing terms and conditions.
Why Choose the CSP Program?
To understand why you might prefer the CSP program, let’s clarify the types of cloud services it covers:
- SaaS Product Licenses: This includes licenses for products like Microsoft 365, Dynamics 365, Enterprise Mobility Suite, or Power BI. These are typically purchased based on the number of users, known as seat-based services.
- Azure Infrastructure and Platform Services: This category involves services where you pay based on usage, referred to as usage-based services. Examples include Azure virtual machines, Azure Websites, or Azure SQL.
While the concept of these cloud services seems straightforward, the challenge arises when it comes to purchasing them. There are various models and programs available, making the process more complex than it seems at first glance. The CSP program aims to simplify this by offering a convenient and flexible way to acquire Microsoft’s cloud services through their authorized partners.
How to Determine if CSP is the Right Program for You?
Navigating the various programs for Microsoft cloud products can be challenging. To simplify and clarify your options, let’s provide a quick summary of the typical ways to purchase Microsoft cloud products.
- Pay as You Go: This is the most familiar option, where you can easily go to the Azure website, enter your credit card details, and get charged based on your usage or licenses purchased during the billing period. It offers flexibility and convenience. However, it might pose challenges in finding a suitable credit card and authorized personnel for its use.
- Enterprise Agreement (EA): The EA option is usually designed for larger organizations. It involves a dedicated agreement between your company and Microsoft, outlining specific licensing terms. It’s well-suited for big companies with substantial requirements.
- Cloud Service Provider (CSP): CSP, also known as your local partner delivering cloud services, offers a monthly subscription model. By choosing CSP, you gain access to personalized support and a range of benefits, ensuring a high level of service. Note that there are different tiers of CSPs with varying offerings; you can find more details about different models on Microsoft’s website.
Each pricing model has its benefits, and your decision should align with your organization’s size, requirements, and preferences. By understanding these options, you can make an informed choice that best suits your needs.
Here is a short summary of the features of each program:
|Pay-as-you-go||Cloud Solution Provider (CSP)||Enterprise Agreement (EA)|
|Commitment||No commitment required||Flexible: monthly, 1 year or 3 years||3-year agreement|
|Users||No minimum number of users||No minimum number of users||500 users minimum|
|Agreement||Microsoft Direct||Agreement with partner||Microsoft Direct or Partner-led|
|Billing||Monthly||Monthly or annual||Annual upfront billing for the full year|
|Decrease users||Anytime||Anytime||Once per year with 30 days’ notice. Must maintain 500 users minimum (support included)|
|Discounting||No discount. Highest cost for Microsoft Products.||Depends on partner. Partner has some flexibility to provide discounts.||Many incentive programs available to discount Azure costs dependent on monthly consumption.|
|Software Assurance||Not included||Not included||Included|
|Support||Direct Microsoft support||Support from your certified CSP provider||Basic support from Microsoft. |
Additional cost for Premier support.
|Product Availability||Focused on Cloud licenses: Microsoft 365, Enterprise Mobility Suite, Microsoft Dynamics, and Microsoft Azure||Focused mainly on Cloud licenses: Microsoft 365, Enterprise Mobility Suite, Microsoft Dynamics, and Microsoft Azure||All Microsoft products|
Migrating from Existing Services to CSP
Transitioning from existing services to a CSP (Cloud Solution Provider) model requires careful consideration based on your current agreements and their locations. Here are the steps and guidelines you need to follow for different scenarios:
Migrating from an Enterprise Agreement (EA) to CSP:
If you are moving from an EA to the CSP model, you must fulfill the terms of your original agreement. To proceed with the migration, you need to follow these steps:
- Select a CSP Direct bill partner: First, you’ll need to find a CSP Direct bill partner and request them to transfer your Azure subscriptions to the CSP model. To do this successfully, you’ll need to purchase an Azure plan.
- Accept the Microsoft Customer Agreement (MCA): You can only move to the CSP model if you agree to and accept the Microsoft Customer Agreement (MCA).
Migrating from any other location to CSP:
If you are transferring to CSP from a location other than EA, here are the guidelines you should adhere to:
- Work with a CSP partner: When moving to CSP, you must work with a CSP partner. Individual transfers without a CSP partner are not allowed.
- Verify Azure Resource Manager model compatibility: Ensure that your Azure resources can be moved from their current host subscriptions to their destination and that all subscription services use the Azure Resource Manager model. This verification is essential before starting the migration process.
- Obtain RBAC owner access: Ensure that the user account responsible for the transfer has RBAC (Role-Based Access Control) owner access. This access is necessary to handle the transfer and gain access to both the source and target subscriptions.
- Use the same Azure Active Directory tenant: The source and target CSP subscriptions must be housed in the same Azure Active Directory (AD) tenant. You cannot switch your Azure AD tenant for an Azure CSP subscription. Instead, you can only add or associate the subscriptions with your existing CSP Azure AD tenant.
By following these guidelines, you can successfully migrate your services to the CSP platform and take advantage of the benefits it offers.
How CSP Works?
- Partner Selection: The first step is to find an authorized Microsoft Cloud Solution Provider program partner that meets your requirements, delivers the services you need, and aligns well with your business.
- Microsoft Customer Agreement (MCA): Once you’ve chosen a CSP partner, they will provide you with a Microsoft Customer Agreement (MCA). Signing the MCA establishes a licensing relationship between your organization and Microsoft.
- Primary Point of Contact: Your selected CSP partner becomes your primary point of communication. Depending on their “partner tier,” they will offer billing and technical support directly if they are Tier 1 or “direct model” partners. If they are “indirect CSP partners,” support may be provided via their distributor. Microsoft itself does not handle billing or technical support for your organization.
- Services Management: Your Microsoft Cloud Solution Provider program partner takes on the responsibility of helping you manage your Microsoft Online Services portal. They will assist in procuring licenses, renewing subscriptions, and handling various aspects related to your Microsoft services.
By following these steps, you can efficiently engage with a Microsoft CSP partner and benefit from their services and support for your Microsoft cloud solutions.
Distinguishing Microsoft CSP Licensing from Others
Differentiating Microsoft CSP licensing from other programs, you may observe certain differences in terms and conditions. For instance, if you are accustomed to procuring licenses through a Microsoft Enterprise Agreement, you might encounter more stringent terms when dealing with comparable CSP licenses.
To illustrate further, Microsoft 365 E3 and E5 licenses offer reduced benefits compared to those under the Microsoft Enterprise Agreement. Notably, they do not allow installation on on-premises Exchange and SharePoint servers.
Another distinction lies in the deployment of Microsoft Windows Server and SQL Server licenses, which might be restricted from being used with hyper-scalers like Amazon AWS, Google Cloud (GCP), or Alibaba. However, Azure presents a unique avenue through Azure Hybrid Benefit. Moreover, starting from October 2022, these licenses may be transferable to other providers utilizing the Flexible Virtualization benefit.
It’s essential to note that CSP lacks Software Assurance, which means it does not provide SA benefits in the same manner. Although it does offer partial equivalent benefits for subscription licenses, it is crucial not to assume that all the Software Assurance rights are available in CSP.
What does a CSP subscription mean for you?
Here are the obligations, benefits, and advantages you can expect from a CSP subscription:
- Monthly Billing: With a CSP subscription, your bills will be issued every month. Your local CSP partner will provide you with a detailed invoice based on your service usage, in compliance with the relevant laws and regulations. Microsoft is not directly involved in this billing process, and you may not need to use credit cards for payment, depending on your CSP’s payment methods.
- Ongoing Support: Your local CSP partner will offer continuous support for your services. They will be your primary point of contact for any support calls, so you won’t have to worry about figuring out whom to reach out to in case of any issues or questions. This streamlined approach ensures you have a single, reliable source for all your support needs.
- No Upfront Payments: One of the advantages of a CSP subscription is that there are no upfront payments required. Instead, you will be billed based on your actual service usage after each billing period. This payment model may be more appealing compared to committing to annual seat licenses or opting for EA/Open Azure packages.
- Special Offers: As a CSP subscriber, you may have access to exclusive benefits and special discounts offered by your provider. Your CSP partner, being familiar with your specific environment and needs, might also be able to help optimize your costs further, ensuring you get the best value for your investment.
In summary, a CSP subscription provides you with the convenience of monthly billing, ongoing support from a dedicated local partner, a pay-as-you-go model without upfront payments, and the potential for special offers and cost optimizations. This flexibility and personalized service make the CSP model an attractive choice for many businesses.
When does it become advantageous to consider turning to CSP?
- When you have a strong and trusted relationship with the partner, having either worked together previously or collaborating on purchasing Microsoft Online services along with the partner’s offerings (products or services).
- If you aim to optimize your costs, CSP partners often provide attractive pricing offers that could lead to significant savings. Seeking advice from your supplier before making any purchasing decisions is recommended.
- If time is critical and you require prompt delivery of online and additional services to your team or organization. CSP offers the advantage of rapid negotiations and the ability to acquire partner services every month. This flexibility avoids the need for prolonged purchasing decision processes and eliminates the burden of long-term commitments.
- If your IT department is small, overwhelmed, or still acquiring cloud-related skills, the CSP model can be beneficial. The CSP provider can handle the provision and management of services, giving your IT team the necessary support and time to fully adopt, manage, and support the Microsoft cloud platform.
Choosing Softlanding as your CSP
Collaborating with an experienced and knowledgeable partner for Microsoft CSP is crucial due to the numerous factors to consider. If you’ve chosen Microsoft CSP over Microsoft EA, it’s time to start looking for the right CSP partner.
When searching for a Microsoft CSP partner, consider the following questions:
- Are you interested in a direct or indirect Microsoft partner?
- Does the partner provide 24/7 customer and technical support?
- Does the partner offer monitoring services to reduce risk and proactively optimize?
- Does the partner have a long-standing relationship with Microsoft?
- Does the partner offer value-added services beyond licensing?
Softlanding has been a Microsoft partner since its inception in 2000. This relationship allows us to empower organizations like yours to achieve greater flexibility, cost-effectiveness, and support with their Microsoft licensing agreements.
Do not hesitate to contact us if you would like to learn more.