Software Asset Management Professionals

The Pros and Cons of Microsoft’s CSP: Is it Right for You?

Posted on September 11, 2020June 23, 2023 by Ben Tight

Microsoft’s Cloud Solution Provider Program has begun to build momentum in the software industry, and it may have caught your attention as an appealing option for Cloud deployment. If you are considering purchasing from Microsoft’s CSP program, it’s important that you weigh the pros and cons in order to carefully consider what is right for your business.

At MetrixData 360, we like to keep a finger on the pulse of the software industry, and, as such, we’ve noticed many of our customers are coming to us with questions about the CSP program and if it’s right for them.

In this article, we’ll go into the details of the CSP program and its benefits and drawbacks for potential customers.

What is Microsoft’s CSP Program?

The Cloud Solution Provider Program is a new way Microsoft intends to sell licenses and manage client’s accounts.

Instead of Microsoft selling licenses directly to their customers, they will be selling their licenses to Direct CSP Distributors, who in turn will either sell to Indirect CSP Resellers or to you, the customer. Indirect CSP Resellers will also sell directly to customers.

As a customer, you don’t have to interact with Microsoft and instead will merely have to manage the relationship with your Reseller and/or Distributor. Your Reseller or Distributor will handle relations with Microsoft and will represent you to Microsoft over any outstanding issues.

Your Reseller or Distributor will provide you with anything related to your customer experience, including negotiating exclusive discounts, customized bundles, support, maintenance etc.

Pros of the CSP Program

Monthly Payment Models

One of the main appeals that draws customers to the CSP is the month-to-month payment models that CSP offers.

This allows you to adjust for seasonal influxes of workers and customers alike. Not only is it easy to scale up, it is easy to scale down, which is not a feature found in Microsoft’s Enterprise Agreement (EA).

With the EA, while it was simple and almost expected for customers to add licenses to their final count at every true-up, it would be painful and almost impossible to remove any licenses, which often left customers feeling forced to buy more than they needed simply to maintain their EA level status and to keep Microsoft happy.

With the CSP, while there are other long term payment models available, there are no such restrictions that limit you to locking yourself in, and you are free to add and drop licenses from month-to-month as your needs dictate.

The billing that you receive is also supposed to be more detailed than that of the EA, allowing you to easily track your spending.

No Minimum Commitment

Microsoft’s EA required its customers to meet many rather tedious requirements in order to maintain their pricing level and the discounts that go along with it. These pricing levels are primarily dictated by the number of seats you need, and as of 2016, the minimum seats you need to qualify for the EA at all was raised from 250 to 500 seats.

This leaves a lot of mid-sized businesses in that 250-500 employee range in the lurch and looking for alternatives that will not force them to pay for licenses they don’t need.

This is where the CSP program comes in; with the CSP program, there are no minimum commitments you need to adhere to. This makes CSP ideal for mid-sized businesses and many former EA customers are expected to switch to the CSP for that very reason.

There is also no minimum length of time you need to stay in the CSP program. With the EA, you typically needed to sign up for a three-year agreement, and during that time you could easily add licenses but you couldn’t easily dip below your original agreement count.

With the CSP however, there is no minimum seat requirement and no length of time you have to commit to, giving you complete freedom in how long you stay and how much you use.

You Get to Work with Your CSP Partner

As an individual consumer, you might know the pain of trying to get Microsoft’s attention. As excellent as they are at selling products, they often have difficulty providing meaningful customer service to every one of their customers simply by the sheer size of their business.

You can often feel like you’re little more than a number to them, which is why the CSP partner program offers a more engaging and personalized experience. Since your CSP partner will be handling the relationship with Microsoft, you will only have to handle your relationship with your CSP partner, whose role in this chain is to provide you with an ideal customer experience.

This means that they will be offering you around the clock support, assistance in migrating to the Cloud, and customizable solutions hand-tailored to your organization’s requirements.

In order to stand out in the market, CSP partners will be eager to provide you with deals and enticing offers and will often be more willing to negotiate pricing and bundles compared to dealing directly with Microsoft.

It’s Where Microsoft is Clearly Pushing Their Clients Anyway

It’s clear that Microsoft has a vision and that’s one where their platform, products, and business exist exclusively on the Cloud. They’ve been quite aggressive in growing their Azure platform, which is now sitting second to only AWS in size and selection.

They also have begun steadily making their Enterprise Agreement less appealing to mid-size businesses and pushing their clients into other revenues, including Microsoft’s CSP. In 2016, they announced that the number of minimum seats required for companies to possess an EA would jump from 250 seats to 500.

In 2018, Microsoft also removed programmatic discounts offered to Level A customers with a seat count between 250-2,399 seats, significantly deteriorating the previously superior pricing of the EA compared to other volume license programs. At MetrixData 360, we think this deterioration of the EA will continue eventually even to the Level B customers. The reason for this is a bit multi-layered but essentially, what the EA provided for customers was direct access to Microsoft, they could negotiate custom-made deals and required a large quantity of Microsoft’s time and money supporting customer-service infrastructures. What the CSP does is it allows the CSP partners to present to their customer’s a more fixed, non-negotiable pricing while also giving the CSP partners the task of handling customer relations.

While you should always make your business decisions in accordance with the goals and priorities of your organization, it is important to note that Microsoft is visibly pushing away from the EA and into other avenues, including the CSP program.

Cons of CSP

It’s in the Cloud

It might be a little bit of a no brainer but the CSP program is a Cloud-only program, meaning it won’t offer products that are only available on-premises. This may be a roadblock to some organizations who require that their software and their data to remain on-prem.

For other products that are on-prem, such as servers, you will need a different license for them. With an exclusive Cloud platform comes Cloud-related problems,, including but not limited to:

Security Issues
Data Ownership
Lost connection leading to downtime
Difficult to track software assets in the Cloud, often leading to rampant spending

Some of the Partners are Newer than Others to the Cloud Business

It can be a rigorous process becoming a Direct CSP distributor, and you’ll need to meet the following requirements:

You need to prove that you are capable of providing around the clock technical support.
You need to pass a credit check in order to purchase Microsoft’s support plan.
You need to have a customer billing structure already in place.
You need to already have at least one managed service, IP service, or customer solution application.
You need to have at least one Microsoft Gold Productivity Competency.

However, to become an Indirect CSP Reseller doesn’t require nearly the same level of prerequisites, since they’ll get most of their infrastructure, such as their billing and their technical support, from their Direct Distributor. As such, you may find that smaller and newer resellers are not as well equipped to deal with your unique business demands as they arise.

Ready for the CSP Program?

With an uncertain future ahead of us, it can be understandable to be hesitant when picking a long-term IT solution for your business. Getting saddled with a platform that will prove to only be a weight around your neck to drag you down is hardly an ideal situation.

It is always best to examine the pros and cons to figure out if CSP is best suited to your company’s software environment.

At MetrixData 360, we are offering a unique solution to help you see if your software environment is ready to make the transition to CSP. Our SAM Compass Services offers you the ability to monitor your software environment to make sure you are only using what you need in order to keep your software spending as low as it can go.

Our solution offers our customers the ability to take control of their IT budget by providing them visibility into their usage and offering more streamlined licensing solutions, with the help of our team of experts on your side.

If you’d like more information on our SAM Compass Solution, you can check out our SAM Compass Service Page.

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What is CSP? A Deeper Look into Microsoft’s Cloud Service Provider Program

Posted on August 27, 2020June 9, 2024 by Ben Tight

If you’re in the market for purchasing licenses or subscriptions from Microsoft, you may have stumbled across Microsoft’s Cloud Solution Provider (CSP) program. But what is CSP?

Released in 2015, it’s been steadily growing in popularity, especially with the recent push for businesses to reside on the cloud, mainly in hybrid solutions. But what exactly is the CSP program and how does it affect you and your organization, as a consumer of Microsoft products?

At MetrixData 360, we’ve been going up against Microsoft for decades now, defending their customers against outrageous software audit claims, heated contract negotiations, and unnecessary software spending. We like to stay on top of Microsoft’s most recent developments, so in this blog post, we’ll go into detail about Microsoft’s CSP: what it is, why it exists, and what advantages it poses to its buyers.

What is the Microsoft CSP Program?

Microsoft’s Cloud Solution Provider (CSP) Program is a reseller program that is broken up into Direct CSP Distributors and Indirect CSP Resellers. These CSP partners will sell and support Cloud-based licenses for Office 365, Microsoft 365, and Azure, all on behalf of Microsoft with a margin of profit available to both Distributors and Resellers.

Distributors support (typically smaller) Resellers with the resources and service infrastructure they will need in order to provide support services to Cloud customers. In this way, Resellers and Distributors will be able to build and maintain a strong relationship with customers while in return customers will receive a full managed cloud solution.

The opportunity to be a part of the program as a Distributor or Reseller is open to all Microsoft’s partners regardless of their size or location with the two types of members (Direct and Indirect) bearing different responsibilities.

Want to know the difference between Indirect and Direct CSP partners and what Microsoft expects of them? We have an article discussing just that!

Why Does the CSP Program Exist?

The workplace is on its way to becoming Cloud-based with hybrid solutions, and nowhere is this more apparent in than in the three budding as-a-Service industries: Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS).

Of all these new industries, SaaS is becoming the most popular and for good reason; it offers a completely hands-off experience with the customers. The SaaS provider supports their customers by providing maintenance, hosting, and security.

Microsoft’s CSP program is their answer to the growing popularity of SaaS. However, the problem is that Microsoft doesn’t have the service infrastructure in place to support the dream of becoming a SaaS provider giant.

Instead, they’re outsourcing this task to partners, who will be able to provide better value to the Microsoft customer experience.

Buying from CSP Partners

There are a few ways Microsoft’s CSP program has altered the customer experience, so if you are thinking of buying from a CSP partner, consider the following:

It’s Only for Cloud Products

As the name would suggest, the CSP program only sells and deals with Cloud products. Of course, if you have on-prem licenses, your CSP partner will help you to transition into the Cloud.

Flexibility

One of the main appeals to customers when it comes to Microsoft’s CSP program is the ability to only pay for what you use and you will be billed on a month to month basis, no upfront payments or long-term commitments.

Unlike with the EA, which requires you to make bulk orders annually (meaning if you don’t use everything you’re paying for during the entire year before your next True-up, that’s wasted money), with CSP you can change quantity and types of licenses whenever you need to. This set up makes things immensely scalable and is great for customers with seasonal businesses.

Local Support

If you’ve ever tried to get Microsoft’s attention, especially if you’re a smaller company, you will understand the pains of feeling like Microsoft isn’t listening.

With the CSP program, your CSP partner’s job is to provide you with easily accessible service. They will act as your point of contact in the case of a problem.

Your CSP partner will also be able to bundle their offerings and offer discounts with more consideration into your business’s individual goals.

Licensing Support

Everyone who has ever had to deal with a Microsoft license before understands how complex they can be. In the past, understanding Microsoft licenses was a full-time profession.

However, moving to the Cloud has made Microsoft reconsider their hyper complex licensing a little, and now the CSP program offers the potential of your CSP partner to assist you in your Microsoft licensing to maximize the benefits of your investment.

Migrating from Existing Services to CSP

If purchasing the CSP platform has caught your attention, you might be wondering how you’ll be able to migrate from your existing service. The main factor to consider is what your current agreements entail and where they reside:

From an EA

If you are moving from your EA to the CSP model, you will need to fulfill the terms of your original arrangement, but if you want to move you will first need to get a CSP Direct bill partner to request your transfer to Azure subscriptions (you’ll need to purchase an Azure plan in order to transfer successfully). You’ll also only be allowed to move to the CSP model if you accept a Microsoft Customer Agreement (MCA).

Other

When transferring to CSP from any other location than the EA, you will have to adhere to a few guidelines in order to get the results you want:

You need to work with a CSP partner to create your Azure CSP subscriptions. No solo acts allowed.
Ensure that your Azure resources can move from their host subscriptions to its destination and that all subscription services use the Azure Resource Manager model. Make sure you check this before you begin the process.
You will need RBAC owner access on the user account that will be used to do the transfer, ensuring access to both subscriptions.
Make sure that the source and the target CSP subscriptions are housed in the same Azure Active Directory tenant. You can’t switch your Azure AD tenant for an Azure CSP subscription, you can only add or associate the subscriptions to your CSP Azure AD tenant.

Getting Started with Microsoft’s CSP Program

The world of technology is constantly evolving. With this new transition to the Cloud, it’s important that businesses everywhere learn to adapt to these changes for fear of being left behind.

Microsoft’s CSP program is an excellent source of purchasing these new cloud-based services but it’s important that you understand exactly what you are signing up for so that you can make informed decisions for your organization.

At MetrixData 360, we are happily helping our customers through this process of moving to the cloud platform. For information, you can check our cloud services page.

How to Move From an EA to CSP

Posted on July 31, 2020June 9, 2024 by Ben Tight

Preparing to Migrate to CSP

You’ve come to the conclusion that Microsoft’s Cloud Solution Provider (CSP) program is something that you’re on board with, and now it’s time to get your data packed and ready for the big move from the popular and traditional Enterprise Agreement (EA) to your CSP.Before you get excited about this transition, you’ll need to ensure this next step is a smooth one, or else you might find your software budget blown in unforeseen spending spikes.At MetrixData 360, we have helped many of our clients move effectively to new cloud platforms, and we’ve seen several elements all successful migrations have in common. Don’t forget to check out our CSP Switching course to if you’re looking to take a deeper dive into the nuances of moving your licensing into the CSP.

Preparation

Preparation is always key, especially when it comes to something like moving to your new CSP platform. You wouldn’t start building a house without a blueprint and a plan, and the same premise applies here.

Make sure you have a business plan; something that outlines the resources you’ll need. If you are signing up for Direct CSP, consider the following:

How much are you planning to sell and the marketing strategy you’ll be using to sell?
Consider if you can meet the requirements to first obtain and maintain your status as a Direct CSP partner. You will need to sell a minimum of 5,000 Microsoft 365 seats per year and will have at least one Microsoft Gold Productivity Competency.
Will you be able to provide top quality customer support and maintenance?
What sort of automatic billing system will you sign up for? It may be tempting to go with manual billing but you can easily lose control of this billing method as your business grows.

Signs It’s Time

One key element of switching from EA to CSP is timing, and there are some telling signs that you can rely on to indicate when it is a good time to move:

Your Size:

The best time to move is when your organization is still smaller than 500 users, since the EA requires a minimum 500 seats, so even if you have less than 500 employees, you’ll still be stuck paying for those extra seats. Moving to the CSP will ensure you only pay for what you’re going to use.
Your Support Calls to Microsoft Are Lacking:

Support is an important element in ensuring the health of your environment but if Microsoft’s 1-800 tech support number is providing you with little assistance besides the occasional ‘your call is important to us, please hold’, then leaving might be best for your company. In the CSP program, if you decide to become an Indirect CSP Reseller, your CSP Distributor will directly deal with your needs so you won’t be struggling to get Microsoft’s attention.
Your Business Sees Fluctuations:

Does your business have a trackable busy season? Do you hire seasonal workers and is the number of staff shifting up and down to meet the demand of the workload? Then it might be time to consider moving to CSP since the EA doesn’t provide nearly the same level of flexibility to accommodate these changes to your business. With the EA, you would simply be stuck paying for the maximum number of seats all year.

Indirect CSP or Direct CSP

There are two models of CSP that you can pick from: Direct and Indirect. It’s important you pick between the two models carefully, so that it can best serve your business’s needs.

Direct CSP:

A Direct CSP Partner means that you’ll purchase from Microsoft and sell to your customers. Becoming a Direct CSP Partner means meeting certain requirements. The whole onboarding process will take about 4 months.
Indirect CSP:

Overall a much faster way to purchase CSP, since you aren’t working directly with Microsoft. Instead, you’ll be purchasing your tools and platforms from your provider. This arrangement has many appealing benefits, including giving you access to the support of your Distributor and minimal expectations with major reward potential.

Picking Your Partner

If you’ve decided to work with a Direct CSP partner, your next step will be picking which Direct CSP provider is right for you. While each CSP partner will bring their own personal touch to their platform, here are some general topics of consideration when picking your CSP partner:

What is the size of the organization you’re considering?

Larger companies will often provide you with more options when it comes to the types of products and can prove more stable. They will also be better at getting Microsoft’s attention. However, smaller companies may be able to respond to your requests faster and may be more eager to keep your business.
How Future Proof is Your Provider?

Is the provider equipped to handle the latest and greatest technology or are they able to deal with older versions of certain products that your company and customers may still be running?
Is the Partner Willing to Hash Out Pre-sales Details like Design and Pricing?

Knowing that you can work with your partner to provide the service you or your customers need is a key component to a successful CSP.
What Support does the Provider Offer?

Good support is crucial to maintaining a positive relationship with your distributor and customers. Knowing that there is a working support system in place helps to provide confidence in your product and peace of mind during unforeseen issues and requests.

Your New Home on the Cloud Awaits!

It’s an exciting time, moving to the Cloud where you can shake off the restriction of the EA, but it’s important that you don’t make the move too hastily -- you don’t want to be stuck in a bad business arrangement that will only make you long for the days of your EA.

At MetrixData 360, we know how confusing this time can be. We have helped many of our clients transition to a Cloud Platform safely and at a low and reasonable cost.

Now that you’re prepared for the move, the next step is to find out if an Indirect or Direct CSP partnership with Microsoft is right for you, you can learn more by checking out our article: Direct vs. Indirect CSP: Which Plan is Right for You?

Direct vs. Indirect CSP: Which Plan is Right for You?

Posted on July 27, 2020June 9, 2024 by Ben Tight

With so many businesses partially, if not fully, running on the Cloud, Microsoft’s new Cloud Service Provider (CSP) Program is an enticing offer, even for Microsoft’s most loyal Enterprise Agreement customers. Microsoft offers two CSP options for Microsoft partners who want to get on board, Indirect and Direct. But which of the choices is right for you? Today we’re pitting the two head to head. It’s Direct vs. Indirect CSP.

At MetrixData 360, we want you to transition to your new CSP situation as smoothly as possible and have helped our clients adjust to this new life in the clouds. So today we thought we’d share some of the differences between each of the platforms to help you determine which best fits with your organization.

Direct vs. Indirect CSP

What is Indirect CSP?

With Indirect CSP, the requirements are simple: you will be a reseller of Microsoft products to customers while maintaining a relationship with your indirect provider or distributor. The provider, in turn, will deal with Microsoft.

It is likely to be the far more popular option, as Microsoft expects somewhere between 80% to 90% of its CSP subscribers to become Indirect Partners. Let’s take a look at some of the highlights of being an Indirect CSP Reseller.

Added Services and Support from the Distributor

As a Reseller, your Distributor will provide you with a number of services and support, including:

Technical training and assistance.
Marketing products and services.
Financial and credit terms.
Microsoft’s API integration to help place incoming orders for Cloud licenses.
Help transitioning into a cloud model or, if you already are cloud-engaged, your distributor will help you grow your value with your customers such as having a pre-sales consultant joining you on complicated deals.

This arrangement will prove most ideal for smaller organizations who will be able to reap the benefits of having their larger distributor’s resources at their disposal.

Profit Margin

As an Indirect CSP, you will buy your SKU from the distributor and you will be allowed to sell your products to your customers with a margin of profit of your choosing. It should also be taken into consideration that Indirect Resellers can expect recurring revenue as Microsoft moves its market exclusively to the Cloud. While Cloud-only products are their inevitable business plan, Microsoft doesn’t have the staff to fully support this kind of infrastructure, which is where this CSP has come from. It will be the foundation of a budding cloud reselling ecosystem and this is your chance to be a part of that.

Quick and Yet Controlled Process

You can get started quickly with the Indirect CSP partner program and once you’re there, you can evolve your business at a controlled pace, allowing you to focus primarily on your investments. The indirect CSP model will allow you to team up with a larger and more experienced provider while at the same time owning the customer relationship and experience. Considering the few qualifications you need to get started, this represents a relatively low investment for a high return.

Status

Through being an Indirect Reseller, you will begin to earn incentives straight from Microsoft. You will also receive the Partner of Record Status (POR), and you’ll also receive revenue recognition to be put towards your Microsoft Partner Status. This status and recognition will be on par with that of the Direct CSP model.

What Is a Direct CSP?

Unlike with Indirect CSP, in this model you will act as a Distributor, who will deal directly with Microsoft while also maintaining a relationship with your Resellers. This model is best suited for larger and more mature companies who have expertise in customer service. Below are some of the things you’ll have to consider if being a Direct CSP seems like a good fit for you.

Margin and Investment

Distributors can create a margin of profit for Microsoft’s product, sometimes as high as 20%. However, becoming a Direct Partner will require some level of investment, ranging anywhere from $50K to over $1M in investments.

Complicated Process

If you are going solo as a Direct CSP partner, the process can be quite rigorous and complicated, often taking as long as four months. In order to qualify for being a Direct CSP partner, you need to meet the following requirements:

You need to be an active Microsoft Partner with a Network ID.
You will need to be capable of providing your customers with 24-hour service.
You’ll need to purchase a Microsoft support plan and you’ll need to be able to pass a credit check before you can purchase the plan.
You’ll need to have at least one managed service already, an IP service, or a customer solution application.
You need to have a solid customer billing structure in place. Manual billing will not cut it.
You’ll need to maintain at least one Microsoft Gold Productivity Competency.
As a Direct CSP Distributor, you’ll be expected to manually manage your licenses through the Microsoft Partner Network Center.

Proactive Reductions

Before you begin the long process of applying to Direct CSP, it’s important to note that in most markets Microsoft is actively striving to reduce their number of existing Direct Partners instead of approving more. Although Microsoft recognizes both partner models and provides revenue recognition that is weighted the same, it may be very difficult to become a Direct CSP partner with Microsoft.

Looking for an opportunity to save roughly 20 to30% of your current spend on software licensing? Learn how software asset management can help in our article: Getting Started: Implementing Software Asset Management.

Choose the Right Solution for Your Business

Signing up for Microsoft’s CSP Partner Program can represent a new chapter in the growth of your business. Picking which one is right for you will prevent you from biting off more than you can chew and will allow you to benefit from this new solution.

At MetrixData 360, we have helped our clients through the trickiest of positions in regards to their software licensing when it comes to Microsoft and we can help you transition to this new CSP platform smoothly. If you’d like more information, you can contact us and a Client Success Manager will be in contact with you in under 24 hours.