Microsoft Cloud Solution Provider program vs. Microsoft Enterprise Agreement: Which fits your cloud journey better?

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Innovation and digital transformation are driving the shift to cloud. Analyst research shows that interest in public cloud migration has steadily increased by a rate of almost two thirds each year over the last three years. Clients are not only migrating workloads to the cloud, but are investing in cloud to support new capabilities as they evolve their businesses. Many buyers are opting for a “cloud-first” approach in acquiring new IT assets.

Success in the cloud depends on full accountability and the efficient use of cloud resources. With so much at stake, many clients are struggling to manage licensing solutions for their hybrid and increasingly cloud-driven Microsoft environments.

The crux of the matter is this: Should you choose a Microsoft Cloud Solution Provider (CSP) program or a Microsoft Enterprise Agreement (EA)?

A scalable solution

If you’re looking for a scalable solution that allows you to evolve as your needs change, working with an accredited Microsoft CSP partner is your best bet. The CSP program allows you to add or remove users and products instantly and pay only for what you use.

The flexibility of this program allows you to amend your licensing requirements as often as needed in line with business demands, whether that’s on a daily, weekly or monthly basis. Why is that important? It offers you the ability to select a partner that can offer a true cloud experience featuring solution subscriptions and services billed in local currency, with customized billing and invoicing.

In addition, you can use the CSP program in conjunction with all other purchasing routes available to access Microsoft cloud services. Gone are the days of pre-committed expenses for software licensing.

By migrating your licensing requirements to this program, you can benefit from monthly billing in arrears. This provides greater visibility and management of cash flow and reduces the likelihood of incorrect billing or “bill shock” for heightened services running on Microsoft Azure.

No need to wait

With EA contracts offering so much less flexibility, an increasing number of organizations are making the switch to CSP when their EA contracts come up for renewal. However, you don’t need to wait for your agreement renewal time, as many clients are splitting out requirements for a subset of Microsoft cloud services to avail themselves of the extensive flexibility CSP brings to the table.

An EA has a three-year contract term, but it’s billed in annual payments, which offers the ability to budget for the annual base expense. In addition, once each year Microsoft requires an inventory (called a “True-up”) of your licensing estate throughout the year to ensure you’ve paid for the proper amount of usage. As a result of this “True-up,” the contract pricing can change with little notice.

With the CSP program, the pricing structure is much different. There are no surprise costs at any time throughout the year. You simply pay for the seats you use at any given time and can modify to add or remove new users as you see fit.

It’s worth bearing in mind that under the CSP program, you can move away from transactional purchases of software and infrastructure and embrace the best of Microsoft’s cloud-driven business enablement solutions.

To help you evaluate your options, take a look at this comparison chart (PDF) of Microsoft EA and CSP licensing agreements.


Gwen McSweeney is the Cloud Capability Lead for Software Licensing and Management Solutions at DXC Technology.

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