CSP Licensing 101

Cloud Solution Program is a new way to purchase Microsoft cloud solutions from various types of partners within the industry.  In this article, we will review what is CSP, why CSP, and who can benefit from it.

In short, the Cloud Solution Program is a way to sell your own offerings and services along with Microsoft cloud (Office 365 as an example) to your direct customers.  Let’s say you own an IT services company who provides migration assistance for customers who purchased Office 365.  With CSP, you have the ability to sell Office 365 bundled with your own services as one simplified package to your end users.  Now you may be asking, Why would I do that?   There are various reasons for everything, but the primary reason is for partners to control the end-end purchasing, support, billing, and procurement of Microsoft cloud services.  Depending on which tier you qualify for, you can provide your customers with one simplified invoice.

There are two types of resellers for CSP.  Tier 1 and Tier 2.  For a full overview check out Microsoft Partner Video but below is a general summary.

Tier 1 – Direct relationship with Microsoft.  The reseller purchases from Microsoft who in return sells it to the end user.  Services is included in this package.

Tier 2 – Indirect relationship with Microsoft.  The partner can obtain CSP through their distributor, package it, sell it, and provision it.  They (the partner) controls the billing, support, and provisioning of the service.  This fits in well with the hoster provider community.

This is a good move if you are a Microsoft investor.  Microsoft (as the video illustrates)  allows partners to increase margins.  I agree, but I also think the real reason is it ensures the solution will be deployed.

I remember (and I am dating myself here) the Business Productivity Online Suite.  Microsoft account managers were highly incentivize to sell BPOS.  Some would throw it on a customer’s price sheet at zero cost so the customer would have no idea they were even “purchasing” it.  They were not compensated for the actual deployment.  When Microsoft ran the numbers, they sold thousands of seats of BPOS, but when they ran the real numbers, a very small percentage actually deployed it.  Cloud was a relatively new concept, and (as some are today) were concerned about security, migrations, etc.  The time to actually deploy was astronomical.  A customer in essence, could of “purchased” BPOS for free, never know they even had it on their price list, and actually purchase and deploy a competitors cloud offering.

Moving to this CPS model streamlines the process.  If you are a CSP reseller, you have to add services to your offering.  Without services, the customer could just purchase Office 365 through various licensing programs or even Microsoft directly.  Adding services as part of the requirement ensures Microsoft the products they are selling will be deployed.  Once deployed, it’s difficult to turn back.  In other words, once a Microsoft cloud customer, always a Microsoft cloud customer.  You could say the same with any other cloud provider.

If you have your own IT services company or hoster and become two tier authorized, you have the ability to really own the end customer through this program.  In the past, a company could receive Office 365 from a reseller, but use another company to provide the migration and implementation, and perhaps another company to consult on the licensing.  Under CSP, you can get all of that from one provider.

I like CSP, I think it makes sense in a lot of different scenarios.  If I was a hoster, I would embrace it, but I would also offer my own hosted services as a competitive offering.  If your customer demands Office 365, you  can do it.  If the customer wants your own version of Office 365, you can do that too.

For more information, I encourage you to check out the CSP portal found on the Microsoft Partner site as well as the CSP FAQ

Thanks for reading,



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