Microsoft announced a new way for traditional enterprise clients the ability to purchase perpetual based licensing through the CSP program.
Historically, perpetual licensing fell into the Open Licensing or Enterprise Agreement bucket in which customers were offered volume discounts and software assurance benefits for Microsoft software they purchased. A customer can still purchase under these programs, but it is clear Microsoft is heading towards CSP across all licensing programs. You can read about it here (you will need a Microsoft account to sign in) https://partner.microsoft.com/en-us/resources/collection/software-in-csp#/
Is this a good thing? I think it provides flexibility regarding who you purchase from and options for products you cannot move to the cloud. This opens the door for VARs to sell into enterprise accounts that traditionally were only sold through the larger LSP resellers. In addition, there’s no partner incentives or support included when an enterprise customer purchases licenses through an Enterprise Agreement or Open program like there is with CSP. In a lot of ways, CSP makes a lot of sense. So what are things that you should watch out for when looking at CSP over an EA?
CSP perpetual licenses are sold without Software Assurance (SA). SA is a key ingredient if you want to move workloads to the cloud. With CSP perpetual, this is an on premise solution as oppose to cloud. That being said, under the same CSP agreement, you could buy Office 365 or Windows Server subscriptions which will allow flexibility for hybrid type environments.
The other thing to consider is upfront payments. With traditional CSP, you are buying a subscription versus buying perpetual. With CSP perpetual, you are paying upfront and you own that license. There’s no minimum requirement and of course no maximum. In short, this means there are no volume discounts.
There’s a lot more information coming with this new announcement. We will certainly keep you updated. I will be curious on your thoughts! Drop us a note or leave a comment below.
Thanks for reading,
CSP by its nature is designed to provide different licensing and support options for the channel. In this post, I want to highlight a couple of those options and how you can partner with other CSP providers to satisfy your end customer.
According to the Microsoft Cloud Solution Program Guide, the CSP direct partner must invoice the licenses directly to the end-user. That’s fine in many instances, but what happens if you have customers globally, but only authorized in the USA? In other words, if you are authorized in US, but have a customer in Australia, how can you resell CSP to that end user? In walks our friend ‘Multi-Channel”.
Option 1: The end customer in Australia could set up shop in the US and use an US address to receive licenses leveraging your CSP USA authorization . The problem with this (especially in Australia) is latency issues and billing. The address on the invoice is where the datacenter location will be but the users will still be in Australia.
Option 2: The CSP authorized reseller in the USA could partner with a CSP reseller in Australia to procure the licenses. In this model, the USA CSP partner would provide all the support for their Australian customer, but another partner would provide the licenses.
I like option two the best. Most MSP’s and other solution providers do not make money from the licensing, they make money from supporting the solution. Leveraging another partner will take care of the customer and both parties will be happy. What do you think? Is Multi-Channel a good idea?
Thanks for reading,
Disclosure – There are always updates and revisions to every licensing program. This blog is for educational purposes and will update accordingly.
CSP is one of the few programs (outside of SPLA) in which end customers have access to Microsoft technologies but really don’t know how they are licensed. In the end, that’s one of the values of outsourcing your IT management to a CSP provider. If a CSP provider is doing their job, the end customer shouldn’t know that they are buying CSP. All they should know is they are buying a managed service. The rest is on you, the CSP provider, and with every other Microsoft program, there are rules you must follow to maintain compliance and make CSP as seamless as possible. In this article, we will look at how billing works internationally.
The first thing to remember is you can only sell to customers in your region/market. The good news? There are several countries per region. In other words, if you (as a CSP partner) have an account in a country, you could use the account for every country in that region. As an example, if you have an office in the UK, you can transact with a customer in Italy because by Microsoft’s definition, Italy and UK are in the same region. What happens if you are not authorized in your customer’s region?
Let’s provide an example. Manage IT Services is CSP indirect authorized provider in the US. They have an end customer who wants to switch from their current provider in Australia. The existing domain is attached to the customer’s local physical address in Australia. How can the Manage IT Services support this customer?
They have three options:
- If they are CSP authorized in Australia, they can manage it from their Australia office. CSP is regionally authorized, so a transaction via the partner portal (in country) would be required. The customer’s invoice location listed on the AU tenant would also mean the CSP partner would also have to be listed as a CSP provider in region.
- If they are not CSP authorized in Australia, they can partner with another CSP partner in AU. The CSP partner would provide the licenses, Manage IT Services would provide the support. This is not a very viable solution for several reasons (explanation further in this article).
- Have the end customer use a physical US address (if they have one). CSP is a monthly contract, so they could discontinue the AU tenant and start a new one in the new location. They would have to prove to Microsoft they in fact do have a US location. The problem remains that they are in Australia. There would be concerns over latency issues and support due to challenging time differences.
To sell into different markets outside of your own, your organization must create multiple accounts. Like other Microsoft programs, they require a physical address. In the case of CSP, the physical address must be attached to each domain. In the example above, the end customer has a domain tied to their AU location, making it very challenging for the US provider to transact CSP. If you are a service provider who operates globally, you might want to consider becoming CSP authorized in other regions.
I mentioned earlier that a CSP provider in the US can partner with another CSP partner in Australia to manage the licenses. There would be a two-step process for resolution support. The local partner in Australia would have to be listed as an additional delegated admin on the end customers tenant to be able to escalate to Microsoft for support. The bigger issue is latency and time challenges. To add another layer to this complex solution, the customer would receive multiple bills (CSP and you the MSP). Sounds fun, doesn’t it?
Thanks for reading,