New CSP Direct Requirements

As if 2020 wasn’t hard enough for service providers and MSPs, Microsoft is making new eligibility requirements for CSP Direct partners starting January, 2021. This was announced to all partners earlier this week.

What are the new eligibility requirements?

New revenue target of 300K (USD) in CSP sales during the preceding twelve months is one of the major changes. CSP partners will need to meet this new requirement at the anniversary date of their support plan. In other words, if you have a support plan coming up for renewal soon and do not meet this requirement, you must put on your selling shoes and get to work or look at other alternatives. Active support plan (Premiere Support as an example) is also another requirement.

I think it is important to understand your options. If you don’t meet the requirements you must move to the CSP Indirect program. If you are close to hitting your 300k in sales, start looking at CSP perpetual licenses as a new revenue stream. Open licensing is going away, maybe perpetual licenses could be an option?

If you are CSP Direct authorized for the QMTH program only, this change will be significant. As part of QMTH, you must be CSP Direct authorized.

If you have questions on how this change will impact you, please email info@splalicensing.com

Thanks for reading,

CSP Man

CSP Perpetual Licensing – Good or Bad?

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 Man

CSP Direct v Enterprise Agreements

Have an EA up for renewal and don’t know what to do?  Listed below is a brief breakdown of what you can get.  I like CSP Direct over an EA for a lot of reasons, the main being flexibility.  CSP Direct is like an a la carte model; you do not pay upfront for the whole year.

CSP Direct

  • 1 – year commitment
  • Pay as you go versus yearly.
  • Minimum 20 seats
  • Ability to fluctuate user counts
  • Account support – Partner provide support as well as leverage their Premiere Support agreement with Microsoft at no additional costs.
  • Decrease user counts
  • Increase user counts
  • Products – all cloud subscription licenses
  • Self – Service – Partner (LAR) will provide a platform to manage your subscriptions

EA

  • 500 seat requirement
  • 3 – year commitments (annual billing)
  • Annual true ups
  • Microsoft credits
  • Support – basic support (additional for premium)
  • Decrease – once per year. Cannot decrease perpetual products or reduce your O365 subscriptions below your original commitment
  • Increase user count – Anytime
  • Products – All Microsoft Products.
  • Self -Service – O365 portal and VLSC

If you are under SPLA, CSP Indirect may make the most sense to reduce your costs.  Check out www.mscloudlicensing.com to learn more or www.splalicensing.com 

Thanks for reading,

CSP Man

The New Microsoft Cloud Agreement

In this article, we will provide a short brief on the changes to to the Microsoft Cloud Agreement (MCA) and what it means for all Cloud Solution Provider subscriptions and licenses paid in full.

What is the MCA?

MCA is the end customer agreement for CSP.  It details all applicable use rights and governs the end customer’s use of Microsoft cloud solutions.

How often does it change?

Agreement terms are published yearly.

Does Microsoft provide it directly to my end users or is it something I need to provide?

MCA is always provided by the CSP provider, not Microsoft.

What’s new?

Downgrade rights are now available for CSP customers permitting customers the right to install previous versions.  Similar to SPLA, the use rights that are in effect when the customer orders software will apply to the customer’s use of the version of the software that is current at that time.  All future versions, the use rights that were in effect when the products are first released apply.   In addition, customers can now transfer licenses that are fully paid (perpetual licenses) to an affiliate or third-party due to merger or a divestiture.

Any gotchas?

Microsoft has the right to verify compliance.  If unlicensed use is 5% or more, the customer must reimburse Microsoft for the cost of the audit and acquire the additional licenses owed for the bargain price of 125% more than the actual price.  Similar to SPLA, they can use independent auditors and contractors to determine compliance.

Does the MCA ever expire?

No.  The existing agreement remains in effect until the termination or renewal of the customer’s subscription.

My customer accepted the prior MCA terms.  Do I need to have them sign this new one?

If the customer is not creating new subscriptions, no.  The terms of the existing MCA continue to apply.

Are there templates I can use?

Yes. Go to the Microsoft partner center for details.

Does my customer need to sign off on this?

They have to agree to it but not sign it.  Similar to the End Customer Terms and Conditions in SPLA, you must make it available to your customers.   As part of CSP, I would make it part of your overall managed services agreement.

Where can I get a copy?

You can get a copy here

Thanks for reading,

CSP Man