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 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


  • 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,


New Website for CSP’s and Service Providers

One thing that we can all agree is Microsoft licensing is complex. Over the years, many organizations have asked for more in depth analysis and easier to read use rights. From this feedback, we created a new free website dedicated to helping SPLA and CSP partners understand the different program options and use rights available to them. The new website is www.mscloudlicensing.com.  The site includes:

Document Library: Easy to read whitepapers on licensing and best practices. What really happens in an audit? How are other service providers handling CSP and Azure? AWS licensing? https://mscloudlicensing.com/document-library/

Forum: Experts always review and answer your licensing questions. https://mscloudlicensing.com/forum/

Articles:  Most of the splalicensing.com articles you are used to reading and many more on CSP, Azure, AWS, and other cloud providers.

Hope you find it helpful!


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,









How to Leverage Office 365 for On Premise Deployments

You often hear an “expert” talk or write about dual access rights for the cloud. What does this really mean? Am I really getting a two-for one deal when buying Office 365? In this article, we will review two deployment options – Partner Hosted scenario and an On-Premise scenario and explain what you will need to purchase.

The question of the day – can you leverage your Office 365 licenses on premise? Short answer…yes, but don’t forget about the server license! Let’s provide an example to illustrate how this will work.

On Premise

In traditional licensing, a customer who owns an Exchange Server license must also buy a CAL (Client Access License) to access that Server.  Let’s say their business expands and they add new employees.  For the new employees, they decided to test the waters and move them to the cloud using Office 365 E3.   For the Online Service, it doesn’t matter how they bought Office 365, it could be though CSP or another program, the use rights remain the same; the E3 licenses have the CAL equivalency to access their on premise Exchange Server.  Secondly, in regard to the version of the server they can access with the CAL, the Product Terms states that users can access current OR previous versions of the Server.  One last statement, make sure you have the right Office 365 User Server License equivalent.   As an example, if you have Exchange Enterprise, the CAL equivalent is Exchange Plan 2.   Here is a good chart from Technet highlighting the plan equivalent to an on-premise CAL.

Partner Hosted

If you decide to buy Office 365 (E3 as an example) and for whatever reason (security, etc) you decided to leverage another 3rd party service provider to host the solution on your behalf, you can still leverage your Office 365 USL licenses the same way as if you were deploying on-premise.  In this scenario, you are not deploying in your own datacenter, but using a third-party.  Let me provide an example:

You purchased Office 365 E3 for every user at your company.  Your CEO has a good buddy who owns a small hosting company down the street.  He decides he doesn’t want to use  Microsoft’s data centers, he would rather give the business to his buddy.  You realize that the USL licenses that you purchased have the equivalency of an on-premise CAL.  All you need to do is buy the server licenses the same as if you were deploying out of your own datacenter.  The hosting provider, can now deploy your solution from his datacenter in a shared hardware, dedicated VM environment.  In other words, he can leverage License Mobility with Software Assurance benefit.

In either scenario, it does not matter how you buy Office 365, the key to remember is having a USL license by itself doesn’t grant you the dual access right, but owning a USL license and server does.

Thanks for reading,


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,