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

 

 

 

 

 

 

 

How to License Azure in CSP

In this article, we will explain how Azure works in the CSP program.

Azure can be sold through various channels and programs.  If your company would like to purchase Azure, you can continue to purchase through a volume licensing agreement. If you’re a hosting provider and you would like to leverage Azure as your datacenter provider, you can also purchase it through volume licensing leveraging the Microsoft Hosting Exception found in the Online Services Terms (OST).  Last, if you are a solution provider, you can resell Azure to your end customers through the Cloud Solution Provider (CSP) program.   Let’s highlight how this would work operationally with links to the appropriate documents you should be aware of.

Azure in CSP Direct (Tier 1)

  • The end customer is the licensee.  They are the one to sign off on the Microsoft Cloud Agreement and follow the Online Services Terms.  They would also sign your own support agreement with the customer with SLA’s and other terms.
  • The CSP provider is the reseller.  As a CSP, you will sign the Cloud Reseller Agreement.  Your responsibility is to resell the licenses to your end customer, provide the support for the consumption, and provide proper billing services.
  • CSP is the reseller in this model, each end customer would be required to have their own Azure tenant.

Azure in CSP Indirect (Tier 2)

Same rules apply as above, however the Tier 2 provider would provide the platform and support for CSP.  The managed service provider (or reseller) would be responsible for the billing and overall management of the end customer.

Azure in SPLA

If a service provider would like to run a multi-tenant hosted solution to their end customers, they could leverage SPLA for all user based applications and Azure through the volume licensing Hosted Exception found in the Online Services Terms.

Thanks for reading,

CSP Man

CSP Rules for International Billing

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:

  1. 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.
  2. 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).
  3. 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,

CSP Man

Office 365 Licensing Scenarios Part 1

 

This is a new series on csplicensing.com called “Office 365 Scenarios.”  The goal is to provide the reader with a licensing scenario for a typical Microsoft enterprise customer.  Enjoy!

 Scenario 1

 M & A Corporation is a large private equity firm with 500 employees worldwide.  They currently have the Enterprise CAL suite under an Enterprise Agreement.  They have one datacenter for mostly Exchange and SharePoint.

Current Needs

  1. Free up IT resources to focus on other projects besides managing a datacenter
  2. Identify a cloud partner to outsource their server environment.
  3. Senior executives need to have both On Premise and cloud solution for the same device.
  4. Find a collaboration tool to enhance communication between departments.
  5. Identify a solution for compliance and legal hold and email retention.
  6. Needed the solution yesterday and do not have time to wait for their agreement to expire.

Solutions

  • Issue 1&2 – Free up IT resources/Cloud Partner – The best way for M&A to free up IT resources without jeopardizing performance is to outsource their server environment to a third party.  Office 365 plan E3 provides SharePoint, Exchange, Office Pro Plus, and Skype for Business.
  • Issue 3On-Premise and cloud deployment for the same user- Office 365 has dual access rights.  This means that if an end user who has a USL (user subscription license) has the equivalent of an on premise CAL.  It does not include the server license.  If M&A wants to continue to run on premise workloads using the dual access right, they must own the server license.  Secondly, if they want decide not to use Microsoft datacenters for Office 365, they can use their Office 365 User SLs (as covered above) to access their servers deployed on third party shared servers/datacenters via License Mobility through Software Assurance.  Again, they would need the server license with SA.
  • Issue 4Collaboration tool – Transitioning to Office 365 E3 will give them access to Skype for Business Plan 2.
  • Issue 5Compliance and Legal Hold – Office 365 E3 will give them Exchange Online 2 which includes Legal Hold; archives email for more than 10 years.
  • Issue 6Agreement doesn’t expire. Since they have the ECAL, they can use the bridge CALs to transition from on premise to cloud for workloads not offered through Office 365 (Windows/SQL).

Thanks for reading,

CSP Man

Disclaimer

The purpose of this article is for informational purposes only.  The names are fictional and created by the author’s imagination.  Any name or resemblance is pure coincidental.

Why Sell Cloud Products under CSP?

There are a number of licensing programs to choose from so what makes CSP so special?  I would argue that although this site is csplicensing.com, CSP is not necessarily a licensing program but a solution program.   The main reason as to why its different is support.    There are numerous reasons why CSP, the list below are ideas you should thing about both for the end customers as well as the managed service provider who is building a CSP practice.

Monthly Billing – lower upfront costs.

Scale user adoption – You can scale easier.  Many organizations lose ROI on large upfront volume licensing agreements.

Support Included – Every one talks about moving to the cloud, very few actually tell you how.  CSP helps you migrate to the cloud quicker, by leveraging your CSP support partner (which is required to be a CSP authorized provider)

Reliable –  Most CSP partners have a platform to manage licenses, adoption, and customers through one portal.

Discounts – CSP is competitive.  This is good for the end user to shop around.  Many providers offer free migration or discounts for partnering.

If you are thinking of signing up to be a CSP partner, there are important things to consider as well.  Again, its not just about the licensing, it’s about controlling the end-end customer experience from support escalations to migration.  You are the first point of contact, resolve issues, and billing platform.

A great resource for CSP partners https://partner.microsoft.com/en-us/cloud-solution-provider/resources

Thanks for reading,

CSP Man

What’s old news for some is new for others.

We wrote about some of these changes in an earlier post.  In this article, we will review the licensing in’s and out’s in greater detail.

What is it?

Windows 10 Enterprise E3 in CSP is a per-user subscription marketed primarily to small and medium sized businesses.

How is it licensed?

It is a per user subscription model.  Licensed users may install Windows 10 Enterprise on up to 5 devices.

Is it availalbe in SPLA?

Windows 10 Enterprise is not available in SPLA.  CSP and SPLA are two separate programs.

What are the requirements?

New and renewed CSP customers will need to accept the Microsoft Cloud Agreement (MCA)  to use Windows 10 Enterprise. The updated Product Terms use rights for Windows 10 Enterprise in CSP, which were published in the September 2016 Volume Licensing Product Terms review this change.  Click here to see the latest update.

What are some other licensing benefits or things to watch out for?

  •  Downgrade to Windows 10 Pro at any time. When a user’s subscription expires or is transferred to another user, the Windows 10 Enterprise device reverts seamlessly to Windows 10 Pro edition (after a grace period of up to 90 days).
  • Move licenses between users. Licenses can be reallocated from one user to another user.
  • Customers subscribed to Windows 10 Enterprise E3 and E5 can now upgrade their Windows 7 and Windows 8.1 PCs and devices to Windows 10 without the need to purchase separate upgrade licenses. Check out the blog post by Microsoft here
  • Customer that were subscribed to the Secure Productive Enterprise E3 and E5 can also upgrade their Windows 7 and Windows 8.1 PC’s to Windows 10.  Secure Productive Enterprise is the new name for the Enterprise Cloud Suite (ECS).  It bundles Windows 10 Enterprise E3 and E5 with corresponding versions of Office 365 (E3 and E5) and the Enterprise Mobility + Security solution (EMS).

Thanks for reading,

CSP Man

Office 365 Licensing

In order to understand a licensing program, it’s best to start at the beginning and go from there. Office 365 comes with various plans and product lines that can get a bit confusing to the average consumer.  In this post we will review Office 365 and Azure and the various programs to purchase them under.

Just purchased volume licensing and want to move to Office 365?  There’s a plan for that.  Need to buy the full license?  No problem.  Have Software Assurance (SA) and need to move to a User Subscription License (USL)?  Got it covered.  Here are 5 scenarios to help understand how to the licensing works.

Step-up-USL

John purchased an Office 365 E3 but really screwed up;  he really needed E5.  He’s midway through his agreement.  What does he need to do?  As long as he purchases the licenses under the same agreement, he can acquire a “Step-up USL” license at a cheaper rate than if he were to wait until his agreement ends and purchase E5 without the step-up discount.  Step-up USL is just a way to upgrade services during the term of the agreement. That’s a key fact to remember.  Step-ups expire when the step-up USL expires or the base USL expires (whichever expires earlier).

Add -on – USL

Bill is a bit of a nervous Nellie.  He has an on-premise volume licensing agreement but wants to try Office 365.  An Add-on-USL gives Bill the ability to migrate to Office 365 at a fraction of the cost.  This also must be purchased on the same agreement as the qualifying licenses.  In summary, it’s just a license that is purchased in addition to a previous acquired license at a fraction of the cost.

From SA USL

Mary is tired of managing licenses on premise.  She has an Enterprise Agreement (EA) and owns the Core CAL Suite.  She wants to move to the cloud, but wants to do it in the most cost-effective way possible.  Since she already purchased licenses with SA (a mandatory requirement when buying an EA), Microsoft recognizes (That’s nice of them) the investment they made with SA, and offers a discount to move to the cloud.  That discount is called “From SA USL”  Like everything else, you guessed it…it must all be purchased under the same agreement as they originally purchased under.

Full Blown License

Barbara hates Microsoft. For the past 10 years she has installed nothing but open software.  Her boss is tired of the incompatibility that comes with open source software and has recently told Barbara to either go to the Microsoft cloud or go home.  She decided to go Microsoft.  Since Barbara does not already own a Microsoft agreement (or any licenses for that matter) she must buy the Full USL license.  The Full USL is also applicable for those customers that let their agreement expire without migrating to the cloud prior.  Remember in the previous examples, all step-up, add-ons, and from SA must be purchased under the same agreement.

SAL for SA

This last example is not for everybody and is probably meant for a 500 level Office 365 licensing conversation.  That being said, I think it’s important to at least bring up.

Let’s say John bought Skype for Business USL license and for whatever reason his boss is hesitant about using Microsoft data centers.  Maybe it’s for disaster recovery or maybe there are compliance concerns (or maybe Barbara from the previous example went to work at John’s company 🙂 but regardless the reason, they do not want to use Microsoft.  How can they leverage their USL licenses but use another data center provider? It’s called SAL for SA.  The new data center provider can license through their Microsoft agreement a SAL (Subscriber Access License) that will allow John to leverage their existing USL license and pay a fraction of the cost.

There you have it.  Office 365 licensing 101.  The next post we will review the different products and plans to help you identify the right plan for you.

Thanks for reading,

CSP Man

 

 

 

Why “MSP” is the new “Cloud”

I think the acronym, “MSP” is the new “Cloud”. From the beginning of the century and carrying on through today, the term “cloud” was thrown around faster than a Nolan Ryan fastball (horrible).   “You have to get in the cloud!  “Hybrid Cloud!” “We need more Cloud!”

Why is “MSP” the new cloud?  For one, everyone wants to be a managed service provider.  If you really want to upset a reseller, call them a reseller. What is a managed service provider according to Microsoft?  I am not sure it is clearly defined, but I’ll give it my best shot.  A managed service provider is an organization that performs three primary functions as it relates to helping end users migrate workloads from an on premise solution to another data center provider (cloud).  The three functions are:

  1. Cloud Assessments – help end users determine how ready they are to offload workloads and determine which workloads they can even migrate.  This includes ROI analysis, training, and perhaps even SAM.  (Software Asset Management)
  2. Cloud Enablement – perform Proof of Concepts (POC), System Integration, and compliance.
  3. Cloud Operations –  Network monitoring, bandwidth, backup, security, and assist with troubleshooting.

This is exactly what Microsoft is looking for in a CSP partner.  MSP’s bridge the gap between the end-user and the data center provider (either Azure, Office 365, AWS, or some other 3rd party hosting partner).  One unspoken function of a MSP is not just migrating customers to the cloud, but moving them back from the cloud.  You can argue that the three functions mentioned can help customers migrate from the cloud back to on premise.  Just replace “cloud” with “on premise”and you get the picture.

Another trend is how the cloud partner ecosystem has also evolved to include the MSP.  MSP’s are partnering with other MSP’s to provide a fluid customer experience; it’s the same with CSP.  A service provider, who perhaps has the customer relationship, can partner with a CSP Tier 2 partner to perform those three functions on their behalf.  To Microsoft, they don’t care how a customer migrates, just that they migrate and have the support to help them manage it.

I remember when BPOS (the old Office 365) was first launched.  The Microsoft account teams had a huge quota to have customers sign up for BPOS.  It didn’t matter if they actually consumed it, as long as they signed up for it.  Microsoft had thousands of end users sign up for BPOS, but very few actually deployed it. (very few knew they even signed up for it).  Microsoft learned a lesson from that initial project – it doesn’t matter who signed up, it’s who’s consuming it that matters.  In walks are friend Mr. MSP.

The days of being a transactional reseller are over, if you are not in the MSP game, find someone who is…and fast!

Microsoft Teams

When Microsoft Teams were first announced in November 2016, the first thing that came to mind was here’s another application, another “tool” to make life easier;  why not just use Skype, SharePoint, and Yammer?   In a way, that’s true.  Why not use the tools already in place?  I think what Microsoft Teams accomplishes is what those other three applications does separately.  I like to think of Microsoft Teams as a real-time forum to chat, review content, and even participate in voice and video conferences with the integration of Skype.

For a full review and demo of the product check out the Office 365 blog   It will be interesting to see how this will play with Project Online and other management tools.

At this time, only business subscribers in plans such as “Business Essentials, Business Premium, and Enterprise E1, E3, and E5” have access to Microsoft Teams.  E4 subscribers who bought that plan before its retirement also will get access.

Thanks for reading,

CSP Man

 

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 Man