CSP Licensing

Should you go with Microsoft Enterprise Agreement (EA) or with a Cloud Service Provider (CSP)? Making the right choice is critical in business, but determining the best decision for your specific enterprise can be challenging. That’s the case when it comes to contracting services for Microsoft applications – signing up for an EA directly with Microsoft used to be the best choice for large companies for years. Today, there’s an option called CSP (Cloud Service Provider), which represents a contract you can buy from a certified Microsoft partner.

Take a look at the differences between EA and CSP, and why it makes sense to get your licensing through a CSP.

EA vs. CSP – Which One is for You?

Enterprise Agreement is recommended only for large organizations that need to negotiate terms with Microsoft based on volume, include their affiliates in standard Microsoft agreements., and a subscription-based licensing and a fixed price for software for three years.

Cloud Service Provider is a more viable option for companies that are approaching their EA renewal. They should consider CSP if the organization is of a smaller size (less than 300 employees) and needs a CSP partner as an advisor for their implementation projects as well as to provide more personalized support while licensing and managing accounts. It’s also best for enterprises that had difficulties in predicting their annual subscription quantities.

What Can a CSP Partner Provide?

Microsoft has designed the CSP model to allow organizations to have a closer relationship with a certified Microsoft Partner (that acts as a tech advisor.) Microsoft Partners can deliver Online Services to enterprises in a consultative and flexible manner – to support you when there are any issues and questions as well as to own the relationship end-to-end. The CSP Partner is there to help you identify the best Online Services that you should implement for your users, and to ultimately maximize the CSP value for your enterprise.

Which CSP Partner Should You Select?

There are two options you can choose from – CSP Direct Providers and CSP Indirect Resellers.

  • CSP Direct Providers. Operating in a single-tier model, these partners can offer their billing and support infrastructure as well as appropriate sales. They are typically more mature (as a certified and registered partner) and can directly bill their clients. Competent in various technologies, Direct Provider can implement support and solutions on their own.
  • CSP Indirect Resellers. Operating in a two-tier model, Indirect Resellers provide services to their clients by working with a distributor. The distributor offers them tech support, customer service, and billing, while the Partner only focuses on selling solutions.

If your enterprise wants to use Microsoft Online Services in a controlled and predictable manner, where you can assess and adjust your consumption on a monthly basis, then the CSP option will work best for you. An EA agreement requires you to purchase a minimum of 500 licenses (at the same time) and set for three years. You’ll need to pay upfront for the entire year, which can impair your cash flow. On the other hand, CSP licensing is attractive because it’s a month-to-month commitment, which is perfect for industries that have seasonality or businesses in volatile markets. Also, if a company wants to start with a basic plan as it moves to Office 365 or finds it difficult to predict long-term usage requirements, they can increase their licensing level as their users adopt the functionality.

For smaller organizations, a CSP model is the best alternative. Every business has their unique needs to be considered, and there’s no one-size-fits-all solution for all. Contact us to get help in determining the right option as well as to discuss all of the options you can choose. Managed Solution is proud to be a digital advisor in industries, such as biotech, legal, and healthcare, as well as a Microsoft Gold Partner.


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