What are Microsoft trying to do with CSP, and what do you need to know about it?

What is Microsoft CSP and how will it affect my Microsoft estate?

As many businesses will know, they are gradually being pushed (some rather aggressively) towards a subscription type billing contract which also fits a ‘cloud first’ shift for some of the leading software vendors. In 2015 Microsoft released a new type of cloud/consumption focused agreement called CSP or ‘Cloud Solution Provider’ to facilitate the ever-growing inventory of Microsoft cloud products and subscription based products.

Ultimately as a customer that buys IT products, some of the many questions you would ask would be, ‘Why would I buy my Microsoft under CSP?’, ‘How do the prices stack up against other Microsoft agreements?’ and ‘How does it fit my business?’. As early adopters of the CSP model, we’ve gained a lot of experience on the platform and can help to address some of these questions, shed some light on CSP, and help you to decide on the right mix for your business.

Why would I buy my Microsoft under CSP?

Microsoft has a number of agreements that customers may be familiar with, notably the EA and MPSA agreements. All Microsoft agreements serve a purpose and commercial use case depending on corporate structure (subsidiaries etc) and also whether your business itself favours an OPEX vs CAPEX expenditure model in general.

MPSA and EA as the most common ‘go-to’ agreements have their limitations with regards to ease of use. EA’s typically will require a significant level of commitment to get the enterprise discount under one of the enrollments. This means that your organisation is tied up to Microsoft for 3 years and you must commit to have, in some cases all of your employees standardised on one product. For example, under the enterprise enrollment of an EA an organisation will typically need to license all their devices with an enterprise license e.g. Windows 10 Enterprise or Microsoft Office Professional Plus. For some organisations this can be particularly limiting as it requires more commitment and less flexibility. MPSA on the other hand is a transactional based program which does offer some level of flexibility, but licenses are still perpetual and it doesn’t completely solve the problem of favouring an OPEX favouring business.

CSP on the other hand is a subscription based, Microsoft agreement that allows you to add and remove the number of licenses you have on a monthly basis. You are only charged for what you consume. Examples of products that can be added are; Microsoft 365, Office 365, Azure Consumption services, Visual Studio, Microsoft Dynamics, even typically perpetual on-prem software is being added into CSP such as Windows and SQL server. We envisage the number and variety of products being offered growing with time.

How do the prices stack up?

The short answer to this …. it depends. EA’s are still likely to be cheaper for most scenarios. If price is your only goal, i.e. to purchase a given Microsoft product for as cheap as possible then have a word with your account manager and they will be able to work through the various scenarios for you. Talking about the future of CSP, Microsoft are gradually looking to push more and more products onto the program which is evidenced by the introduction of Windows and SQL server onto the CSP portal. Purely an educated guess here and obviously MBA cannot speak for Microsoft but we believe that CSP is likely to be a key strategy as it matches how most software business want to get paid; subscription based and reliable monthly revenue. So, if that’s the case and looking at the last Microsoft price increase, we believe that prices for CSP and other subscription Microsoft products will come down relative to their perpetual counterparts. If you want to compare and discuss CSP please get in contact with us and we will be happy to run through options.

How well does it fit my business?

The bottom line is it might not. Cases of where it might not be; customers that use a lot of the SA benefits. As it stands CSP doesn’t offer SA benefits as such. We speculate this may change as more products get moved to the platform but for now that is not the case. We also can see a lot of customers that get a lot of EA discounts for some products not necessarily moving over to CSP straight away. There is also the fact that some customers don’t like a monthly OPEX based billing structure. A lot of customers still prefer to buy and own perpetual licenses.

All in all, CSP is a game changing offering from Microsoft, it has been around for a while and in the near future will change a lot about how customers licence software. At MBA we are happy to simplify the complexities of CSP and everything Microsoft with you. Get in touch with your MBA account manager to find out more!

Guy Brandon