The Microsoft Cloud Solution Provider (CSP) program offers a transformative approach to managing cloud services, allowing Microsoft partners to distribute and customize licensing solutions to meet diverse client needs. This program simplifies the deployment of Microsoft’s software offerings, enabling partners to tailor Modern Work and cloud solutions more effectively.
In this guide, we explore how Microsoft CSP licensing reduces the inefficiencies and constraints associated with perpetual licenses, empowering businesses to partner with cloud solution providers that prioritize maximizing cost-effectiveness and functionality.
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What Is The Microsoft CSP Program?
The Microsoft Cloud Solution Provider program (also called the CSP program) was developed to enable Microsoft partners (or CSPs) to sell and distribute licensing for Microsoft cloud services. In addition to making it easier to distribute Microsoft’s software and services, the CSP program lets experienced Microsoft cloud partners, such as s4nets, purchase more customizable solutions for their clients.
As an added benefit to clients, the CSP program offers flexible licensing options that can help keep costs down. Previously, clients were limited to traditional licensing agreements which locked them in for longer terms and were much more challenging to navigate. Newer licensing can be purchased for shorter terms and with more flexible use allotments.
The Downsides Of Traditional Licensing Agreements
A traditional licensing agreement allowed businesses to purchase perpetual licenses for specific software versions and services. When they wanted to upgrade, customers would need to purchase a new license for the upgraded software.
Historically, clients knew what features and functionality they needed, but didn’t know how their needs translated to the licensing they purchased. For instance, legacy implementation of mail archiving in Microsoft Exchange required on-premises setups and specific licensing. Getting the wrong or incomplete software licensing could often lead to lengthened implementation schedules and cost inefficiencies.
However, the wasted funds didn’t stop there. Traditional licensing offered True-up, but didn’t allow for a “True-down.” A “true-up” process involves assessing your actual software usage over a given period and adjusting your licensing agreements accordingly. If usage exceeds the initially agreed number of licenses, you’d need to purchase more. Conversely, “true-down” is a less common option that allows organizations to reduce their number of licenses and lower costs if their usage has decreased.
So, if you purchased seats for an annual or three-year contract, but didn’t need them due to downsizing, you’d still be responsible for paying for those unused seats.
Enter the world of cloud service provider licensing—a paradigm predominantly centered around consumption and flexibility. CSP licensing lets Microsoft swiftly adapt software without selling an entirely new version, bundle services, offer a la carte options, and keep costs lower for customers by charging recurring fees.
How Does A Microsoft CSP License Work?
Unlike traditional models, CSP licensing operates on a subscription basis, typically billed month-to-month. Though this might appear more expensive at first glance, the inherent adaptability is invaluable, allowing organizations to scale resources up or down according to immediate needs.
With expert knowledge of Microsoft function-to-license mapping, s4nets team members maximize cost-savings for your business while ensuring that we deploy the solutions and services you need.
| Traditional Licensing Agreement | Microsoft Enterprise Agreement | Microsoft CSP Licensing | |
| Pricing | One-time purchase for a perpetual license. | Typically involves upfront costs and annual payments based on usage and commitment. | Monthly or annual subscription payments based on actual usage; pay-as-you-go model. |
| Business Size | Suitable for any size, commonly used by smaller businesses needing few licenses. | Best suited for large organizations with 500 or more users/seats. | Can accommodate businesses of all sizes, often favored by small to medium-sized businesses. |
| Software & Service Add-Ons | Limited ability to add services; typically requires separate agreements for updates or services. | Offers comprehensive add-ons and software assurance benefits, including upgrades, support, and training. | Provides flexible add-on options, including bundled services and integration with various Microsoft Cloud services. |
Microsoft CSP Licensing VS Microsoft Enterprise Agreement (EA)
Microsoft Enterprise Agreement (EA) licensing provides solutions for larger businesses with 500 or more users or devices who are willing to commit to a longer three-year licensing agreement.
EA licensing enables businesses to forecast their technology costs and offers built-in discounts, but lacks the flexibility of the CSP licensing model where users typically commit to monthly or annual licensing agreements.
Additionally, while services and seats can be added-on under True-up, they cannot be removed for the duration of the EA. Conversely, CSP licensing empowers businesses to quickly and cost-effectively adapt to changing technology needs.
How Cloud Solution Provider (CSP) Licensing Benefits You
The cloud service provider pricing model equips businesses with the flexibility to manage their licensing for Microsoft 365 and Azure platforms. Companies can reserve instances or make use of Azure Savings Plans to optimize costs.
Commitments to resources, such as through a one- or three-year license, allow for pricing assurance. Crucially, these commitments avoid resource wastage typical of rigid traditional licenses.
A notable recent advancement is the availability of Multi-Geo capabilities introduced in June 2023. CSP partners acquiring this functionality empower clients to comply with diverse data residency requirements—an ever-important consideration in today’s globalized business world.
Further, a growing remote workforce has made cloud-based, unified communications solutions an essential part of a business’s infrastructure.
These tailored offerings underscore how cloud services are both cost-effective and strategically aligned with client-specific needs.
Choose s4nets As Your CSP For The Best ROI
When it comes to deploying the cloud technology solutions and infrastructure, solutions4networks emphasizes client success through due diligence and strategic implementation. In plain language, we put in the hard work to ensure that your business gets solutions it can rely on without cutting into your margins.
Our experts assess which solutions best match your business’s needs by performing an in-depth evaluation of the features and functionality that support your business’s operations. We leverage license-to-functionality mapping expertise to ensure that you’re equipped with the correct features and licenses.
As a trusted Microsoft cloud partner, we also offer comprehensive services for Office 365 and Microsoft Azure to help your business get the maximum value from the investment in Microsoft licensing.
Ready to upgrade your network with cloud services? Get in touch.