Having started their modernisation journey with the introduction of the cloud solution provider (CSP) program, Microsoft today announced that from August 1st 2019 new and renewing customers will no longer be able to consume Azure services via an Enterprise Agreement (EA). This includes the Azure dedicated Server & Cloud Enrolment (SCE), a variation of an Enterprise Agreement which is directly billed by Microsoft and requires a customer to commit to a 3-year term and make an upfront commitment to consume at least $12,000 of Azure a year, receiving 3 years fixed pricing in return.
So, what's different?
Customers will now have the option to consume via the new Microsoft Customer Agreement (MCA) or the Cloud Solution Provider (CSP) Program.
The new Microsoft Customer Agreement (MCA) removes a lot of the bureaucracy that exists around the Enterprise Agreement today and is a single, modular, electronic contract that is in place between Microsoft and the customer directly. Under this agreement, Microsoft will bill the customer directly at the advertised rates for Azure services that are consumed, and support is contracted directly from Microsoft.
As a channel-centric organisation, Microsoft strongly recommend that customers work with their partner ecosystem to ensure that they are getting the most from their Azure environments and the constant advancements being made to the Azure platform.
What's the best option for my organisation?
The below table compares the new MCA offering against the CSP option that exist today, and the outgoing EA:
Whilst consuming Azure via an Enterprise Agreement had its benefits, it was also largely flawed in that any of the $12,000 annual commitment that was unused was lost. The MCA now removes that issue and allows organisations the ability to purchase direct from Microsoft just like an EA. However, there are additional services required from existing Value Add partners or Service Integrators and these will now trigger an additional bill, whereas with CSP these can be rolled into a single monthly bill for a comprehensive managed solution. This is where CSP really does start to differentiate itself from the other offerings that are available in the market.
In summary, the introduction of the MCA simplifies the choice when deciding how your organisation should be billed for its Azure consumption, but it should not be considered a foregone conclusion. CSP is a comprehensive service and support focussed offering, which allows customers to combine the simplicity of the MCA with the expertise and service levels they are used to and have become accustomed to when working with their chosen and trusted software provider.
Microsoft has advised that this change affects all new customers from August 1st 2019 and any customer currently consuming Azure via an EA that is expiring post August 1st. An existing customer that has an EA containing Azure with an expiry before August 1st will have the opportunity to renew for a final 3-year term, though Softcat would strongly advise to engage with your Account Manager and a member of our Azure team to ensure all options are explored for your organisation.
If you think this will affect your organisation, or to find out more, get in touch with your Softcat Account Manager, or send us a message using the form below.