Microsoft’s cloud services for enterprise licences are undergoing a shift, with a reduction in volume-based discounts. This development will therefore change the value proposition of Microsoft’s Enterprise Agreement (EA), in turn positively impacting Cloud Solution Provider (CSP) and Microsoft Customer Agreement for Enterprise (MCA-E) models.
For organisations facing upcoming renewals, this development requires a review of contracts, a reassessment of the Microsoft licensing strategy, and a check to ensure they align with business objectives. Let us get into this in detail.
Who is a Microsoft CSP, and Why Should Small and Medium-Sized Businesses Choose One?
Microsoft Enterprise Agreement (EA) is changing the licensing model for businesses with fewer than 2,400 users. Most small to mid-sized organisations will now have the option of choosing a flexible, cloud-aligned approach through the Cloud Solution Provider (CSP) program. This, in turn, will affect how stakeholders purchase Microsoft 365, how they budget for licensing, and who they buy it from. Instead of directly approaching Microsoft, businesses will now need to work with a licensing partner – one one who understands how to optimise costs while keeping compliance and security priorities in check.
Microsoft builds a modern approach to licensing through Cloud Solutions Provider, built on flexibility, transparency, and business alignment. Defining the value of CSP helps organisations understand Microsoft’s shift and the tangible benefits it offers to both IT and business leaders. Unlike Enterprise Agreements (EAs), which lock businesses into strict multi-year commitments, CSP offers flexible subscriptions managed through a partner. This provides scalability, pay-as-you-go billing, and closer alignment with actual usage, lending users and stakeholders the clarity needed to approach the transition with confidence.
The CSP model is not just a payment structure, but it is a business-enabling model. With the right CSP partner, organisations can optimise licences, discover underused Microsoft features, and drive adoption to achieve measurable business outcomes.
What are the Advantages of Choosing a Microsoft CSP?
- Flexible monthly billing allows scaling licenses up or down as business needs change.
- Usage-based cost alignment ensures organisations pay only for what they actually use, preventing overspending.
- No minimum user or seat count, enabling small businesses and start-ups to adopt licenses as needed. This also
- includes expert guidance and streamlined billing.
- CSP partners offer personalised, responsive support tailored to individual business requirements.
- Optimisation opportunities reduce redundant licenses and monitor usage patterns to lower waste.
- Licensing adapts easily to seasonal workforce changes, mergers, acquisitions, and growth spurts.
- Risk of overbuying, unused licenses, or feature duplication is minimised through easier license management.
- Transparency and flexibility help improve investment management rather than one-off procurement.
- Faster adoption of innovations like Microsoft Copilot with enterprise-grade support.
A Note on Security, Compliance, and Partner Value:
Microsoft licensing has robust built-in security applications for both security and compliance. This results in businesses spending more on third-party solutions that duplicate Microsoft’s existing capabilities. Well, in fact, Microsoft has invested heavily in enterprise-grade security, privacy, and compliance features that businesses can leverage through CSPs. Be it solutions like Microsoft Purview for data governance, Microsoft Entra for identity management, or Microsoft Defender XDR for advanced threat protection, it is possible to strengthen security while simplifying operations and reducing costs.
Unlocking all the benefits offered by Microsoft requires more than just the licensing contract; a trusted provider helps businesses maximise what’s already included in the licensing offering, gain priority access to Microsoft resources, expedite escalations, and leverage deep expertise to deliver greater ROI.
What are the Factors Influencing your Choice of a CSP?
Beyond pricing, the right CSP should be able to navigate and understand compliance gaps, the cost of downtime, and inefficient license use. A high-quality CSP delivers proactive monitoring, responsive escalation, and hands-on guidance to keep your environment running smoothly. They also bring ongoing license optimisation and a customer-first support approach that ensures technology investments deliver value long after the contract is signed. Further:
CSP opens the door to:
- Greater flexibility: Scale licenses based on current demand, not fixed projections.
- Shorter commitments: Move away from fixed lock-ins when priorities keep shifting.
- Robust optimisation potential: Gain access to monthly usage data, frequent reviews, and opportunities to right-size more often.
- Partner-driven support: Leverage guidance from CSP partners to extend services beyond just billing, including platform visibility, cloud cost reviews, and cybersecurity posture assessments.
Here is more: A CSP works better with a proactive business team. Microsoft will no longer guide businesses through renewals or usage alignment. The responsibility for accuracy now lives squarely within the business.
What is Next?
EA may still be viable for larger enterprises, but factors such as usage, preparedness for upcoming renewals, and whether the existing EA structure still meets internal goals should be assessed. Meanwhile, CSP is no longer just for smaller organisations, with discount parity across both EA and CSP, large enterprises can now reasonably evaluate both models side-by-side and plan based on business objectives rather than contract history. Before choosing between EA and CSP/MCA-E, check the following-
- What’s the current state of the Microsoft usage (and who owns this visibility)?
- Is there a risk of overprovisioning or surprise renewals?
- Are the functions IT, Finance, and Procurement in tandem with the licensing strategy?
- Is there a means to model options before committing to a plan?
These answers will easily uncover blind spots and help identify whether the current licensing path is aligned and serves business goals.
As a Microsoft Solutions Partner, Kloudify provides more than just licensing; end-to-end support, from cloud migration and deployment to ongoing management and optimisation. Unlike traditional Enterprise Agreements, Kloudify offers monthly billing flexibility, no long-term lock-ins, and personalised guidance from certified experts who help businesses get the most from Microsoft 365, Azure, and security investments. Get started with smarter Microsoft licensing: Talk to us now.
