The Three Microsoft Purchasing Models: Swipe, CSP, or EA
Assessing the benefits of the cloud and planning your organization’s migration is only the beginning of your journey. Once you’re in the cloud, you have a few purchasing models for the Microsoft cloud resources your organization needs. Microsoft saw the need to bridge the gap between a simple credit card swipe subscription and an enterprise agreement designed for the largest enterprises. The bridge was the creation of the Microsoft CSP (Cloud Solution Provider) program to offer organizations a new way to acquire the services they need. For most organizations, CSP brings the most value and flexibility to the table. Depending on your organization’s size and where you are on your cloud journey, one of the three purchasing models is likely better suited than the others.
Also read: Cloud Migration ROI: 5 Things to Expect from a Real Cloud Assessment & Plan
The three ways to purchase Azure and Microsoft 365: Swipe, CSP, or EA.
The Swipe Purchasing Model
For small organizations or companies just dipping their toes into all the cloud has to offer, a credit card swipe subscription directly from Microsoft is the easiest way to get started. Your designated cardholder will be billed for the resources your organization consumes, and your subscription will come with limited Microsoft support.
A credit card swipe subscription gives organizations the most flexibility, allowing you to flip the switch on provisioned resources and maintain full control of their Azure and Microsoft 365 subscriptions. Because you’re in charge of your environment, you will be fully responsible for making sure your cloud environment is optimized, and that operating costs are kept under control (unless the person who originally swiped left the company and no one is monitoring your cloud spend).
Despite having the greatest flexibility of the three purchasing methods, the credit card swipe leaves value on the table over the long run.
The CSP Purchasing Model
With CSP (Cloud Solution Provider), you only pay for the resources your organization consumes, without an up-front commitment to hit consumption or licensing thresholds. The Microsoft-licensed partner you choose to be your CSP will manage your Azure and Microsoft 365 subscriptions, provide premium support for your organization, and give insight into what your cloud spend looks like as well as make suggestions to help optimize your budget and the resources you consume.
With CSP, you’re getting the same cloud resources you would from a credit card swipe subscription bundled with the premium offerings of the partner you trust—all at a similar or reduced rate compared to swipe subscription pricing. With your CSP partner’s support, you can provision and deactivate resources, and add or drop subscriptions at any time. For most organizations, CSP provides the most value over the long run and near-instantaneous flexibility rivaling that of the swipe purchasing model.
The Enterprise Agreement Purchasing Model
With an EA (enterprise agreement) organizations will need to commit to consume a certain amount of Azure or fill enough Microsoft 365 “seats” for the duration of your contract. Enterprises are eligible for discounts if they plan on spending millions of dollars in Azure or filling more than 500 seats with Microsoft 365 subscriptions. While these plans can often time provide valuable cost discounts for enterprises, the high-volume requirements and huge upfront cost places them out of reach for most organizations.
All Microsoft EAs are made on a “use it or lose it” basis. If your organization spends less than your Azure commitment or drops below 500 users for Microsoft 365, you will still be billed for the full amount your organization committed to. EAs are commitments made for multiple years. EAs lack flexibility in spending and command that the organization hits its pre-committed consumption threshold or seat count to prevent losing the value made possible through the agreement.
Why should CSP matter to me and my organization?
The new CSP licensing model gives the best value and flexibility to most customers who are getting serious about the cloud and all it has to offer. If your organization has assessed a move to the cloud, CSP provides greater value than a credit card swipe subscription and greater flexibility than an enterprise agreement.
For organizations just moving into the cloud, CSP provides premium support on par with what you would expect from an EA without the large upfront cost and commitment that comes with it. Beyond the extended suite of value through CSP and managed services with a trusted partner, this model allows you to bundle your licensing and project services costs and consolidate them into one simple invoice.
Want to explore the benefits of Quisitive within the CSP model? Contact us to learn more.