BIG CHANGES COMING FOR CSP DIRECT PARTNERS

Our sources at Microsoft have told us there will be new requirements for CSP Direct partners (formally referred to as Tier 1). Apparently, by either the partner's annual re-enrollment date or August 31st, 2018, (whichever is later), Direct partners must either purchase cloud support from an advanced partner or leverage direct Microsoft Premiere Support. Both come at a hefty cost and dig further into CSP margins.

Microsoft has moved away from Premiere support to the new Unified Support model, under which Gartner says most Enterprises will see a 25% to 30% price increase. For a comparison of partner delivered support vs. Microsoft Unified Support check out our friends at USCloud.

This move does feel like Microsoft may have authorized too many Direct CSP partners and now wants to either make sure they have solid support behind them or go through a CSP Reseller (formally Tier 2). The challenge with that is, the margins aren’t as good as the Direct model.

While many partners signed up for CSP Direct to get the QMTH (Qualified Multi Tenant Hosting) benefits that give use rights for a partner to install a copy of office on a partner hosted server, others truly see a new market opportunity selling CSP solutions.

We’ve also heard that a partner must offer a managed service to qualify to be a Direct CSP partner. This has always been a requirement of the program but not strictly enforced.

It will be interesting to see how Microsoft enforces all of this going forward and makes a partner choose either an expensive support option, lower margins or not having their CSP agreement renewed on it’s anniversary (check out the fine print of your CSP agreement, Term and Termination, Section 12 a. and b. - it can be terminated without cause)

If a partner is terminated, what hasn’t been made clear is what will happen to any customers the partner has onboarded to date. If the partner joined the CSP program to leverage QMTH use rights, installs a copy of Office on a server for an end customer, and then has their CSP agreement terminated, are they non-compliant?

Feels like a grey area, which is our specialty.

If you are struggling with compliance related to your CSP, book your free consultation and talk with one of our licensing experts.

As Always,

Be SPLAWESOME!