Microsoft Licensing: What Is a CSP? What the Right Partner Can Do for You

What is Microsoft CSP? A Microsoft Cloud Solution Provider (CSP) can transform how your business accesses and manages cloud services, offering dedicated support and simplifying complicated licensing beyond standard cloud solutions.

What Is a Microsoft CSP?

The Microsoft Cloud Solution Provider, or CSP, program enables qualified companies to sell Microsoft cloud services to their own customers. So, those who sell Microsoft services work together as partners with both you and the tech giant to help optimize your investment.

By choosing the right CSP provider, you gain a helpful guide that understands your business and how to use Microsoft cloud tools to maximize their potential.

Going the CSP route instead of purchasing a license directly enables:

• A simplified, scalable licensing process
• Cost optimization
• Strategic support with access to seasoned experts
• Compliance and risk management
• Alignment with your business goals

Here, we dive into the Microsoft Cloud Solution Provider program, how it works, the kinds of services you can get through CSP partners, how it’s different from buying licenses directly, and its benefits.

Microsoft CSP and Its Role in Modern Business

The Microsoft CSP model allows you to purchase Microsoft cloud services from an experienced organization that understands how to manage Microsoft licenses and use their tools to benefit your business.

Your CSP provider should act as an intermediary and a support provider who helps you choose the optimal licensing mix. They may also provide dedicated support with implementing, scaling, and maintaining your cloud services.

Tiers of Microsoft CSP Partners

There are two different tiers of CSPs: direct and indirect, also known as Tier 1 and Tier 2.

Tier 1 direct CSPs act as full-service, strategic Microsoft partners. Tier 2 indirect CSPs, or resellers, offer a more hands-off approach to licensing.

Tier 1 CSPs maintain direct partnerships with Microsoft, purchasing products directly and adhering to Microsoft’s highest standards. Companies that achieve Tier 1 status must demonstrate exceptional service, support, and streamlined billing systems. Tier 1 direct CSPs have better control over delegated admins who help manage your licensing and access to your cloud services.

Tier 2 CSPs work indirectly with Microsoft through third parties, often choosing this path due to its lower barrier of entry. Think of Tier 2 as resellers. You can expect their level of support to similarly correspond. Tier 2 indirect resellers have limited control over delegated admins due to distributors with a direct relationship with Microsoft. And, some organizations have security concerns with a large number of delegated admins.

Using the Tier 1 direct CSP partner program, you can spend less time figuring out the best ways to manage Microsoft’s cloud products and more time innovating and growing your business. You also get experienced Microsoft pros on your side, guiding you to get the most out of your cloud investment.

Types of Services That CSP Providers Work With

Your direct CSP cloud partner can help you integrate and manage licenses across a variety of Microsoft cloud tools, including:

• Microsoft 365. This gives you familiar tools like Word, PowerPoint, Teams, and Excel, along with cloud services such as email, Teams, OneDrive, and SharePoint.
• Azure cloud services. Azure enables you to implement cloud infrastructure, platforms, and software-as-a-service (SaaS) options. There are huge savings opportunities of up to 40 percent or more, and your direct CSP can assist you by optimizing licensing strategies and using reserved instances.
• Dynamics 365. Dynamics 365 consists of a suite of tools used for customer relationship management (CRM) and enterprise resource planning (ERP).
• Other Microsoft Cloud solutions. You can also access Microsoft’s security, data analytics, compliance, and other tools. It all depends on what your CSP offers and the services you need.

CSP: Different From Direct Purchasing

In many cases, a direct CSP gives you significant advantages over purchasing from Microsoft or a reseller. For example, you get:

• Services to help you get the most out of your cloud solution. You wouldn’t normally get value-added services directly from Microsoft. But with a direct CSP, you get help with implementing your solution, migrating elements of your existing infrastructure, and continual management of your new system.
• Help with staying compliant. This reduces the risk of unexpected costs associated with adhering to regulations, losing discounts, or dealing with service restrictions.
• A support structure. With a direct CSP, you gain direct access to pros with advanced technical expertise in dealing with issues and optimizing the effectiveness of Microsoft’s cloud tools. Your CSP also provides support options, such as Advanced or Premier Support for Partners.
• Flexibility in scaling. Your direct CSP can adjust your license and the services you use based on your changing needs. Because a CSP provides flexible scaling, it’s easier to optimize costs. Instead of having to pay for services you don’t need, you only pay for what you use because your direct CSP aligns your licensing with your business goals.

To truly transform your operations, you have to understand the benefits of working with a direct CSP partner.

Key Benefits of Working With a Direct Microsoft CSP Partner

By working with a direct CSP partner, you streamline your implementation and shorten your adoption runway, enabling a smooth and fast takeoff.

Simplified License Management and Billing

Direct CSP partners give you much more flexibility when it comes to choosing the right license and payment options. For example, you can get:

• Monthly billing options. Instead of paying a hefty sum upfront for a full year of access, you can divide your annual payments into monthly installments. Starting April 1, 2025, Microsoft is charging a five percent premium for monthly billing with annual commitments. Your CSP can help you with the different options and optimize your licensing to minimize extraneous costs.
• Scalable licensing. You gain the ability to scale your licenses up or down to pay for what you need as your business evolves. For example, if you acquire another business unit, you can quickly scale up to accommodate the additional users. Or you can schedule a cutback on your anniversary date if a certain license is underused. You can also mix and match month-to-month versus annual commitments for things like seasonal, temporary or contract employees.
• Consolidated invoicing. If you use more than one Microsoft cloud service, you don’t have to pay multiple invoices at different times of the year or month. Instead, your CSP partner can consolidate all payments into a single invoice. You also have the option to break out your invoices to different subsidiaries, divisions, cost centers, and more.

Enhanced Support and Expertise

The level of support and individual attention an organization gets with a direct CSP partner is one of the most significant benefits, especially because it’s a huge time saver.

For example, suppose you want to use Azure but are unsure how to go about licensing and assigning users, not to mention which security settings or tools you should use. You don’t have to spend hours rummaging through Google or Bing to find an answer. Simply call up your CSP provider, tell them what you need, and let them guide you to a more secure infrastructure.

The CSP partner also gives you a second set of eyes on your licensing purchases to avoid duplicate products and features by recommending an upgrade, licensing bundle, or a-la-carte option as an alternative.

In addition, your provider may also assist you in training your IT team and staff to use the tools you purchase. They can set up group or individual training sessions and check in periodically to see if employees need extra help.

Many CSPs also offer optional managed services, which give you dedicated time every month for your cloud journey and peace of mind for things like backup and recovery.

Business Growth and Optimization

Whether you’re scaling, trying to optimize licensing costs, or performing an intricate integration, your direct CSP partner can be an invaluable resource.

One example that is always top of mind is security. Your CSP can help to make sure you are using the best security practices while maintaining ease of use. Multifactor authentication (MFA) is one example of that. Others would be anti-phishing tools and a desktop antivirus or antimalware solution that integrates with your Microsoft 365 security dashboard in your tenant. Microsoft recently announced that it is using AI-based security tools such as Copilot.

Or, suppose you need to onboard a remote sales support team and want to use Dynamics 365 as a digital enablement hub for your in-house and remote teams. However, you don’t know how to structure Dynamics 365 so that all team members can work seamlessly together.

No worries. Your CSP has you covered. They can design an optimal solution that unifies your teams and makes sure they use Dynamics 365 to the fullest. Your CSP can also connect your sales support teams with your field salespeople, ensuring they can exchange crucial information in real time through Dynamics 365.

Now that you understand some of the benefits of partnering with a CSP, let’s dive in to how to identify the best partner for your business.

Choosing the Right Microsoft CSP Partner

The partner you choose should bring a mix of:

• Technical expertise and certifications. Your provider should have an experienced team with the certifications or resume to showcase their ability to add value to your implementation clearly.
• Industry experience. You want a CSP that has experience in your specific industry. For instance, an Azure implementation for a financial services company may look very different than one for a hotel.
• Support capabilities. The right CSP will provide ongoing support, not just help with getting you set up. So, you’ll want to ask about the kinds of support they offer and their operating hours.
• A track record of success. While choosing a CSP, you may want to steer clear from new kids on the block. Your CSP should be able to provide references and case studies exemplifying their expertise.

To weed out unsuitable options, you should ask questions about their response times after getting support requests. This will tell you a lot about the kind of service — and speed — you can expect.

Remember, when choosing a CSP, their tier level can also significantly impact your business outcomes. You should ask about the nature of their relationship with Microsoft — direct versus indirect — and adjust your expectations accordingly.

You can also inquire about how they would implement your solutions given your business requirements and what kind of training they can provide your staff.

Questions about industry-specific experience are especially helpful. Don’t hesitate to ask detailed questions about the kinds of challenges they’ve been able to overcome for other organizations in your industry. Ask whether they’ve provided similar implementations to help other companies achieve goals similar to what you’re striving for.

It’s also important to ensure your CSP is upfront about helping you optimize your licensing mix while minimizing costs. Some may not understand the intricacies of the different bundles and a-la-carte options and default to the most expensive comprehensive E3 or E5 license bundle.

Your CSP should understand these options and be able to recommend the right licensing not only now, but in the future as your cloud needs change. Other considerations are ways your CSP can help you benefit from incentives and discounts.

For example, the Microsoft Partner program incentivizes CSPs to sell Microsoft cloud services by offering them discounts and limited-time promotions on licensing. Some direct CSPs may be willing to pass down these savings to you, the customer.

CSP Red Flags to Watch Out For

You want to make a careful, pragmatic decision, so if you see any of the following red flags, you’ll want to consider another option:

• Limited Microsoft certifications. Each certification provides evidence of expertise, so a lack of certifications could indicate inadequate experience.
• Unclear support structure. You want a firm, clear commitment to the kind of support you’ll need, including knowing how long your CSP takes to respond to requests and how they manage costs.
• Poor communication. If they don’t return calls or emails in a timely fashion while you’re in the exploratory phase, they’ll probably follow the same pattern once you start your partnership.
• Limited service offerings. If you’re looking to streamline both license and service management, the kinds of services they provide need to match your requirements.
• Tier 2 status. If dedicated support is important to your organization, you may want to avoid the relatively hands-off, reseller relationship that a Tier 2 CSP model offers. If you are considering a Tier-2 CSP partner, you may want to inquire about which distributor they use and the number of delegated admins who have access to your tenant.

The CSP you choose will have a significant impact on your overall journey to cloud success.

Get the Best CSP for Your Needs

By working with a direct Microsoft CSP, you get experienced professionals who understand how you can get the most out of your cloud licensing mix. You also get dedicated support, which can be essential when you hit snags, want to explore your options, or need to scale.

To evaluate your next CSP partner, contact us. Our Microsoft experts understand the ins and outs of each cloud tool and are experienced in helping customers optimize and manage their licenses across a broad range of business scenarios.

Let’s talk