CSP — Cloud Solution Provider
Category: licensing
Last reviewed by the MSLicenseHub Licensing Desk.
The Cloud Solution Provider (CSP) program is a Microsoft licensing channel that allows authorized partners to bundle Microsoft cloud services with their own value-added services. Under this model, the partner owns the end-to-end customer relationship, acting as the primary point of contact for procurement, monthly or annual billing, and technical support.
Operational Mechanics and Service Scope
In the CSP model, Microsoft provides the underlying cloud infrastructure and software (such as Microsoft 365, Azure, and Dynamics 365), but the partner manages the tenant. This differs from "Direct" or "Web Direct" purchasing, where a customer buys via the Microsoft website and pays Microsoft directly. The CSP program is divided into two tiers:
- Direct Bill Partners (Tier 1): Large partners who purchase services directly from Microsoft and have their own robust support and billing infrastructure.
- Indirect Resellers (Tier 2): Smaller partners who work through an Indirect Provider (Distributor) to provision licenses and support customers.
Key Licensing Rules and Flexibility
Under the New Commerce Experience (NCE) framework, CSP offers two primary commitment paths. The Monthly Subscription allows for seat counts to be increased or decreased at any time, providing maximum flexibility for seasonal workforces at a 20% premium. The Annual or Multi-Year Subscription provides price protection for the term duration but restricts the ability to reduce seat counts until the renewal window.
Unlike the Enterprise Agreement (EA), which typically requires a minimum of 500 users/devices, CSP has no seat minimum, making it the primary vehicle for Small and Medium-sized Businesses (SMBs) as well as many large corporate entities that prefer decentralized billing.
Common Misunderstandings
- Support Responsibility: A common misconception is that Microsoft provides the primary support for CSP licenses. In reality, the CSP partner is contractually obligated to provide "Level 1" support. Customers cannot bypass the partner to open tickets with Microsoft unless the partner facilitates it.
- Ownership of Data: While the partner manages the subscription, the customer retains full ownership and administrative control over their data within the tenant.
- Azure Pricing: Azure in CSP uses the "Azure Plan" pricing model. While list prices generally align with the Microsoft website, partners may apply managed service fees or credits (Partner Earned Credit) that affect the final invoice.
Terminology and Related Terms
| Term | Relationship to CSP |
|---|---|
| NCE (New Commerce Experience) | The technical platform and set of rules governing how CSP licenses are currently purchased and renewed. |
| MCA (Microsoft Customer Agreement) | The evergreen legal contract that customers must accept to purchase through the CSP channel. |
| EA (Enterprise Agreement) | The traditional high-volume licensing program; CSP is often seen as the more agile alternative to the EA. |
Practical Note: What this means when buying
When reviewing a quote, look for the term "CSP" or "NCE" alongside the product name (e.g., "Microsoft 365 Business Premium - NCE Annual"). Be aware that your choice of partner is critical, as they become your sole source for technical troubleshooting and billing disputes. If you wish to switch partners, you can usually do so, but you may be locked into your current seat count until your existing annual commitment term expires. Always verify if your quote includes a "Monthly" or "Annual" commitment, as this dictates your ability to scale down costs during the year.
Need this in a quote?
Our team translates glossary concepts into concrete licenses, part numbers and price lists.
Request a quote