The End of Enterprise Agreements: How to Seize the Opportunity
As is often the case with Microsoft, the answer to this question is unfortunately ambiguous. It is not clear to whom this will apply, but it is evident that the change might come sooner than expected.
You should be ready, as Microsoft is gravitating towards and pushing for the Cloud Solution Provider (CSP) model for small and midsize customers (SMC).
What Do We Know from Microsoft's Announcement on 12th November, 2024?
After a brief period of rumours, Microsoft released a blog post where they stated the following:
“Beginning January 1, 2025, a small percentage of cloud Enterprise Agreements (EA) in direct markets will no longer be eligible for renewal under the existing EA framework. In January 2025, we will begin notifying these affected customers that renewal on the EA is no longer possible.”
While this statement is somewhat ambiguous, it represents the first step toward phasing out EA agreements and promoting the Microsoft Customer Agreement for Enterprise (MCA-E) or CSP. That said, we can expect further updates as Microsoft’s fiscal year-end approaches on June 30, 2025—a period often marked by significant announcements and changes that may impact the calendar year
Read the full Microsoft Article here
What Changes Could This Mean for Your Customers?
If your customers fall into the group that will not be allowed to renew their EA agreements, they may have two options. According to Microsoft:
“For enterprise customers, the Microsoft Customer Agreement for Enterprise (MCA-E, the digital evolution of the traditional EA), will provide the optimal, streamlined solution. For SMC customers, the recommended options are CSP or MCA-E. Customers seeking a value-added services and support experience through a partner should choose CSP.”
If you are not familiar with the MCA-E, it might represent a loss of benefits and an increase in price for your customers. Here are a few reasons:
Software Assurance: In MCA-E and CSP, which are both based on the same Microsoft Customer Agreement, all enterprise-grade licenses are subscription licenses. There is no Software Assurance renewal.
Microsoft 365 Subscriptions with Teams: Renewing legacy Microsoft 365 subscriptions with Teams in MCA-E or CSP may be impossible, forcing you to purchase Teams separately and increasing the subscription cost.
The message is clear: for SMC customers that are not able to renew the EA or even for new customers, CSP is where Microsoft wants you to operate.
How Should You Prepare as a Microsoft Partner and See It as an Opportunity?
As the end of the EA is inevitable, you should be prepared to operate within the CSP world under the MCA. Although this might be unwelcomed news for some Microsoft customers, you can seize the opportunity to acquire new customers. Here are a couple of reasons why:
- Flexibility: For those transitioning from EA to CSP, you can provide them with more flexibility to adjust to their organization and business growth.
- Simplified Purchasing Experience: You can own the process, creating an all-in-one relationship with your customers, from your own services to license management, with more periods to negotiate.
- Revenue Growth: If you are an expert within the CSP, your total addressable market (TAM) has never been higher, representing significant revenue growth for you. Customers who have been tied up with Microsoft (3-year contracts) or with other partners can switch to you at any time.
At CloudCockpit, we have been operating with CSP since its early days. Our partners have seized this opportunity, and it is inevitable if you want to provide high-value, quality service to your customers you would benefit from having a platform that offers much more than what Partner Center is able to provide.
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