Blog

Discover the pros and cons of the purchase models by Microsoft cloud

For all entrepreneurs ready for the next step, for example, in Azure or Micorosft 365 solutions, there is an appropriate purchase model. Microsoft uses different models, each with its advantages or disadvantages. We list them for you.

Published: 05 October 2022

Are you planning to use Microsoft's cloud solutions? Or do you use these cloud services and wonder which purchase model of Microsoft licenses suits you best? You can purchase cloud services such as Microsoft Azure, Office365, and Dynamics differently. For example, through the Pay as You Go Model, which is paid for by credit card, an Enterprise Agreement, and the Cloud Solution Provider (CSP) program or MACC. The terms and cost structures can make the purchase models very complex.

All licenses have their advantages and disadvantages. We list the most important ones for you.

  1. Pay-as-you-go;
  2. Enterprise Agreement;
  3. Cloud Solution Provider;
  4. Microsoft Azure Consumption Commitment

 

Pay-as-you-Go, direct, or Creditcard

We'll start with the simplest way to pay. You go to Microsoft's website, put products or services you want in a digital shopping cart, link your credit card and pay. This is what we call: pay-as-you-go or direct.

  • Benefit: You get immediate convenience from the services and can get started. This makes it an easy way to start using Microsoft cloud services.
  • Disadvantage: You always fall into the highest price category with a credit card. You pay the list price. You also miss an expert who gives you tips and tricks, and you don't have a sparring partner who understands the business you can fall back on. Also, a credit card structure is challenging to scale. What if your credit card limit has expired? However, these days you can pay via an invoice when you get to a certain amount. 

Organizations looking for flexibility should look elsewhere.

 

Enterprise Agreement


A somewhat older variant, and already outdated, is the Enterprise Agreement. In an Enterprise Agreement, you commit yourself for a certain period (3 years) and a certain amount to the services of Microsoft. Remember that you must have at least 500 workstations (commercial) and 250 workstations (non-commercial). This variant is particularly attractive for larger companies that like to purchase centrally.

  • Benefit: you can purchase on a large scale and receive support from Microsoft with an Enterprise Agreement. Also, you can agree on discounts and rules. Do you have questions or problems? Then you are quickly helped on your way.
  • Disadvantage: You are tied to a specific use for a more extended period. If you do not purchase this, you lose the amount. Unless you use more, then you pay the agreed amounts.

 

Cloud Solution Provider (CSP)

The third variant, the relatively new but fastest growing of all, is CSP: Cloud Solution Provider. CSP is a subscription model that fits the nature of the Cloud exactly. You pay for what you use with no purchase and maturity obligation. CSP can be purchased in two ways, CSP Direct, and CSP Indirect. The choice depends on your use case. Indirect partners purchase their licenses through cloud distributors and resell them to their customers. CSP Direct partners purchase cloud services directly from Microsoft and support organizations with managed services. CSP Direct partners design, implement, migrate, and manage cloud solutions. As a result, they often have more knowledge and expertise in the services they offer.

  • Benefit: CSP is flexible and trustworthy. You can decide how many and which Cloud services to purchase. Today you can turn on services, only to turn them off again in two days. There are no consequences. You only pay for what you have used. This makes it cheaper. You can easily and quickly scale up if you need three times as much a week later. A Direct Partner also has a lot of expertise, and it is a great advantage that you can quickly resolve problems with them through support contracts. Finally, you benefit from various incentives and get a monthly bill based on your daily usage.
  • Disadvantage: Previously, you bought cloud services directly from Microsoft. Now you will purchase Microsoft's well-known cloud services through a CSP direct or indirect partner. An extra link in the chain possibly gives the feeling of additional costs and gives away margins unnecessarily. Instead, the opposite is true. You consume flexibly, according to your use, and with the right partner at a lower rate.

 

Microsoft Azure Consumption Commitment (MACC)

Microsoft itself recently came out with a new variant: MACC. A 12-month contract was entered into directly by Microsoft sales. The agreement was originally intended for organizations that wanted a transactive offer in Microsoft's marketplace. Nowadays, it is already being used more widely.

 

  • Benefit: A discount can be agreed upon with a considerable consumption (about 3000 euros per month). In addition, you get a discount on Microsoft support, and there are possible incentives.
  • Disadvantages: You are responsible for your Microsoft support contract and its costs. Discounts are often minimal, and you are not in direct contact with a technical sparring partner, so problems can take longer to discover and resolve.

 

Are you looking for a partner?


Are you planning on using cloud services from Microsoft? Or are you looking for a more flexible way to purchase cloud services? Or are you looking for a partner with the knowledge and skills of the Microsoft cloud?


Intercept is your Microsoft Partner. We were born in the cloud era and are Azure Expert MSP. We are Gold Partners. ISO 27001:2013 certified and deliver your cloud services most flexibly via CSP directly.

Ask about the possibilities or receive a free (price) comparison of your current cloud services.

CSP Subscription Model