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Microsoft Customer Agreement: Everything you need to know

Microsoft is set to offer organisations seeking digital transformation with the cloud a new way to purchase Azure services, beginning as early as March 2019 - and will fundamentally shake-up the way businesses around the world manage their Azure Cloud licensing model and ongoing costs.

The Microsoft Customer Agreement (MCA) was initially announced on January 10, though it seems to have gotten little notice. This is despite the major change it brings to the way SMB organisations and even larger enterprises buy into the Azure Cloud ecosystem. We round up all the details you need to know about the MCA, and whether it or other existing options such as Cloud Solution Provider (CSP) are your best pathway forward into Azure.


What is the Microsoft Customer Agreement (MCA)?

The Microsoft Customer Agreement (MCA) is the new primary method for small and midsize (SMB) organisations to purchase Azure services. The MCA is a perpetual contract that does not expire for Azure transactional purchases, and allows buyers to customise specific purchases.

The new purchasing agreement is currently already used for any cloud services bought via the Microsoft Store for Business. From March, it will also be used for all Azure purchases that are completed directly via Microsoft itself. Businesses additionally can “add Azure Plan for pay-as-you-go (PAYG) purchasing with no upfront commitment”, according to the official FAQ.


Who is eligible for the Microsoft Customer Agreement?



Microsoft currently determines the eligibility of customers who will be able to move Azure purchases to the new Microsoft Customer Agreement model, and the Azure portal.

Organisations already on Azure will get an email from Microsoft sent to their administrator to invite them to move their purchases to the Microsoft Customer Agreement model - once their existing licensing agreement is up for renewal.

New eligible customers that want to buy only Azure services will be assisted by Microsoft sales representatives directly via the new MCA. However, that doesn’t eliminate Cloud Solution Provider (CSP) partners, who will continue to help businesses secure extra value from their purchase with additional presale and post-sale solutions combined with Microsoft services.

Haven't get an email or call? If you are not invited to MCA by a Microsoft sales representative, it means you're not eligible based on geography or customised elements of the terms and conditions of your existing Azure purchasing agreement.


How is the existing Azure purchase experience changing?

The introduction of the Microsoft Customer Agreement means Azure services are now primarily bought and managed directly by Microsoft via a fully digital agreement, rather then mostly through re-seller account managers as was done in the past. The basic process is as follows:

  1. Eligible organisations contact a Microsoft sales representative and select the Azure services they want to purchase.
  2. The organisation accesses and signs the heavily streamlined, all-digital MCA.
  3. The purchased Azure services are now ready to be used.

The Azure digital purchasing experience now includes a single-offer catalogue that contains 1st and 3rd party Microsoft products and services via a new online marketplace interface. The MCA itself is a streamlined, 11-page contract that is also “presented, accepted and stored” digitally.

The MCA also aims to unify the purchasing and management associated with the buying process. Organisations that continue to buy Azure services through partners, via their Microsoft account teams or via the new web portal will all have the same consistent purchase experience.


How does this affect organisations already in Azure Cloud?



The MCA is touted as handing over more control to organisations over their own Azure services, and targeted towards companies that don’t need administrative support for their purchasing journey - something that the existing Enterprise Agreement (EA) and Azure-only Server and Cloud Enrolment (SCE) offers. It promises an easier and faster way to buy and consume Azure.

However, if you’re currently on an EA or SCE, the introduction of the MCA in March 2019 means you will need to start buying Azure products and services through this new model once your previous agreements expire. Azure-only Server and Cloud Enrolment will soon cease to exist.

Other sites have pointed out that organisations on an SCE agreement can opt for the extended term that gives one extra year of monthly access to Azure and Microsoft online services, which are billed quarterly at current RRP consumption rates plus 3% in extra admin fees. However, they will have to move over to the Microsoft Customer Agreement purchasing model eventually.


Why are they changing how Azure Cloud services are bought?



According to Microsoft, the introduction of Microsoft Customer Agreement is based on making the "licensing transaction process easier, more efficient and simpler” by:

  • Automating the entire purchasing process via a digital experience, with less admin work.
  • Offering a more flexible billing and policy management system that can be managed at a department or organisation level.
  • More accurate and consistent Azure consumption tracking.
  • Removing expiry without a new signing event required when adding services.
  • Allowing customisation for added third-party offers from the Azure Marketplace.

It comes down to eliminating or reducing agreements and portals and the time it takes to actually get going with Azure. The streamlined direction will ultimately help Microsoft get more customers through the door with less processing roadblocks. In turn, it looks like customers will get the added benefits of service agreement customisation, a direct line to Microsoft reps and all-round less administrative tasks to get into the Azure Cloud.

Despite the change, the MCA will not be the only Azure Cloud purchase pathway available to organisations going forward. As the official Microsoft FAQ explains, you can still opt to buy Azure products and services through Cloud Solution Providers (CSP) via a Microsoft partner.


What about Cloud Solution Providers (CSP)?



MCA offers significant streamlining benefits for Azure customers in 2019, especially those that already have strong cloud maturity as an organisation. However, for many businesses that require more hands-on support and optimisation, CSP is the more highly recommended option.

The benefits of procuring and consuming Azure via a partner-managed service, such as through Xello, is well documented - for a refresher, here are some of the main benefits of using a CSP:

Single-point of local support: CSPs offer end-to-end support and governance of your organisation’s cloud lifecycle, meaning you don’t have to deal with multiple vendors to achieve the results you need. We’re your single point of contact for both billing and technical assistance, and your local expert consultants that can escalate support cases to Microsoft on your behalf.

Extra cost-savings: As Microsoft partners, CSPs also offer significant discounts off the list price of Azure products and services, along with additional cost-savings and benefits tied to their own unique and bundled IP solutions. It’s also much more competitive in pricing compared to direct purchases and Enterprise Agreement.

Consolidated billing and monitoring: CSP support includes extensive detail into your billing and spending in Azure, using the continuous monitoring capabilities of the cloud platform to keep costs under control, optimise your environments and spending and ensure consumption is always available to review by both IT and key-decision makers in your business.

The CSP program ultimately allows experienced and customer-focused Microsoft partners to work directly with organisations buying into Azure and help them manage their entire cloud lifecycle. They can directly provision, manage, optimise your subscriptions with Azure, and offer deep cloud expertise and support for businesses who aren't as cloud mature or would rather leverage the additional support capabilities CSPs can provide - on top of the cost-savings they're already getting with Azure.


Why should I go with a CSP for Azure?

Do you require external expertise in guiding your Azure purchase? Xello is one of Melbourne's leading CSPs that can help you get the move to Azure right the first time.

For further reading on the right pathway to Microsoft Azure, we recommend downloading our Azure MasterPlan white paper. This free report explains why realising long-term business growth, maintaining compliance and optimising your organisation's pathway into Azure Cloud is only possible with a documented strategy with the right architecture, governance and framework - and how CSPs such as Xello help you move your business into Azure the right way.

Tags: Azure Cloud, Microsoft Customer Agreement, Cloud Service Provider, Managed Services