How do Microsoft Azure CSP subscriptions work?
A Cloud Solution Provider, or CSP, is the company that provides businesses with cloud-based infrastructure, networks, and...
An Azure Cloud Solution Provider (Azure CSP) is a Microsoft partner that provides customers with Azure infrastructure/services or custom applications hosted in Azure.
Microsoft has set out the Azure CSP programme to offer Microsoft’s software as well as bundle their own custom software and professional services. As part of the program, partners are able to provision and bill their services/software as they see fit.
The obvious drawback of this is that the pricing you receive from the partner can be quite opaque.
Azure is gaining momentum and has accelerated throughout the pandemic and is a priority for Microsoft.
"Cloud is just emerging, but it's high growth." - Satya Nadella Microsoft CEO
Azure CSPs provisions bundles of services in the Azure cloud. Utilising the Azure platform, these services can be deployed and accessed all over the world. Services that Azure CSP partners offer fall into the areas below:
Microsoft delegates certain functions to an Azure CSP including support and billing of Azure. This means you have no direct relationship with Microsoft and your Azure partner provides your Azure services. This lock-in has been recognised by Microsoft as a potential problem for end customers so they are making revisions to how the Azure CSP programme works to make migrating away from a particular Microsoft Partner easier.
Direct Azure CSP partners purchase directly with Microsoft. These resellers purchase Azure from Microsoft and then resell it to their customers at a margin. Their customers are often tier 2 partners and also end customers.
Becoming a tier 1 Azure CSP partner is a lengthy and complicated process and can take upwards of six months.
There are several pre-requisites:
Typically, Tier 1 partners are usually larger enterprises that specialise in reselling their services or licences and there are only a handful in each area. For example, in the UK the main resellers for Azure are Rackspace, Bytes, Grey Matter, Softcat & Ingram Micro
By far the most common Azure CSP partner is a tier 2 partner. These partners often purchase from the tier 1 partners the bundles they need for each customer and pass those services on.
To become a tier 2 partner is a much shorter process as they are not purchasing SKUs from Microsoft. The tier 1 partner often offers other benefits to the customers such as business portals, billing mechanisms, credit control, support etc… This is why this model is the most common method for partners.
This arrangement often suits independent software vendors and Microsoft service partners as they can accelerate their cloud offering and get it to market as soon as possible.
However, this still has elements of lock-in to the tier 1 & tier 2 partners which need to be understood and managed.
Purchasing your Azure services through a CSP partner could be the best fit for your business situation, but many businesses don’t even realise that they are buying it this way. At the very least you should know what mechanism you procure your Azure infrastructure/services on and how this could affect your business if you wanted to move.