Microsoft CSP Program Changes: Five Things To Know
Customers must have ‘the utmost confidence that they are selecting a partner and provider that can deliver all the value that they need for the entirety of their business, including AI transformation,’ says Microsoft Chief Partner Officer Nicole Dezen.
Nicole Dezen, Microsoft’s chief partner officer and corporate vice president for the Global Partner Solutions organization, told CRN in an interview that all the changes are “designed to fuel growth in the small and medium enterprise customer segment through our partners,” with eligibility updates meant to give customers “the utmost confidence that they are selecting a partner and provider that can deliver all the value that they need for the entirety of their business, including AI transformation.”
The upcoming three-year contract term option was much demanded by partners, Dezen said.
“There are many customers that are comfortable and accustomed to making three-year commitments to Microsoft through the Enterprise Agreement,” she said. “And so this made so much sense to be able to have a set of CSP SKUs that can also meet those customers’ needs.”
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Microsoft Partner Program Changes
The changes notably come following Microsoft’s latest quarterly earnings call April 30, during which CFO Amy Hood pointed to improving but continued work on what she called “scale motions” involving Microsoft’s vast partner ecosystem of more than 500,000 members.
“We’re encouraged by our progress,” she said. “We’re excited to stay focused on that as, of course, we work through the final quarter of our fiscal year.”
Here’s what you need to know about the changes.
CSP Program Requirement Updates
On Oct. 1, Microsoft will introduce new authorization requirements for direct bill partners, distributors and indirect resellers.
Resellers see the fewest changes, with one being Microsoft’s enforcement of at least $1,000 in trailing 12 months (TTM) billed revenue at the tenant level, according to the vendor.
For newly enforced CSP requirements, Microsoft will conduct enforcement during the anniversary month of the partner’s first tenant authorized.
Resellers must also have a Partner Center security posture score of more than 80 points. Partners doing the following receive 20 points per action: enabling multifactor authentication for administrative roles, providing a security contact accountable to security issues in the partner organization, and requiring multifactor authentication for administrative roles in the customer tenant.
Partners putting a spending budget on all Azure subscriptions and responding to alerts within 24 hours of appearing in Partner Center receive 10 points per action.
Partners who miss eligibility starting Oct. 1 will no longer be an authorized CSP partner, face off-boarding and deauthorization and have the option of reapplying in 12 months.
Starting Oct. 1, direct bill partners that switch to indirect reseller status and still don’t meet eligibility can reapply 12 months after application denial, according to Microsoft.
CSP Direct Bill Requirements Changes
More requirements are coming for direct bill Microsoft partners come Oct. 1. The $300,000 TTM revenue at the partner global account level will increase to $1 million.
These partners will now need to pass an annual, automated assessment measuring operational capabilities, sales capacities, customer support practices and compliance frameworks. The assessment has been active this Microsoft fiscal year for new and geographical expansion partners.
Direct bill partners will need at least one “solutions partner” designation to continue under this category. The six solutions partner designations for services providers are in business applications, Microsoft’s “modern work” suite, security, data and AI, digital and app innovation and infrastructure.
These partners will also need active Advanced Support for Partners or Premier Support for Partners plans. For the current fiscal year, Microsoft has enforced active plans at partners’ initial on-boarding. In the next fiscal year, plan status will be enforced annually.
Advanced Support for Partners, which starts at $16,500 a year, brings resources for Microsoft cloud products, including cloud consults and optimization reports and pooled account management, according to the vendor.
Premier Support, which doesn’t have a starting price listed, adds in managed support across the full Microsoft platform, with resources for hybrid and on-premises products and services. On-site support is an added option, as is personalized time with a premier field engineer for deployment and migration and a designated account manager, among other benefits.
Microsoft also said that in fiscal year 2027, direct bill partners will need to achieve the “support services” designation, which will replace the support practice pillar of the annual assessment.
Like resellers, direct bill partners will need to show a Partner Center security score above 80.
Direct bill partners that don’t meet eligibility thresholds by Oct. 1 can switch to an indirect reseller authorization. Customers will remain associated with this partner until their assessment and eligibility decision date, according to Microsoft.
For direct bill partners missing eligibility thresholds on the annual reassessment date, Microsoft will tell associated customers that their partner was deauthorized and provide instructions for how to find a new reseller.
CSP Distributor Requirements Overhaul
Microsoft will put the minimum TTM revenue requirement for distributors at $30 million per authorized region as part of the program requirements starting Oct. 1.
Like with direct bill partners, Microsoft will also start enforcing an active support plan—either Advanced or Premier Support for Partners—and passing an annual assessment.
A Microsoft distributor designation that entered preview in the last quarter of the current fiscal year will become generally available in the first quarter of fiscal 2026.
As with direct bill and reseller partners, distributors will need a Partner Center security score above 80 once the new requirements start.
New Three-Year Subscription Term
Microsoft plans to launch three-year subscription offers for its E3 and higher-priced E5 licenses on June 1, with three-year subscriptions becoming available July 1 for Microsoft 365 E5 Security and E5 Compliance mini suites.
Partners have the ability to change subscription terms in the middle of a commitment or at renewal, according to the vendor.
On June 9, Microsoft will launch a 10 percent discount promotion for three-year terms selected by customers new to E3 or E5 on CSP. The discount applies to up-front and annual billing options and customers who buy at least 100 licenses but less than 2,400 licenses. The plan is for the promotion to run through Dec. 31.
The promotion for the E5 Security and E5 Compliance mini suites starts July 1 and runs through the end of 2025 as well. It applies to up-front and annual billing options and customers with at least 100 licenses but no more than 1 million licenses.
Three-year terms will be available to Microsoft 365 subscription bundles without Teams, the stand-alone Teams Enterprise offer and M365 bundles with Teams customers were able to buy or renew before the package went end of sale to appease antitrust concerns in Europe. Buyers need to pay up front, once a year or once every three years, according to the vendor. And they need to buy at least 100 licenses.
In a document explaining the three-year term offer, Microsoft said that these terms should incentivize longer-term relationships for customers that want to leave on-premises, hybrid or Office 365. Partners should also find new upselling opportunities under these terms.
Three-year terms offset the costs of acquiring, adopting and administering larger customers with more complex IT environments. And partners should have the ability to make better pricing offers “to switch customers from competing cloud providers,” according to Microsoft.
The longer terms should also help partners with cross-selling, seat growth and other revenue opportunities, including project, advisory and managed services.
Customers leaving Enterprise Agreements for CSP ones might like the option to maintain three-year terms, according to Microsoft.
Partner Center Reporting Option
In June, Microsoft will add an option for reporting net paid seat adds in Partner Center to better help partners gain visibility into their install base.
Partners will have the same performance metrics Microsoft employees can see internally, according to the vendor.
The capability comes after other recent advancements made in Partner Center, including an AI-powered automation for midterm upgrade channel transfer interfaces for partners moving expiring EA offers for Microsoft 365 E3 and E5 with Teams and Office 365 E1, E3 and E5 with Teams into CSP.