Microsoft EA vs CSP: Which Licensing Model is Best for You?
- HBS Microsoft Licensing Team
- Read Time: 4 mins
Microsoft licensing is complex. Choosing the right model is an important decision for your organization. The two most common options—Enterprise Agreements (EA) and Cloud Solution Provider (CSP) licensing—offer different benefits depending on your needs and size.
Enterprise Agreements have long been the go-to for large organizations, providing volume discounts and predictable costs over a multi-year term. On the other hand, the CSP model has emerged as a more flexible, scalable, and cost-effective alternative, particularly for businesses that need agility and personalized support.
We want to break down the key differences between the EA and CSP programs, comparing them side-by-side so you can better determine which best fits your organization.
Let’s explore the benefits of each, and what to consider when making your choice.
What Is Microsoft’s Enterprise Agreement (EA)?
Microsoft’s Enterprise Agreement (EA) is a licensing model designed for organizations often with 500 or more users (rumor is that minimum could raise to over 1,000 users) that want to license Microsoft products and cloud services under a single contract for a minimum of three years.
How an EA Works
- Organizations commit to a three-year contract with pre-negotiated pricing.
- Pricing is based on volume discounts, meaning larger organizations benefit from lower per-license costs.
- Once a year, companies can true-up, increasing their license count as needed—but reductions aren’t as simple.
- Azure services under an EA require upfront consumption commitments for predictable budgeting.
- Support comes via Microsoft’s Unified Support Agreement, which requires a separate purchase.
EA is best suited for large enterprises with stable IT needs, predictable license counts, and organizations that prefer long-term cost predictability.
Courtesy of Microsoft
What Is the Microsoft CSP Program?
The Cloud Solution Provider (CSP) program is a more flexible Microsoft licensing model, designed to allow businesses to scale licenses as needed and pay based on actual usage.
How CSP Works
- No long-term contracts: Businesses can adjust licensing month-to-month or commit to annual or multi-year terms.
- No minimum seat requirements, making it great for companies of all sizes.
- Pay-as-you-go model for Azure, eliminating the need for upfront commitments.
- Billing is handled through a CSP partner like HBS, offering predictable monthly invoicing.
- Support is provided by the CSP partner, so you get hands-on, personalized service.
CSP is an excellent option for businesses that need flexibility, personalized support, and scalable licensing options without the constraints of a complex multi-year agreement.
CSP Delivery: Direct CSP vs Indirect CSP Partners
When considering a CSP partner, you will find one of the two types:
- Direct CSPs: These partners transact your licensing directly from Microsoft. They are responsible for the full customer experience supported by robust internal operations that allow them to seamlessly manage your subscriptions, billing, and support in-house. Offering Tier 1/first line of support is a requirement of a direct partner. Direct CSP partners may offer a smoother experience as they can escalate licensing and/or subscription issues directly with Microsoft.
- Indirect CSPs: These partners transact your licensing through an intermediary called a “distributor”. This model is useful for partners who may not have the in-house capability to manage your subscriptions, billing, or support in-house. Initial support requests could be handled by the distributor themselves.
By choosing a Direct CSP like HBS, you gain access to personalized support, simplified billing, and a partner who understands your business needs—without the reliance of a third-party.
Question to Ask When Choosing Between EA and CSP
- How often do you need to adjust licenses? If your workforce fluctuates, CSP provides the flexibility to scale as needed.
- Do you need upfront price predictability? If long-term budget stability is your priority, EA’s locked-in pricing may be beneficial if your size and consumption qualify you for one.
- How do you prefer to manage support? EA requires a costly Unified Support Agreement with Microsoft, while CSP includes hands-on partner support at a lower cost.
- Are you leveraging Azure? CSP allows you to pay for Azure as you go, while EA requires an upfront commitment.
EA vs CSP: Side-by-Side Comparison
A key difference we should point out is that EAs involve a relationship between a customer, a Microsoft seller, and one of fewer than 10 Licensing Solution Providers (LSPs) in the U.S.
In contrast, CSP agreements are managed directly by the CSP partner, offering more flexibility and personalized service.
Why CSP Is the Preferred Choice for Most Organizations
For organizations that need agility, cost control, and dedicated support, CSP is Microsoft’s go-to model for transacting cloud products and Azure services.
CSP is best for:
- Businesses that require scalable licensing without long-term commitments.
- Organizations looking for predictable monthly costs without upfront financial burdens.
- IT teams that want personalized, partner-led support rather than Microsoft’s standardized support agreements.
- Companies that need on-demand Azure consumption without pre-committed spending.
Enterprise Agreements still have their place, particularly for very large organizations with stable IT needs and the ability to negotiate favorable volume discounts. However, for most businesses, CSP offers a more adaptable and cost-effective solution.
Make the Move to CSP with HBS
At HBS, we help organizations optimize their Microsoft licensing strategy—whether that means building your Microsoft environment from the ground up with CSP, transitioning from EA to CSP, or even maintaining an EA with supplemental CSP services.
Let’s talk. Reach out today to explore how CSP can simplify your licensing, reduce costs, and provide the flexibility your business needs.
