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Microsoft CSP

EA is moving on. Here's how to seize the moment.

Mark Adams
by Mark Adams
13 min read
10 April 2026
EA is moving on. Here's how to seize the moment.
9:34

Microsoft's Enterprise Agreement has been the backbone of enterprise cloud licensing for decades. But the rules are changing. Not quietly, and not slowly. This post explains exactly what is happening, why it matters for CSP partners, and how to turn this structural shift into a genuine competitive advantage.

What is actually happening

In November 2024, Microsoft publicly confirmed what the channel had been speculating about for years. Beginning January 1, 2025, a portion of cloud Enterprise Agreements in direct markets became ineligible to renew under the existing EA framework. Microsoft started notifying affected customers in January 2025. The recommended paths forward are two: MCA-E for customers who want a direct relationship with Microsoft, and CSP for customers who want a partner-led service and lifecycle model.

CSP is, in Microsoft's own words, the "hero motion" for small and mid-sized organisations. That is a deliberate choice of language. Microsoft is signalling that the channel partner model is where it wants growth to go.

This does not mean EA is gone tomorrow. Our partners tell us the reality is messier. Timelines move. Some customers are still renewing into EA. Microsoft has extended some contracts. The transition is real, but it is uneven, playing out at different speeds across different customer segments and geographies.

What is not ambiguous is the direction of travel. Partners who wait for certainty before acting will find the opportunity has already been taken by those who moved earlier.

Cloudmore Partner, Q1 2026

"We keep hearing from Microsoft that they're going to retire EA anytime soon. But then timelines move and there are teething problems. It's a question of when, not if."

Cloudmore Partner, Q1 2026

The three agreements you need to understand

There are three buying constructs at the centre of this shift. Here is what they actually mean, without the jargon.

Enterprise Agreement (EA)

A three-year, organisation-wide volume licensing contract. The default for businesses with 500 or more users or devices since Microsoft raised the minimum from 250 back in July 2016. It offers consolidated purchasing and annual true-ups, but requires significant Microsoft involvement to negotiate and manage. It expires on a fixed term. It carries real contractual complexity. And for a growing number of organisations, it is no longer the most efficient route to Microsoft cloud.

One pattern our partners see regularly: customers running EA for Azure and CSP for Microsoft 365 in parallel. This hybrid state is common, and it creates an opening for a CSP-led conversation to consolidate and simplify.

Microsoft Customer Agreement (MCA)

A digital, simplified agreement that does not expire and carries no purchase minimums. Designed for cloud-native buying.

In direct Microsoft-led engagements, it underpins enterprise purchasing models such as MCA-E, suited to organisations with complex or unique licensing requirements that still want a direct Microsoft relationship.

When used within a CSP partner relationship, it forms the contractual foundation of the CSP model. Every CSP customer must accept an MCA before transacting, a requirement introduced with Microsoft's move to MCA-based commerce around 2020.

Cloud Solution Provider (CSP)

The partner-led model where the CSP owns the customer relationship end to end. Contracting, billing, provisioning, support, and managed services all sit with the partner. The partner sets pricing. The partner integrates Microsoft and third-party products into a single service proposition. Microsoft describes CSP partners as managing "all aspects of their customers' purchase, deployment, and use of technology across all stages of the customer lifecycle."

For direct-bill CSPs in particular, this is the model that gives you the most commercial leverage. You own the relationship. You control the margin. You decide what to bundle, what to charge, and how to differentiate.

How we got here: the documented timeline

This shift has been years in the making. Understanding the timeline matters for your own planning, and for the credibility it gives you in customer conversations. When you can show a customer the clear arc of where Microsoft has been heading since 2019, the January 2025 EA change does not feel like a surprise. It feels like the inevitable next step in a well-signalled journey.

2019
Oct
Microsoft Customer Agreement introduced into CSP. Azure plan launches.

The MCA replaces the older Microsoft Cloud Agreement for all CSP customers. The new commerce experience for Azure in CSP goes live November 1, 2019. MCA acceptance becomes mandatory for all CSP purchases and renewals from January 31, 2020.

2022
Jan
Seat-based NCE goes live. Microsoft 365, Dynamics 365, Power Platform and Windows 365 move to new commerce.

New subscription rules come into effect, including the 7-day cancellation window. New commercial seat-based orders are required in new commerce from March 10, 2022. Legacy renewals end from July 2022.

2024
Jan
Microsoft-led migrations begin for commercial legacy licence-based subscriptions.

Microsoft starts migrating remaining legacy subscriptions. Copilot for Microsoft 365 becomes available across all channels including CSP NCE. Public sector migrations follow in September 2024.

2025
Jan
EA renewal eligibility changes for a portion of cloud EAs in direct markets.

Customer notifications begin. Recommended paths: MCA-E for direct purchase, CSP for partner-managed lifecycle. A 5% pricing uplift for monthly-billed annual-term subscriptions also takes effect from April 2025 across CSP, MCA-E and direct online.

2025
Nov
Online Services pricing consistency update across EA price levels A-D.

Microsoft aligns EA online services pricing to Microsoft.com pricing. This removes a historic pricing advantage some EA customers held, narrowing the commercial gap between EA and CSP further.

2025
Dec
Partner-of-Record validation enforcement begins for distributors.

Partner Center enforces POR validation for new subscription orders and most updates to existing subscriptions. For EU and EFTA markets, all partner IDs on a subscription must meet validation requirements before updates are allowed.

Where the money concentrates

This is not a compliance exercise. It is a revenue opportunity. The workloads migrating out of EA are the largest in Microsoft's portfolio, and the CSP model is where partner economics are most differentiated.

$75B+ Azure annual revenue (FY2025). The single largest workload pool in the shift, and the one where CSP partner economics are most differentiated.
$20B+ Microsoft Security revenue. Fast-growing, deeply attached to M365, and part of every enterprise conversation.
$13B AI and Copilot annual run rate. Available in CSP NCE since January 2024 and growing rapidly across the partner base.
23% Dynamics 365 YoY revenue growth in Microsoft FY25 Q4. The business applications market is accelerating, not slowing.

Key operational constraints on EA-to-CSP channel transfers

  • Commercial SKUs only. Channel transfers support commercial licences. Partners wanting to continue public sector services from EA to CSP must use a manual purchase path instead.
  • Direct-bill or indirect provider access only. The transfer tool is only accessible to partners logged in as a direct-bill partner or an indirect provider. Indirect resellers cannot access it directly and must work through their distributor.
  • Customer must sign an MCA. The customer is required to sign a Microsoft Customer Agreement with the receiving CSP partner before the transfer can proceed.
  • Timing matters. Transfers should be sch

For Azure: the EA to MCA billing transition

For customers with Azure under an EA, the path is different. When a customer renews their EA enrollment by signing an MCA, their billing account structure changes. EA constructs (departments and accounts) migrate to MCA constructs (billing profiles and invoice sections). Microsoft confirms this transition does not interrupt Azure services. There is no downtime.

One point to communicate clearly to customers: once the EA-to-MCA billing transition is completed on Azure, it cannot be reversed. This is a one-way door. Customers need to understand that before they sign.

The NCE commercial framework

All seat-based licensing in CSP now operates under the New Commerce Experience. The key commercial rules every direct-bill CSP needs to know:

  • 7-day cancellation window. Licence reductions and cancellations must happen within 7 days of the order or renewal. After that, the partner is committed for the remainder of the term.
  • Term choices. Monthly, annual, and in some cases three-year terms are available. Monthly billing on an annual-term subscription carries a 5% uplift over annual upfront billing.
  • Add-ons require base licences. NCE add-on products such as Teams Phone calling plans have prerequisite dependencies. Your provisioning and quoting workflows need to handle these correctly at scale.
  • Seat increases can happen anytime. Seat reductions are term-locked after 7 days. The asymmetry here is where partners get caught out.

Azure economics under CSP: what you actually earn

One of the most important differences between EA and CSP for Azure is how partner economics work. Under EA, the customer and Microsoft negotiate pricing directly, and the partner's commercial role is largely advisory. Under CSP, the partner's economics are structured around the services they deliver and actively manage.

Partner Earned Credit

Partner Earned Credit (PEC) is the primary Azure economics mechanism for CSP partners who actively manage customer Azure environments. It is a daily credit applied to eligible Azure consumption under management, and it shows up as a reduction in the effective unit price on partner invoices. To qualify, the partner must hold 24/7 operational control and management over the customer's Azure environment. This is designed to reward genuine managed services delivery, not passive resale.

What PEC does and does not apply to

PEC applies to eligible Azure plan consumption where the partner holds management access and operational responsibility. It does not apply to Azure plan reservations, Azure savings plans, Microsoft Marketplace purchases, or telco overages.

Understanding these exclusions matters for accurate margin modelling, particularly for customers who are heavy users of reserved instances or savings plans as a cost optimisation strategy. These are common in EA environments and are frequently part of the migration conversation.

Azure subscription transfers between CSP partners

When you win a customer whose Azure is already under another CSP, Microsoft provides a transfer mechanism for Azure subscriptions, reservations, and savings plans. The customer must sign an MCA with the new partner. Access to the transfer tool is limited to direct-bill partners. Indirect resellers must work through their indirect provider to initiate or accept transfer requests.

The Marketplace opportunity

Microsoft's Azure Marketplace is the fastest-growing procurement route in the Microsoft ecosystem. Analyst projections put hyperscaler cloud marketplace software sales at $163B by 2030, up from $30B in 2024. For CSP partners, two commercial mechanics are worth knowing:

  • CSP private offers. ISVs can set specific margin and duration terms for CSP partners, creating wholesale pricing for resale. This enables you to bundle third-party SaaS into your CSP proposition with a defined and predictable margin.
  • MACC contribution. Eligible Azure IP co-sell Marketplace purchases count 100% toward a customer's Microsoft Azure Consumption Commitment, with no cap. Significant for customers who have made a MACC commitment and want their third-party purchases to count toward it.

What partners are actually experiencing

In conversations with our partners, the picture is more nuanced than the headline narrative suggests.

Migration progress is mixed and gradual. Some partners have not yet pushed the EA-to-CSP transition with their customer base. Others are actively building pipeline and seeing Microsoft pressure customers to move. The difference between these two groups is largely one of readiness: partners with the right tooling, contracts, and talk tracks in place are moving. Those still building confidence are watching.

Cloudmore Partner, Q1 2026

"Microsoft are looking to push their EA customers our way. The initial conversations with large enterprises are starting. But are we actively out there hunting those enterprise agreement customers moving to CSP? That I don't know."

Four friction themes come up consistently in conversations with our customers.

📊

Azure billing visibility

The number one customer complaint. Customers coming from EA or Microsoft Direct are used to clear billing views and cost centre attribution. CSP billing has historically been harder to navigate. Partners who can close this gap turn the biggest objection into a differentiator.

⚠️

NCE operational risk

The 7-day window catches partners out. One incorrect licence count and you are committed for the term. Several partners rebuilt their internal contracts and governance processes after being caught. Those who did this work are now operating with materially less financial exposure.

🌍

Multi-region migration complexity

For customers operating across multiple geographies, CSP migration can require tenant changes they actively resist. EA remains the path of least resistance in some of these cases. CSP partners can only sell to customers in the same CSP region as their tenant, a real constraint for multi-national bases.

🔍

EA opportunity detection

Partners are not always aware which of their existing CSP customers also hold active EA agreements. Partner Center does not send alerts when EA data shows up. Without that visibility, those renewals slip through. The partners who spot them first win the conversation.

Cloudmore Partner, Q1 2026

"A lot of our customers complain that CSP is challenging when it comes to seeing their Azure billing. It's a major complaint. EA and Microsoft Direct will give them better visibility and that's what they're used to."

There is also a compliance and governance dimension that comes up particularly with larger customers. Cost centre attribution, management approval workflows, and internal compliance requirements are easier to manage in EA. Partners who can replicate this governance experience in their CSP platform will reduce resistance and accelerate adoption.

The indirect to direct opportunity

The EA-to-CSP shift is not just a conversation for established direct-bill partners. It is also a catalyst for indirect resellers who are ready to make the move to direct.

The economics of staying indirect get harder as the market matures. Distributors take margin. You have less control over pricing. You depend on your distributor's tooling and processes for customer management. As the CSP market grows and competition increases, the partners with the most operational control will have the most commercial flexibility.

What Microsoft requires to operate as a direct-bill CSP

  • At least 12 months as an active indirect reseller before applying for direct-bill status.
  • $1M trailing 12-month billed revenue at the Partner Global Account level, enforced from October 2025 with annual reassessment.
  • An active Microsoft support plan (ASfP or PSfP) demonstrating the ability to support customers directly.
  • Mandatory Partner Center API integration for automated billing and provisioning. This is where platform choice becomes critical. You cannot operate at direct-bill scale with manual processes.
  • Security score requirements with ongoing compliance validation beginning January 2026.
  • At least one Solutions Partner designation. A required threshold, not a nice-to-have.

The API integration requirement deserves specific attention. Microsoft's intent is clear: direct-bill CSPs are expected to operate with automation at the core of their business. If you are applying for or have recently received direct-bill status, your platform infrastructure is not optional. It is the basis on which Microsoft assesses your fitness to operate at that tier.

Five moves to make right now

Based on what the research tells us, and what we hear from partners directly, here are the practical actions that will determine who captures this opportunity and who does not.

1

Map your EA exposure across your existing CSP base

Start with what you already have. Identify which of your current CSP customers also hold active EA agreements. These are your warmest prospects for a CSP-led renewal conversation. Partner Center does not surface them proactively and Microsoft is not sending alerts when these appear. You need visibility at the platform level. If your tooling does not give you this, that is the first gap to close.

2

Build your Azure billing story before you go to market

The number one complaint partners hear from EA customers considering CSP is billing visibility. If you can demonstrate parity with EA billing or better, you remove the biggest objection before it lands. Build a reconciliation and cost transparency playbook. Make Azure cost management a feature of your service offering, not an afterthought. Partners who show customers better Azure visibility than they had under EA will win these conversations consistently.

3

Tighten your NCE governance before it costs you

The 7-day window is not going away. Build customer-facing self-service governance into your model so licence changes go through a controlled process rather than informal requests. Update your customer contracts to reflect NCE commercial terms explicitly. Introduce daily or weekly licence audits as a standard operational process. The partners who have done this work are operating with significantly less financial exposure and significantly more customer confidence.

4

Build an EA conversation asset and use it proactively

Many of our partners are planning webinars and asking for ready-to-use enablement content for EA-to-CSP conversations. A clear, concise explainer on what the shift means commercially, what changes for the customer, and what to do next is a practical sales tool. It also positions you as the expert in the room when the Microsoft notification arrives. The partners running these conversations first are building pipeline with the least competition.

5

Reduce your Partner Center dependency at the operational level

We consistently hear from partners that they want to move their teams off Partner Center and into a platform they control. This is a growth constraint, not just a user experience preference. The more your day-to-day operations depend on Partner Center, the harder it is to scale your CSP business without adding headcount at the same rate. Automation at the provisioning, billing, and renewal layer is the difference between a CSP business that scales and one that does not.

Built for direct CSPs at enterprise scale

Cloudmore is the platform that direct-bill CSP partners use to run their Microsoft business with the automation, control, and integration they need to grow. Not a Partner Center wrapper. The operational layer that makes CSP commercially scalable.

Enterprise-grade automation

Automate provisioning, renewals, licence changes, and billing across your entire customer base. Eliminate the manual overhead and operational bottlenecks that cap your growth. As your CSP book scales, your headcount does not have to scale with it. 

Azure billing transparency and reconciliation

Give your customers the cost visibility and cost centre attribution they are used to from EA. Make Azure billing clarity a feature of your managed service, not a pain point in your renewals. Close the most common objection in every EA-to-CSP conversation before it derails the deal. 

Tech stack integration ready

Cloudmore integrates with PSA tools, CRM systems, and ERP platforms via a full API. Your CSP operations connect to the rest of your business, not run in isolation. For partners meeting Microsoft's direct-bill API integration requirement, Cloudmore is built to satisfy it from day one. 

Indirect to direct, supported from the start

For partners making the move from indirect to direct CSP, Cloudmore provides the platform infrastructure that makes the transition operationally credible immediately. The automation and API capabilities Microsoft expects from direct-bill partners are built in, not bolted on.

The window is open. Not forever.

The EA-to-CSP migration wave is real, but it is not a fixed event with a single date. It is a structural process that will play out over several years, at different speeds for different customer segments and geographies. Some customers will move quickly once notified. Others will take two or three renewal cycles. The competitive dynamic is not about being there at a single moment. It is about building the capability and the relationships now so that when each customer is ready to move, you are the obvious choice.

The partners who build their tooling, tighten their NCE governance, fix their Azure billing story, and start the EA conversations with their customer base now will accumulate a structural lead that compounds over time. The partners who wait for the market to settle will find themselves competing for customers that better-prepared rivals have already won.

This is not a reason to panic. It is a reason to move. And moving well means having the right platform behind you.

Find out how our platform helps direct-bill CSPs manage the EA to CSP transition at scale, with the automation and integration your business needs to grow.

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