Microsoft Licensing · EA vs CSP vs MCA

Microsoft EA vs CSP vs MCA: Choosing the Right Agreement

Microsoft offers multiple licensing frameworks — each tailored to different enterprise needs. This guide explains the Enterprise Agreement (EA), Cloud Solution Provider (CSP), and Microsoft Customer Agreement (MCA), comparing their flexibility, pricing, commitment levels, Software Assurance, support, and cost management to help you choose the right model.

Microsoft EAMicrosoft LicensingAgreement Comparison
EA3-year fixed term · Volume discounts · Software Assurance included · 500+ users
CSPNo fixed term · Partner-managed · Monthly flexibility · No SA included
MCAEvergreen · Pay-as-you-go · Direct with Microsoft · No minimum commitment

📋 Table of Contents

1
EA

Enterprise Agreement (EA)

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A three-year volume licensing contract for large organisations (typically 500+ users/devices). It mandates organisation-wide deployment of covered products and includes Software Assurance (SA). For a deep-dive on negotiating your EA, see Microsoft EA Negotiation Guide.

Advantages

💰
Volume-Based Discounts

Pricing tiers deliver deeper discounts at higher licence counts. Large enterprises can achieve significant per-seat savings that CSP and MCA models can't match.

🛡️
Software Assurance Included

SA includes version upgrades, training vouchers, 24/7 support, planning services, and deployment assistance throughout the term. These benefits alone can represent substantial value.

📊
Predictable Budgeting

Fixed pricing for the three-year term with an annual true-up to add new users or devices. No surprises from consumption spikes — budget with confidence.

📦
Broad Coverage

Combines on-premises licences and cloud services (Azure, Microsoft 365, Dynamics 365) under one contract, simplifying procurement and administration.

Disadvantages

⚠️
High Commitment

Must licence all eligible users/devices (the "platform count"), even if not all actively use the products. This can lead to paying for shelfware.

🔒
Limited Mid-Term Flexibility

Cannot reduce core licence counts mid-term (except on EAS subscriptions). Must wait for renewal to renegotiate most terms. A three-year lock-in can trap outdated needs.

💡 Best For: Large, stable enterprises that need broad coverage and Software Assurance. Ideal when predictable costs and enterprise-wide licensing are top priorities.
2
CSP

Cloud Solution Provider (CSP)

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A subscription-based model sold through Microsoft partners. Licences and cloud services (Azure, Microsoft 365, etc.) are purchased as needed on a monthly or annual basis, with no fixed term.

Advantages

🔀
High Flexibility

Easily add or remove users and services, scaling month-to-month with business demands. No enterprise-wide mandate or minimum seat count.

🤝
Partner Support & Services

The CSP partner handles billing and provisioning and can bundle additional managed services, training, or migration assistance. Single point of contact for support.

Fast Deployment

Ideal for quick rollouts, pilot projects, or smaller departments that require agility. No lengthy procurement or contract negotiation required.

Disadvantages

💲
Pricing Variability

The CSP partner sets costs, so list prices can include partner margin. Discounts (if any) vary by partner. Smaller volume means less volume discount — monthly model can cost more per user than EA pricing.

No Software Assurance

SA must be purchased separately or covered under a different programme (like MPSA for on-premises). You lose upgrade rights, training vouchers, and planning services.

💡 Best For: Organisations that prioritise agility and can tolerate variable costs. Also suitable for smaller companies, individual departments, or scenarios where consumption and headcount fluctuate significantly.
3
MCA

Microsoft Customer Agreement (MCA)

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An evergreen, consumption-based agreement directly with Microsoft. It governs cloud purchases (mainly Azure and online services) on a pay-as-you-go or commitment basis, without a fixed term.

Advantages

📊
No Minimum Commitment

Pay only for services consumed. Adjust usage at any time with no contractual penalty. Monthly or annual invoicing based on actual usage aligns with consumption budgeting.

🌍
Direct Global Relationship

Deal with Microsoft on enterprise terms, often with global currency and tax handling for multinational use. No intermediary partner required.

Simplicity

No licensing tiers, minimum counts, or complex true-up processes. Ideal for straightforward cloud spend management. For more on navigating the transition, see From EA to CSP to MCA: What Every CIO Must Know.

Disadvantages

📈
Unpredictable Costs

Without fixed pricing, costs can spike unexpectedly. Requires diligent usage tracking and governance to avoid bill shock — especially for Azure consumption.

No Software Assurance or Bundling

Like CSP, SA is not included. Separate Volume Licensing agreements needed for on-prem licences. Lacks some EA features (no annual true-up for on-prem, limited bundling).

💡 Best For: Cloud-centric organisations or projects with highly variable usage patterns. Also suitable for companies wanting simplicity and pay-as-you-go or trialling Azure services without upfront commitments.

Evaluating which Microsoft agreement structure fits your organisation? Get independent guidance.

Microsoft EA Optimisation →
4
Comparison

Full Comparison Table: EA vs CSP vs MCA

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FeatureEnterprise Agreement (EA)Cloud Solution Provider (CSP)Microsoft Customer Agreement (MCA)
Agreement Term3-year fixed termNo fixed term (evergreen)No fixed term (evergreen)
Commitment LevelHigh (organisation-wide licensing)Low (no minimum commitment)None (pay-per-use model)
Licensing FlexibilityModerate (annual true-ups, limited reductions)High (add/remove subscriptions anytime)High (scale usage without constraints)
Software AssuranceIncludedNot included (available separately)Not included
Pricing StructureSet by Microsoft (volume tiers based on total seats)Set by partner (flexible, varies)Set by Microsoft (no volume tiers)
DiscountsVolume-based (deeper at higher tiers)Variable (depends on partner pricing)No negotiated discounts (except large Azure commits)
Support & ServicesMust purchase separately (or via partner)Included via CSP partnerNot included (depends on partner or Microsoft SLAs)
Cost PredictabilityHigh (fixed for term, budgeted)Medium (monthly billing with partner smoothing)Low (fully usage-based)
Typical Use CaseLarge enterprises needing stability and broad coverageFlexible or project-based needsCloud-first, usage-driven scenarios
5
Strategy

Strategic Guidance: Which Model Fits You?

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🎯
Match to Scale & Goals

Choose an EA if you're a large organisation with stable needs requiring enterprise-wide coverage and Software Assurance. Opt for CSP if you want subscription agility and a partner to manage billing. Use MCA if you're strictly cloud-based or need pure pay-as-you-go flexibility.

💰
Evaluate Total Cost vs Flexibility

Consider how each model affects budgeting, contract length, and admin overhead. An EA may lock in lower prices but less flexibility. CSP/MCA provides more flexibility at the expense of predictability. Model total cost of ownership across 3 years for each scenario.

🔀
Consider Hybrid Approaches

It's often advantageous to mix models. For example, use EA for core on-premises software and add CSP/MCA subscriptions for elastic cloud workloads. Align each part of your licence portfolio with the model that makes financial and operational sense. For Azure commitment strategies, see Negotiating Azure Commitments in Your EA.

👥
Involve Procurement & IT Together

The right choice impacts cost, management complexity, and vendor relationships. Engage both procurement and IT stakeholders. Tailor your licensing strategy to your organisation's size, financial model, and technical roadmap.

Scenario Quick Reference

ScenarioRecommended ModelWhy
Large enterprise, 500+ users, stable headcountEAVolume discounts, SA included, predictable budgeting
Mid-size company, fluctuating usersCSPMonthly flexibility, partner support, no minimum seats
Cloud-first / Azure-heavy, variable consumptionMCAPay-as-you-go, no minimum commitment, direct Microsoft terms
Large enterprise + elastic Azure workloadsEA + MCA hybridEA for on-prem stability; MCA for cloud elasticity
Small department piloting Microsoft 365CSPFast deployment, no procurement overhead, cancel anytime
Global company needing currency/tax consistencyMCA or EAMCA offers multi-currency; EA offers global consistency
⚠ Common Mistake: Don't default to renewing your EA without evaluating alternatives. Many organisations can save significantly by shifting portions of their estate to CSP or MCA — especially if cloud consumption now dominates their Microsoft spend. See EA Negotiations: Top Mistakes to Avoid.

Approaching your EA renewal? Our Microsoft specialists have saved enterprises millions on EA, CSP, and hybrid deals.

Microsoft Contract Negotiation →

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Frequently Asked Questions

What's the minimum size for an Enterprise Agreement?+
Microsoft typically requires 500+ users or devices to qualify for an EA. For organisations below this threshold, CSP or MCA are usually more appropriate. Some organisations use an EAS (Enterprise Agreement Subscription) which may have lower entry points, but the 500-seat minimum remains the standard EA benchmark.
Can I switch from EA to CSP or MCA mid-term?+
Generally, you're locked into an EA for its three-year term. However, you can add CSP or MCA services alongside your EA immediately — many organisations run hybrid arrangements. At EA renewal, you can choose to shift some or all products to CSP/MCA. Plan the transition 12-18 months before renewal to evaluate options and negotiate effectively.
Is Software Assurance worth the cost?+
It depends on your usage. SA includes version upgrade rights, training vouchers, planning services, and 24/7 support. If you consistently upgrade to new product versions and use the training and planning benefits, SA delivers strong value. If you're primarily cloud-based (Microsoft 365, Azure) and rarely deploy on-prem software, SA's value diminishes — CSP or MCA may be more cost-effective.
Which model is cheapest per user?+
For large organisations (500+ seats), the EA typically offers the lowest per-user cost due to volume-based pricing tiers. CSP per-user costs include partner margin and lack volume tiers. MCA has no negotiated discounts by default (except for large Azure commitments). However, total cost depends on usage patterns: if you significantly over-provision an EA, CSP or MCA's flexibility may result in lower actual spend.
Can I reduce licences mid-term on an EA?+
Standard EA terms do not allow reducing core licence counts mid-term — you can only add via the annual true-up. However, EAS (Enterprise Agreement Subscription) models allow more flexibility with reductions at renewal anniversary. Some organisations negotiate special terms allowing limited mid-term adjustments. This is a critical negotiation point to address before signing. See Microsoft True-Ups: Avoiding Costly Mistakes.
How does Azure pricing differ across EA, CSP, and MCA?+
Under an EA, Azure consumption can be pre-committed via MACC (Microsoft Azure Consumption Commitment) with negotiated discounts — often 5-15% below list. Under CSP, Azure is billed through the partner at rates that include partner margin (sometimes offset by partner-added value). Under MCA, Azure is pay-as-you-go at list prices unless you negotiate an Azure Plan commitment. For large Azure consumers, EA or a large MCA commitment typically yields the best rates.
What's the best approach for a hybrid on-prem + cloud environment?+
A hybrid EA + CSP/MCA approach often works best. Use the EA for on-premises licences (Windows Server, SQL Server, Office) where SA provides upgrade rights and volume discounts. Layer CSP or MCA for elastic cloud workloads (Azure VMs, Microsoft 365 user growth, dev/test environments). This combines EA's predictability with cloud flexibility. Ensure you don't double-pay for licences covered under multiple agreements.
Should I involve a licensing advisor for my EA renewal?+
Yes — especially for large EA renewals. Microsoft's sales team is skilled at maximising your commitment. An independent licensing advisor can benchmark your pricing against industry peers, identify shelfware, evaluate EA vs CSP/MCA alternatives, and negotiate better terms. The savings from expert negotiation typically far exceed advisory fees. See our Microsoft Contract Negotiation Service.
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FF

Fredrik Filipsson

Co-Founder — Redress Compliance

Fredrik Filipsson brings two decades of enterprise software licensing expertise, including hands-on experience at IBM, SAP, and Oracle. As co-founder of Redress Compliance, he advises Fortune 500 enterprises on complex software negotiations across Oracle, Microsoft, SAP, IBM, Salesforce, Broadcom, ServiceNow, and emerging cloud/AI vendors. His team's vendor-independent approach and fixed-fee model ensure procurement leaders receive objective, data-driven guidance to maximise value in every enterprise software engagement.