Microsoft EA vs CSP vs MCA: Choosing the Right Agreement

Microsoft EA vs CSP vs MCA: Choosing the Right Agreement

Executive Summary

Microsoft offers multiple licensing agreement models—each tailored to different enterprise needs. The key options are the traditional Enterprise Agreement (EA), the partner-managed Cloud Solution Provider (CSP) program, and the Microsoft Customer Agreement (MCA) for cloud services.

This article explains each’s characteristics and when they are best used, and provides a comparison table outlining their flexibility, terms, support, and cost management aspects.

Enterprise Agreement (EA)

• Description: A three-year volume licensing contract for large organizations (typically 500+ users/devices). It mandates organization-wide deployment of covered products and includes Software Assurance (SA).
• Pros:
  • Volume-based discounts: Pricing tiers mean deeper discounts at higher license counts.
  • Software Assurance includes upgrades, training, and support benefits throughout the term.
  • Predictable budgeting: Fixed pricing for the three-year term, with an annual true-up to add new users or devices.
  • Broad coverage: Combines on-premises licenses and many cloud services under one contract.
• Cons:
  • High commitment: Must license all eligible users/devices (the “platform count”), even if not all use the products.
  • Limited flexibility: Cannot reduce core license counts mid-term (except on EAS subscriptions) and must wait for renewal to renegotiate most terms.
  • Long-term lock-in: A three-year term may lock in outdated needs or pricing if business priorities change.
• Best for: Large, stable enterprises that need broad coverage and software assurance. It is ideal when predictable costs and enterprise-wide licensing are top priorities.

Cloud Solution Provider (CSP)

• Description: A subscription-based model sold through Microsoft partners. Licenses and cloud services (Azure, Microsoft 365, etc.) are purchased as needed on a pay-as-you-go (monthly) or annual basis, with no fixed term.
• Pros:
  • High flexibility: Easily add or remove users and services, scaling month-to-month with business demands.
  • Lower commitment: No enterprise-wide mandate or minimum seat count; pay for exactly what you deploy.
  • Partner support and services: The CSP partner handles billing and provisioning and can bundle additional managed services or training.
  • Fast deployment: Good for quick rollouts, pilots, or smaller departments needing agility.
• Cons:
  • Pricing variability: The CSP partner sets costs, so list prices can include partner margin. Discounts (if any) vary by partner.
  • Software Assurance is not included. SA must be purchased separately or covered under a different program (like an MPSA for on-premises).
  • Potentially higher unit costs: Smaller volume often means less volume discount; the monthly model can cost more per user than a large EA discount.
  • Multiple agreements: Each subscription or service might be a separate transaction.
• Best for: Organizations that prioritize agility and can tolerate variable costs. It is also suitable for smaller companies or departments or scenarios where consumption and headcount fluctuate.

Microsoft Customer Agreement (MCA)

• Description: 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.
• Pros:
  • There is no minimum commitment. You pay only for the services you consume, and you can adjust your usage at any time.
  • Flexible billing: Monthly or annual invoicing based on actual usage; aligns with consumption budgeting.
  • Direct relationship: Deal with Microsoft on enterprise terms, often with global currency and tax handling for multinational use.
  • Simplicity: No licensing tiers or minimum counts; ideal for straightforward cloud spend management.
• Cons:
  • No Software Assurance: Like CSP, SA is not included (separate Volume Licensing agreements needed for any on-prem licenses).
  • Unpredictable costs: Without fixed pricing, costs can spike unexpectedly; it relies on diligent usage tracking.
  • Limited bundling: Lacks some EA features (no annual true-up for on-prem licenses, for example).
  • No partner management: Support and advisory must come from Microsoft or third parties, rather than a dedicated CSP partner.
• Best for: Cloud-centric organizations or projects with highly variable or unpredictable usage. It is also suitable for companies that want simplicity and pay-as-you-go or for trialing Azure services without upfront commitments.

Read Negotiating Azure Commitments in Your Microsoft EA.

Comparison Table

Table: Key differences among EA, CSP, and MCA licensing models.

Strategic Summary

• Match to scale and goals: Choose an EA if you’re a large organization with stable needs that requires enterprise-wide coverage and SA. 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 and flexibility: Consider how each model affects budgeting, contract length, and admin overhead. An EA may lock in lower prices but less flexibility, whereas CSP/MCA gives more flexibility at the expense of predictability.
• Consider hybrid approaches: It’s possible (and sometimes advantageous) to mix models. For example, an enterprise might use EA for core on-premise software and add CSP/MCA subscriptions for elastic cloud workloads. Align each part of your license portfolio with the model that makes sense.
• Involve stakeholders: When deciding, engage both procurement and IT. The right choice impacts not just cost but also management complexity and vendor relationships. Tailor your licensing strategy to your organization’s size, financial model, and technical roadmap.

Read more about our Microsoft EA Optimization Service.

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