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A New Way to Buy Microsoft Azure Services

Microsoft is changing the way that customers will buy Azure Services with a new procurement program called the Microsoft Customer Agreement. This new, slimmed down, online agreement will simplify how Azure Services are procured, and in most cases, eliminate any pricing and terms negotiation and greatly reduce the need for a licensing partner. The new Microsoft Customer Agreement (MCA) is a perpetual or evergreen contract that will replace the current Azure-Only Server and Cloud Enrollment (SCE) that many customers are currently using to purchase Azure Services. In time it is possible that Microsoft will remove the option for customers to purchase Azure Services through SCE and the Enterprise Agreement as a whole and leave customers with just two options: Microsoft Customer Agreement (Direct with Microsoft) or the Cloud Solutions Provider Program (Indirect through a CSP partner).

Source: SoftwareReviews, Accessed July 17, 2019

Here’s what the MCA will provide to customers:

  • A new, simple 11-page Microsoft Customer Agreement presented, accepted, and stored through a completely digital experience at Microsoft Store for Business.
  • Access to a single-offer catalog containing first- and third-party Microsoft products and services through a new Azure marketplace experience.
  • Consistent purchasing and management experiences whether the customer chooses to buy through partners, the web portal, or directly through their Microsoft account teams.

How does this affect the current Azure Customer?

If you are currently purchasing Azure Services through an Azure-Only SCE you will need to decide on what option best suits your needs now and for the future:

  • Renew into the new Microsoft Customer Agreement.
  • Remain in the SCE leveraging the Extended Terms (refer to the SCE contract for T&Cs).
  • Migrate to the Cloud Solutions Provider Program (CSP).

Summing up the new program

  • Purchasing via a Server and Cloud Enrollment or Enterprise Agreement had some benefits, including a three-year price protection that no longer exists in the new MCA. However, this price protection required a three-year commitment to Azure with a minimum monetary commitment of (US$12,000) per year.
  • Large monetary commitments usually allowed customers to negotiate Azure workload pricing discounts with Microsoft. This will no longer be an option with the new MCA.
  • Many enterprise agreements required customization through amendments from Microsoft to address various customer agreement changes, such as special discounts, multi-tenant usage, and geographical needs. The new streamlined MCA doesn’t allow for amendments.
  • The EA/SCE three-year term provided predictable annual payments with annual True-ups if required and the option to renew/extend for an additional three years. The MCA provides an evergreen contract whereby you will be billed monthly in arrears based on the services that you consume, however, pricing is subject to change and is based on standard Azure.com.
  • The MCA Azure platform uses the same infrastructure as the CSP platform (ARM) and is different from the EA/SCE Azure infrastructure (ASM). Any move from a SCE to MCA or CSP platform will likely require a migration and not just a billing/invoicing change from Microsoft.

Bottom Line

If you decide to move from the Server and Cloud Enrollment that was previously managed by Microsoft and an LSP, you will most likely be assigned a new Microsoft sales contact. This new sales contact will be responsible for pre-sales and transaction activities previously done by a Licensing Solution Provider (LSP). A previous Monetary Commitment on a SCE will not roll over into the new agreement so any unused monetary commitment would be forfeited at the end of the SCE agreement term.