Why and How to Transition from Microsoft Enterprise Agreements to CSP Billing

Microsoft recently announced that starting January 2025, many cloud Enterprise Agreement (EA) customers will no longer be eligible for renewals under the current system. 

For enterprise customers, Microsoft recommends transitioning to the Microsoft Customer Agreement for enterprise (MCA-E) – a digital evolution of the traditional EA. 

Meanwhile, small and medium companies have two options: they can either move to the Cloud Solution Provider (CSP) program for partner-managed services and value-added support, or choose MCA-E if they prefer a direct relationship with Microsoft.

For years, Microsoft’s Enterprise Agreement was the go-to licensing model for mid-to-large enterprises. But in a cloud-first world, its long-term commitments, hefty upfront costs, and true-up complexities no longer fit businesses that need flexibility. Microsoft positions these new purchasing options as part of their broader strategy to modernize licensing frameworks, with CSP offering consumption-based pricing and streamlined management through partner expertise. 

In this blog, we’ll see the key differences between EA and CSP, available licensing options under CSP, why businesses are making the switch, and how to transition smoothly.

Microsoft’s Enterprise Agreement (EA) has long been the default licensing model for large organizations. It offered a structured, centralized way to manage software licenses at scale, providing both stability and predictability.

Key features of EA include:

1. Fixed-term contract:
   • A 3-year agreement with locked-in pricing.
   • Requires upfront payment (or structured installments) that commits you to a set number of licenses.
2. True-Up process:
   • Allows you to add licenses once a year, but you can’t reduce them mid-term.
3. Comprehensive coverage:
   • Supports both on-premises solutions (such as Office Professional Plus, Windows OS upgrades, Exchange, SharePoint, and Skype) and cloud services (including Office 365 [E1, E3, E5], Enterprise Mobility + Security, Windows 10 Enterprise, and Windows Virtual Desktop).
4. Volume discounts & perks:
   • Offers volume-based discounts (around 5–10%).
   • Includes benefits like 24/7 Microsoft support, planning services, and technical training.

Microsoft’s Cloud Solution Provider (CSP) model is built for businesses that need flexibility, cost efficiency, and real-time control over their cloud resources. With CSP, you can buy, implement, and manage Microsoft cloud solutions through certified Microsoft partners. The partner manages licensing, billing, and support on your behalf plus guides you on which services you need, help set everything up, train your team, and provide ongoing support.

Key features of CSP:

• Flexible licensing & billing – No long-term commitments. Scale licenses up or down instantly. Billing is simple, monthly or annual auto-renew, so you only pay for what you use.
• Real-time management – Adjust licenses on demand without waiting for an annual true-up. Plus, enjoy streamlined administration with consolidated billing and automated ordering.
• Comprehensive product access – Get 99% of Microsoft’s offerings on demand, including Azure, Microsoft 365, and Dynamics 365, through a transactional model.
• Partner-managed services – Certified Microsoft partners provide cost optimization, managed services, and proactive spend management.

Note: CSP licensing is only available through authorized partners like Simform.

1. Business agility and cost benefits: Unlike EA’s rigid structure, CSP doesn’t need upfront commitments or true-up billing. With flexible pricing and pay-as-you-go models, organizations adapt their technology investments to market dynamics without penalty.
2. Cloud-first innovation: Businesses need CSP’s on-demand licensing options to support rapid experimentation and deployment of their cloud initiatives.
3. Resource optimization: CSP makes real-time monitoring and adjustment possible. This helps organizations maintain optimal resource allocation and minimize overprovisioning, which is not possible with EA’s annual true-up model.
4. Risk management: Modern security threats demand quick response capabilities to contain the damage. CSP partners provide specialized expertise and rapid support escalation to maintain tight security postures and compliance standards.
5. Digital transformation support: In addition to licensing flexibility, organizations undertaking digital transformation also need the cloud management guidance and implementation expertise that Microsoft partners bring.

But there are some caveats to consider:

1. Temporary transitions are risky: Some organizations try short-term CSP adoption to fill the gap during EA transitions. But this can reset quotas and disrupt reserved instances, creating more work for minimal long-term benefit.
2. Discount trade-offs: While CSP offers flexibility, it doesn’t include EA’s volume discounts. Businesses must balance the pay-as-you-go model with potential long-term savings.

Ultimately, if you ensure a proper, methodical transition to CSP, you get the freedom to innovate and grow without being tied down by rigid features of the EA model. 

Through the Cloud Solution Provider program, businesses can access Microsoft products and services through the following licensing arrangements:

1. Subscription-based licensing

• Monthly or annual subscriptions for cloud services and software
• Flexible seat management with ability to increase or decrease licenses as needed
• Includes products like Microsoft 365, Dynamics 365, and select server products
• Managed through the Microsoft New Commerce Experience (NCE) platform

2. Pay-as-you-go licensing

• Consumption-based billing model primarily for Azure services
• No upfront commitment required
• Costs based on actual resource usage
• Includes Azure infrastructure, platform services, and marketplace solutions

3. Perpetual licensing

• One-time purchase option for select server products and on-premises software
• Available for specific products like Windows Server and SQL Server
• Does not include version upgrade rights unless Software Assurance is added
• Limited availability through CSP compared to subscription options

4. License assignment options

Within these licensing arrangements, businesses can use different assignment methods:

• Per-user: Licenses assigned to individual users (most common for Microsoft 365)
• Per-device: Licenses tied to specific devices (for shared device scenarios)
• Core/processor based: For server workloads
• Resource-based: For Azure services

For most modern businesses, a hybrid approach combining subscription-based licensing for user productivity tools with pay-as-you-go cloud services often provides the best balance of cost efficiency, flexibility, and feature access. Work with your CSP partner to regularly review and optimize your licensing mix as your business needs evolve.

A smooth migration from EA to CSP depends on understanding the process inside out and confirming nothing slips through the cracks. Here’s your step-by-step guide:

1. Preparation and data backup

1.1. Export critical data:       
Before making the move, export all your cost and billing data, invoices, and usage reports from the Azure portal. If your finance team relies on past reports for audits or cost forecasting, archive them now to avoid leaving any blind spots in your budget planning.

Tip: Analyze your historical usage to identify cost-saving opportunities for post-migration.

1.2. Verify eligibility & prerequisites:

Before starting the transfer, make sure you have the right EA admin or Billing Account Owner access. Here’s what you need to verify:

• Deployment model: If you’re still on the classic Azure model, you’ll need to migrate to Azure Resource Manager (ARM) first.
• Microsoft Entra ID alignment: Your subscription must be associated with your organization’s Microsoft Entra ID tenant, and you need to establish a reseller relationship with your CSP partner. If your subscription is associated with a different tenant, a manual migration will be required.
• Subscription types: Some subscriptions like dev/test offers, government clouds, or specialized contracts may not be eligible for transfer and require case-by-case handling.
• Reserved Instances & savings plans: Any Reserved Instances (RIs) or Savings Plans purchased under EA won’t transfer automatically. To maintain cost efficiency, you’ll need to repurchase them under CSP. 
• Marketplace solutions incompatibility: While most classic resources are deprecated, certain marketplace solutions may need compatibility verification for CSP. This includes custom VM images, specialized PaaS services, and third-party solutions.
• IaC readiness: Ensure your Infrastructure-as-Code templates are up-to-date so you can quickly rebuild unsupported resources if needed.

2. Establishing the reseller relationship

2.1. Work with a CSP partner

Your CSP partner is key to a successful migration. Work with a Microsoft-certified CSP  who has proven expertise in managing complex hybrid environments and implementing robust security controls. They’ll manage the transfer, provide technical guidance, and ensure Microsoft support is on hand throughout the process.

To kick things off, you’ll need to establish a formal reseller relationship via the Azure portal. Your partner will then create new CSP subscriptions under their Microsoft Partner Agreement (MPA), which will replace your EA subscriptions as your new billing accounts once the transfer is complete.

2.2 Choose the right CSP model

You have two CSP options:

• Direct CSP (Tier 1): Partners who purchase products and subscriptions directly from Microsoft and sell them to their customers through their own sales teams. This model requires partners to manage their own billing, customer service, and technical support, which means they need a more robust infrastructure compared to indirect resellers.
• Indirect CSP (Tier 2): Partners work through a distributor for backend operations while maintaining direct customer relationships.

As an authorized Microsoft Solutions Partner, Simform is eligible for Microsoft incentives based on performance and volume thresholds, which we extend to our customers through reduced service fees, additional services, or other value-adds.

3. Initiating the Transfer

3.1 Submit a transfer request:

Your CSP partner will submit the transfer request through Azure Cost Management + Billing. But make sure that the person initiating the request has the necessary Admin Agent or billing admin role otherwise, the request won’t go through.

3.2 Review and approve:
Once the transfer request is submitted, your billing team receives an email to approve it. Here’s what they need to check:

✔ Are all intended subscriptions listed correctly?
✔ Are there any transfer warnings (e.g., disabled subscriptions)?
✔ Do Reserved Instances or Hybrid Benefits need adjustments post-transfer?

Note: Subscriptions with outstanding balances or compliance issues may be blocked from transfer. Resolve these before proceeding.

4. Execution and post-transfer steps

4.1 Billing ownership transfer

Once the transfer is approved, billing ownership shifts from your EA to your CSP partner’s MPA. At this point, your EA contract is deactivated for the transferred subscriptions.

But any quota increases you had under EA (like additional VM cores or storage limits) will reset. If you need a higher quota post-transfer, your CSP partner must submit a new request to Microsoft.

4.2 Securing resource continuity

All your resources (VMs, disks, databases, and websites) will migrate with the subscription. Certain services like Azure Bastion, VPN Gateway, or ExpressRoute circuits may experience minor interruptions. To minimize disruptions, plan your transfer during off-peak hours.

You can learn more about the process here.

While CSP offers more flexibility, better cost visibility, and improved support, making this transition smoothly demands careful planning, a strong partnership with your CSP provider, and proactive post-migration validation. 

As a Microsoft Azure Solutions Partner with specializations in Digital and App Innovation, Data & AI, and Infrastructure, our approach to CSP migration is built on deep technical expertise and years of hands-on experience managing critical Azure workloads. 

With 75+ Azure-certified engineers and 250+ Microsoft experts, we work closely with your team for:

• • Strategic migration planning with a pre-migration assessment to identify critical dependencies, potential service disruptions, and compliance requirements. We analyze everything from RBAC configurations to resource quotas, ensuring zero surprises during transition.
  • Ensuring zero-downtime by executing migrations during off-peak hours with robust rollback strategies. Our teams carefully manage service dependencies, DNS configurations, and access controls to prevent business disruptions.
  • Managing cloud spend with new monitoring frameworks under CSP. Our FinOps automation stack includes allocation tracking through Azure Tags and custom policies, utilization monitoring via Azure Monitor, and automated rightsizing recommendations based on performance metrics.
  • Maximizing cost benefits through Microsoft CSP incentives we share with our clients and strategic guidance on service selection to optimize your cloud investments.
  • Engineering support to optimize your Azure architecture and implementations, reducing development overheads and ensuring best practices that prevent costly rework.
  • 24/7 monitoring and maintenance to ensure your cloud environment remains robust and responsive, with rapid incident resolution.

Partner with Simform to gain a single point of contact for all your Microsoft licensing needs, backed by industry best practices from start to finish. Schedule a free 30-minute consultation with our Azure experts to discuss your concerns.