CSP Spotlight

January 2023

Louise Ulrick
Commercial Licensing
January 2023
Agenda 2
Agenda

• How do you make money in

CSP?
• Software, Online Services, Azure
• Margin, incentives, PEC
• Did You See…?

January 2023
The CSP billing platforms
Legacy billing platform New commerce billing platform

Azure consumption services Reservations and Azure Savings Plans

through the old Azure offer

Marketplace offers
Online Services for
Commercial customers
Software Subscriptions
Online Services for Education,
Charity, Government customers
Perpetual licenses for software

Azure consumption services

through the new Azure plan

Online Services for

Commercial customers

January 2023
Software: margin, incentives

January 2023
Software price list 5

• Software price list from Microsoft is available to Direct Partners and Indirect Providers
• Includes Software Subscriptions and perpetual licenses
• Priced in partner currency with built-in margin

January 2023
Software Subscription incentives 6
https://bit.ly/3k3X6wS

January 2023
Margin, incentives, PEC: a summary 7
Margin Incentives PEC
Software Subscriptions Yes Yes N/A

Perpetual software Yes No N/A

Commercial Online Services

Yes No N/A
transacted through legacy

Non-commercial Online Services

Yes Yes N/A
transacted through legacy

Commercial Online Services

Yes Yes N/A
transacted through NCE

Azure services transacted

No No No
through legacy

Azure services transacted Yes, with admin

No Yes
through NCE access to resources

January 2023
Online Services: margin, incentives

January 2023
Online Services price lists in CSP 9
Legacy
NCE

• Price lists from Microsoft available to Direct Partners and Indirect Providers
• Priced in the partner currency with built-in margin
January 2023
FY22/FY23 timeline 10
H1 FY22 H2 FY22 H1 FY23

October – December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Price increase for some Modern Work offers Mar 1, 2022

Annual offer promotion for NCE 5% discount: ending Mar 31, 2022

Monthly offer promotion for NCE Monthly discount to annual price: ending Jun 30, 2022

New Subscriptions must be purchased in NCE Starting Mar 10, 2022

Legacy Subscriptions must be renewed into NCE Starting Jul 11, 2022

Incentives in legacy Ending Dec 31, 2022

https://bit.ly/3zrFEaO
https://bit.ly/3ztzs2d

January 2023
Partner incentives in CSP 11

Microsoft will continue to pay partner

incentives for non-commercial offers
that aren't available in new commerce,
including Education, Government, and
Nonprofit offer IDs, and promotions
https://bit.ly/3GVEEQ0

These non-commercial offers are

detailed in the CSP product addendum,
and will continue to be incentivized
through legacy CSP incentives

January 2023
CSP Product Addendum 12
https://bit.ly/3ivEo0S

January 2023
Partner incentives in CSP 13
“CSP
Incentives Non-commercial
Program” Online Services offers
billed through the
legacy billing
platform

“Microsoft
Commerce Commercial
Incentives Online Services
https://bit.ly/3k3X6wS

Program” offers billed

through the NCE
billing platform

January 2023
Scenarios 14
Northwind Traders sold Office 365 Northwind Traders sold Office 365
E3 to their commercial customer in A3 to their education customer in
2020 via the legacy commerce 2020 via the legacy commerce
system. That Subscription has auto- system. That Subscription has auto-
renewed since then renewed since then
No incentives paid after Incentives paid through the CSP
31 December 2022 Incentives program

Northwind Traders sold Office 365 Northwind Traders sold Office 365
E3 to their commercial customer in E3 to their commercial customer in
2020 via the legacy commerce 2021 via the NCE commerce
system. That Subscription was then system. That Subscription has auto-
migrated to NCE in 2022 renewed since then
Incentives paid through the MCI Incentives paid through the MCI
program program

January 2023
Margin, incentives, PEC: a summary 15
Margin Incentives PEC
Software Subscriptions Yes Yes N/A

Perpetual software Yes No N/A

Commercial Online Services

Yes No N/A
transacted through legacy

Non-commercial Online Services

Yes Yes N/A
transacted through legacy

Commercial Online Services

Yes Yes N/A
transacted through NCE

Azure services transacted

No No No
through legacy

Azure services transacted Yes, with admin

No Yes
through NCE access to resources

January 2023
Are these statements true or false? 16

Margin and incentives are available

for Software Subscriptions T
Margin is now removed for all Online Services offers
transacted through the legacy commerce platform F
Incentives are now removed for all Online Services offers
transacted through the legacy commerce platform F
All Online Services Subscriptions for commercial
customers must now be migrated to NCE F

January 2023
Azure: margin, PEC, incentives

January 2023
Azure price list in NCE 18

• Price list from Microsoft available to Direct Partners and Indirect Providers
• All priced in USD with no built-in margin

January 2023
Reservations and Azure Savings Plans 19
https://bit.ly/3ivpSGj

January 2023
How are partners paid by Microsoft for providing 20
services around Azure?
Partners are paid as a percentage of a
customer’s Azure Consumed Revenue
(ACR), as:
• Partner Earned Credit
• For the TPOR (Transacting Partner of
Record) with admin access to Azure
Resources – can only be a Direct
Partner or an Indirect Provider
• Incentives
• For transacting CSP partners linked to
a customer, enrolled in an incentive
program – can be any type of CSP
partner

January 2023
Understanding the Azure plan 21
The Azure plan links a partner and customer, and groups Subscriptions together from a billing perspective

Partner: Partner:
VMs-R-Us We-R-IoT

Azure plan: + Azure plan: +

Subscription1 Subscription3

Subscription2

Customer:
Wingtip Toys
January 2023
 CSP – Azure plan | full AOBO 22
Wingtip Toys buy Azure services through two CSP partners who have both transacted the
Wingtip Azure plan offer
Toys
VMs-R-Us and We-R-IoT actions
• Transact the Azure plan and create additional
Subscriptions if required
• AOBO access to all Subscriptions is automatic

Wingtip Toys actions

• None

Partner Earned Credit and incentives

• VMs-R-Us and We-R-IoT automatically have admin rights on all Resources
in all Subscriptions they have transacted:
• Thus, full Partner Earned Credit is earned for all Resources
• Incentives are earned for all Resources (regardless of AOBO access)

January 2023
 CSP – Azure plan | no AOBO 23
Wingtip Toys buy Azure services through two CSP partners who have both transacted the
Wingtip Azure plan offer
Toys
VMs-R-Us and We-R-IoT actions
• Transact the Azure plan and create additional
Subscriptions if required
• AOBO access to all Subscriptions is automatic

Wingtip Toys actions

• Removes AOBO access on all Subscriptions for
VMs-R-Us and We-R-IoT

Partner Earned Credit and incentives

• VMs-R-Us and We-R-IoT have NO admin rights on any Resources in any
Subscriptions they have transacted:
• Thus, NO Partner Earned Credit is earned for any Resources
• Incentives are earned for all Resources (regardless of AOBO access)

January 2023
 CSP – Azure plan | no AOBO | RBAC access 24
Wingtip Toys buy Azure services through two CSP partners who have both transacted the
Wingtip Azure plan offer
Toys
VMs-R-Us and We-R-IoT actions VMs-R-Us and We-R-IoT actions
• Transact the Azure plan and create additional • Each partner user logs in to the
Subscriptions if required tenant and uses the Partner Admin
• AOBO access to all Subscriptions is automatic Link functionality to link their
PartnerID to be eligible to earn
Wingtip Toys actions Partner Earned Credit
• Removes AOBO access on all Subscriptions for
VMs-R-Us and We-R-IoT
• Grants specific RBAC access at the required
scope to partner users via guest or directory
users

Partner Earned Credit and incentives

• VMs-R-Us and We-R-IoT have SOME admin rights on Resources in the
Subscriptions they have transacted:
• Thus, Partner Earned Credit is earned on those Resources with admin access
• Incentives are earned for all Resources (regardless of AOBO access)
January 2023
 CSP – Azure plan | full AOBO with more partners 25
Wingtip Toys buy Azure services through two CSP partners who have both transacted the
Wingtip Azure plan offer
Toys
VMs-R-Us and We-R-IoT actions
• Transact the Azure plan and create additional
Subscriptions if required
• AOBO access to all Subscriptions is automatic

Wingtip Toys actions

• Engages a new partner to help with storage optimization
• Grants RBAC access to We-Do-Storage users

Partner Earned Credit and incentives

• VMs-R-Us and We-R-IoT automatically have admin rights on all Resources
in all Subscriptions they have transacted:
• Thus, full Partner Earned Credit is earned for all Resources
• Incentives are earned for all Resources (regardless of AOBO access)
• In CSP, only transacting partners can earn PEC or incentives, thus We-Do-
Storage are not eligible for either PEC or incentives
January 2023
Partner Earned Credit and linked PartnerIDs in CSP 26
Partners must have access to customer resources AND ensure that their
PartnerID is linked to the customer’s tenant

Category Scenario PartnerID association

AOBO A Direct Partner or Indirect Provider creates a Automatic
Subscription for the customer, and/or an
Indirect Reseller is given access to the
Subscription
Azure Lighthouse Managed Services Offer in Marketplace is Automatic
accepted by a customer on a CSP Subscription
Azure Lighthouse An ARM template is deployed in the CSP Link PartnerID manually
Subscription
Directory or guest user Customer creates new users with RBAC access Link PartnerID manually

January 2023
Linking a Partner ID
https://bit.ly/3GUQ72h
27

https://bit.ly/3QBtOSI

January 2023
Partner Earned Credit resources 28

https://bit.ly/3IDOW8R

January 2023
Multipartner scenarios 29

https://bit.ly/3CCpOLR
For PEC, it's only important that
the transacting partner has set
any of the available permission
options. For the indirect model,
it could be the provider, or the
reseller, or both

Another partner setting

additional AOBO or other
permissions and setting
additional Azure RBAC for users
with Azure RBAC permissions
won't affect PEC for the
transacting partner

January 2023
Reservations and Azure Savings Plans 30
https://bit.ly/3ivpSGj

January 2023
Reservations/Savings Plans and incentives 31
https://bit.ly/3k3X6wS

January 2023
Margin, incentives, PEC: a summary 32
Margin Incentives PEC
Software Subscriptions Yes Yes N/A

Perpetual software Yes No N/A

Commercial Online Services

Yes No N/A
transacted through legacy

Non-commercial Online Services

Yes Yes N/A
transacted through legacy

Commercial Online Services

Yes Yes N/A
transacted through NCE

Azure services transacted

No No No
through legacy

Azure services transacted Yes, with admin

No Yes
through NCE access to resources

January 2023
Resources 33
https://bit.ly/3GyE5dz

January 2023
Are these statements true or false? 34

In CSP, only the Transacting Partner of Record

is paid Partner Earned Credit T
Incentives are paid to CSP partners regardless of the
level of admin access they have on a Subscription T
CSP partners must always manually link their
PartnerID to a customer’s Azure Subscription F
A non-CSP, services partner could earn incentives
on Azure purchased through CSP F

January 2023
Did You See…?

January 2023
Updated comparison documents 36

https://bit.ly/3MleMNJ
Generate your own PDFs of the individual sheets
January 2023
Windows 8.1 end of support 37

https://bit.ly/3GvzpFn

January 2023
Community Calls from Business Operations 38

CSP Q&A calls

• Who: CSP Direct Partners and Indirect Providers
• What: assist with questions related to CSP launches and upcoming changes
• When: January 18/19, 2023
• Registration: https://bit.ly/3afeki3

January 2023
CSP Spotlight
January 2023

Louise Ulrick
Commercial Licensing
January 2023