CSP vs Enterprise Agreement: Which to Choose

CSP vs Enterprise Agreement: two ways to buy Microsoft

There are two main ways to acquire Microsoft licenses for a sizable organization: the Cloud Solution Provider (CSP) program, through a partner, and the Enterprise Agreement (EA), a direct contract with Microsoft. The choice defines flexibility, predictability and the level of day-to-day support you receive.

As a CSP and Microsoft Solutions Partner, RHC lives in both worlds and helps you decide based on your profile, not on what is most convenient to sell.

The CSP model

Under CSP, you buy through a partner that acts as intermediary, billing and first line of support. Core traits:

• Monthly flexibility: add or reduce licenses as needed (subject to annual terms when chosen).
• No seat minimum to start.
• Close support from the partner, in your language, with context on your environment.
• Simplified billing, often in local currency.

The Enterprise Agreement model

The EA is a three-year contract, historically aimed at large organizations. Core traits:

• Volume commitment with price locked for three years.
• Annual true-up to reconcile license growth.
• Relatively high seat minimum.
• Direct relationship with Microsoft and an account team.

Head-to-head

The role of True-up in the EA

Under the EA, you declare an initial base and pay for it. Over the year, new hires raise consumption, and the True-up is the annual reconciliation that settles that growth. It is predictable but rigid: you cannot reduce licenses during the term, even if the base shrinks. Companies with stable or growing headcount benefit; companies with seasonality or restructuring get stuck at the peak.

CSP, by contrast, lets you reduce at the monthly or annual renewal, turning licensing into an expense that follows the operation.

When each model fits

Choose CSP when:

• Your base varies through the year or you want to avoid a long commitment.
• You value local support and local-currency billing.
• You are SMB or mid-market and want to start without minimums.
• You want to combine Microsoft 365, Azure and Dynamics in a single relationship.

Choose EA when:

• Your organization is large, stable and wants a three-year locked price.
• You need specific rights historically tied to the EA.
• Three-year predictability outweighs the value of flexibility.

Note that Microsoft has been steering mid-market to CSP, reserving the EA for the largest contracts. Many companies that once signed EAs now fit CSP better.

Azure under both models

For Azure, CSP offers the Azure plan with consumption billing and the option for the partner to apply cost governance, budgets and alerts. Under the EA, Azure enters as a prepaid monetary commitment. For those starting out or with variable consumption, CSP is usually financially safer.

Key takeaways

• CSP delivers flexibility, local support and no minimums, ideal for SMB and mid-market.
• EA delivers a three-year locked price, suited to large stable bases.
• The EA True-up reconciles growth but does not allow reductions within the term.
• CSP lets you scale down as the operation changes.
• Market direction pushes mid-market toward CSP.
• A CSP partner like RHC adds cost governance and close support.

RHC helps compare both models with numbers from your environment and migrate from EA to CSP when it makes sense.