Microsoft Azure - Why you should never buy a subscription from your LSP!

Firstly - let me start by saying I have nothing but admiration and respect for the Microsoft Licensing Solution Provider (LSP) channel, having worked with it & in it for many years I have seen first hand the incredible professionalism & knowledge a true licensing sales person possess. They help customers avoid buying unneeded software licenses, ensure customers remain compliant on their software licensing usage, and can negotiate discounts with the large software licensing vendors - all incredibly valuable services.

However, Azure is not a software license - Azure is a platform on which you future proof your companies competitive edge for years to come, it enables your organisation to be more dynamic and agile, take advantage of market changes and demands all while adapting your operational models & costs to suit your needs.

Let's look at your options when purchasing an Azure subscription:

1. Pay as you go (Web Direct) - usually via a credit card - typically purchased in this way for small ad-hoc projects within IT or development teams, Azure pricing can change on a monthly basis.
2. Volume Licensing vehicle such as an EA - requires an upfront monetary commit (and payment) over a multi year term, locking in your Azure pricing for 3 years, driven via the same process and approach as traditional software purchasing, with a more price / discount focus.
3. Cloud Solution Provider (CSP) - pay as you go, with no Azure price lock or minimum term - but with the option to purchase reserved instances at a discount. CSP providers have a contractual obligation to Microsoft and the end customer to provide 1st line Azure support as a minimum, with a cloud management platform to optimize your Azure environment, they also must be backed by a direct with Microsoft support contract. Ideal for organisations who want to work closely with their CSP partner to really unlock business transformation opportunities within Azure.

Here is the kicker - Azure has 1 price - every single one of the above options, regardless of your industry sector, has the exact same Azure rate card pricing - see here for the Azure Calculator. Negotiating your Azure costs is of course possible, but not exclusive to the EA model any longer. Oh.. and Azure Hybrid Use Benefits and Reserved Instances are available across EA & CSP too...

So - how on earth do you choose your Azure partner and procurement route? Complexity in Microsoft's licensing and procurement options is nothing new, although I would say they are making great strides in trying to simplify it. For me, there are 2 very clear scenarios that should help your decision making process:

1. You have a deeply experienced and highly skilled Azure team internally, across IaaS / PaaS and AI and intend on doing all your own Azure designs, migrations, governance, security, development, ongoing cost optimization and continuous innovation in house - in which case, purchasing Azure upfront on EA, with no reliance on the partner who sold it to you is ideal.
2. You don't have all those skills in house, or perhaps only a subset of them.. and will need some support from an outside expert. Microsoft launched the CSP program for Azure to ensure that customers get the very best experience. They are holding CSP partners to account for this customer experience. The Azure Expert MSP program is the next step in this evolution from partners being a transactional route to market, to them being the strategic difference Azure is chosen by customers.

EA & CSP can quite happily co-exist along side each other in your organisation, it maybe that you only want to take a managed service on a particular application or even perhaps in a region you are looking to open up - but you will continue to manage your internal systems and infrastructure in house..

So - what about when your LSP is also a CSP? There is a really simple litmus test for this one - Are they offering Azure on CSP cheaper than on EA - If yes, ask how, and why? Are they offering you an SLA backed Azure managed service as well - not just a SAM / licensing management service? Can your LSP handle Azure support tickets raised to Microsoft on your behalf (with CSP, the CSP partner has to manage all Azure support requests on MSFT, the end customer cannot go directly) If not, then buyer beware..

In short (and I do appreciate this post is anything but short) when embarking on any Azure project, make sure you really think about the ongoing support you will need for your Azure environment - pick the partner that will best suit this need, and then buy your Azure through them as well, negotiating not only the Azure commercials, but the business outcomes and added value you expect to realize from them.