Australian partners react to Microsoft CSP changes

Three perspectives from various channel companies on how the forthcoming CSP changes will impact their businesses.

A few weeks ago Microsoft announced a slew of changes to its cloud solution provider (CSP) program.

The tech giant said it was implementing new authorisation requirements for direct bill partners distributors and indirect resellers in CSP.

These were to ensure that Microsoft maintains a highly capable and compliant ecosystem of partners.

Microsoft has also done a CSP distributor requirements overhaul where it will put the minimum TTM revenue requirement for distributors at US$30 million per authorised region as part of the program requirements starting October 1.

The Windows creator also plans to launch three-year subscription offers for its E3 and higher-priced E5 licenses on June 1, with three-year subscriptions becoming available July 1 for Microsoft 365 E5 Security and E5 Compliance mini suites.

In an interview with CRN, Nicole Dezen, Microsoft’s chief partner officer and corporate vice president for the Global Partner Solutions organisation said the changes are designed to "fuel growth in the small and medium enterprise customer segment through our partners”.

CRN Australia reached out to a number of partners about the forthcoming changes and how they will impact the broader channel community.

“Changes are clearly designed to empower partners serving the SME segment”

Peter Birbeck, CEO at Acclario, a Microsoft systems integrator said the changes will have minimal disruption for their customers, particularly for a partner of their scale.

“From a customer perspective, the most visible change is the introduction of three-year agreements, which bring greater stability and predictability to licensing,” he said.

“Customers with longer terms will benefit from reduced administrative overhead and more strategic engagement.”

Birbeck said the raised bar around solutions partner designations ensures customers are now working with partners who meet more stringent technical and service standards.

“This is Microsoft cleaning house - refining the partner ecosystem to prioritise quality over quantity, and ultimately ensuring that customers receive consistent, high-calibre service,” he added.

Birbeck explained how these changes will impact SME businesses.

"These changes are clearly designed to empower partners serving the SME segment — which remains a vital growth area for Microsoft,” he said.

“By enforcing higher partner standards and aligning incentives with long-term customer value, Microsoft is effectively strengthening the entire value chain.”

Birbeck noted that this is not just about driving license volume.

“It’s about cultivating a network of capable, invested partners who can help small and medium enterprises scale effectively,” he said.

“It’s a deliberate move by Microsoft to clean up its partner program, elevate quality, and support the next generation of high-performing partners.”

Birbeck believes these changes will deepen relationships with their customers.

“By locking in longer terms, we can move from transactional interactions to strategic partnerships with our clients,” he said.

“We can align our services to their growth plans and help them extract more value from their Microsoft investments over time.

“The higher partner standards also mean customers can have greater confidence in who they’re working with. They know that Microsoft partners have earned their place, not just by selling licenses, but by demonstrating capability and accountability.”

Despite the changes to the CSP program working in his favour, Birbeck noted that Microsoft needs to be cautious about how far they push the partner network.

“While raising the bar for entry into the partner program is important, it should be balanced with commercial reality,” he said.

“There needs to be a clear path for emerging partners to evolve into mature, capable providers. If Microsoft gets that balance right, it will foster a healthier, more competitive ecosystem that benefits everyone: partners, customers, and Microsoft itself.”

“Some impact across the whole channel”

Looking at the new CSP updates, Warren Nolan, SVP channel and strategy APAC at Crayon said these are positive changes, because what Microsoft is doing is ensuring that the ecosystem is a healthy one.

He said, “It's going to have some impact across the whole channel.

“For example, the changes that impact us as an indirect reseller, we need to satisfy security score with Microsoft.

“We need to be providing a genuine support service to our partners and their customers. We need to have designation in solution specialties, and we need to be of a certain size, we need to have certain number of people, and all those things.”

Nolan is on the Global Advisory Council with Microsoft and was in Redmond a month ago discussing the changes.

“Microsoft were talking about the fact that they want to ensure that the community feel they are listening and they are trying to make changes that will have a positive impact,” he added.

He sees the changes to the direct CSP a good opportunity for them to choose the right indirect partner to collaborate with that can “shoulder the load”. Especially when it comes to those other added elements that they need to provide, such as support and security.

Nolan noted that Microsoft, like other vendors, are making changes that they see are going to benefit partners and resellers.

“Obviously there are changes that, at times, impact us in a, maybe not necessarily a negative way. But in a way where we need to pivot or reinvest in other resources, or specialties,” he said.

“In the long run, they work out in a way that where we're able to build that ecosystem, as I say, and create healthy businesses for each other. Particularly in this case, the main drivers for these changes are a result of them listening to the feedback they've been getting.”

“Help our clients with software needs”

Bhavya Kapoor, president APAC, Avanade, a digital consulting firm that works with Microsoft explained how the changes will impact them as they work strategically with their customers.

“What it does for sure is helps us because now we are able to go to the clients with an end to end offering, including helping them with their software needs. We can do that directly with Microsoft through the CSP program,” he said.

Kapoor said there are “companies who were heavily reliant on reselling Microsoft software as a product and doing very little value add”.

“Our business is the opposite. We do a lot more consulting services and lot less reselling of software,” he said.

“We won't go and sell just software to a client, that's not our business model. We will solve a business problem, and the client may choose to buy the software directly through Microsoft or through us. With this new model, it helps them buy through us more efficiently.”