Microsoft’s® Volume Licensing Program has been around since 1993, and its various components are the most common way organizations purchase software licenses from Microsoft. The primary agreement within the program is the Enterprise Agreement (EA), which is intended for medium to large organizations with 500 or more users or devices. The EA certainly has some advantages, including pricing discounts which are typically deeper than other agreements, but it also requires a three-year commitment, annual payments, and yearly true-ups to accommodate fluctuations in the number of licenses required.
Microsoft has made no secret about their desire to move their customers from traditional perpetual licenses to subscriptions, such as those of Office 365™. Other services, such as Azure™ hosting, also lend themselves well to the pay-as-you go model.
In 2016, Microsoft introduced the Cloud Solution Provider (CSP) Program as a supplement or even possible replacement to the EA. The CSP has been met with varying levels of enthusiasm, but as more organizations are moving to the cloud, CSP has been increasing in popularity and some have speculated that it may eventually replace the EA. Today, the CSP only applies to online services.
The CSP has no minimum number of users and, while the discounts are less than an EA, there is no annual upfront payment or requirement for a three-year term. The CSP requires an annual commitment, but the user pays monthly for that which they use and they may increase or decrease their usage every month.
It’s no coincidence that the CSP model is very similar to that which Google uses for G Suite. A notable difference is that G Suite may be licensed on a monthly basis without an annual commitment (Flexible Plan) as an alternative to their Annual Plan, which is much like Microsoft’s CSP.