Microsoft has announced the retirement of the previous Azure offer in CSP

 
 

News, Hybrid Cloud
17 feb 21 Författare: Jonas Pircher

Beginning July 21, 2021 all new Azure CSP business will be on the new Azure Plan offer.

When Microsoft in November 2019 announced the new modern Azure Plan offer in the CSP, they also informed partners that the previous Azure offer and platform would continue to be available, alongside the new Azure experience, for some time, to give partners time to incorporate the new Azure features with their services and transition their customers to the new experience. 

At January, 21st 2021, Microsoft has announced the plan to retire the previous Azure offer in CSP in three phases:

  • Phase 1 – Beginning July 21, 2021 all new Azure CSP business will be on the new Azure Plan offer.
  • Phase 2 – Sometime during calendar year 2022 incentives and partner margin opportunity will be removed from the previous Azure offer. Microsoft will communicate the phase 2 start date to partners 6 months in advance.
  • Phase 3 – Any remaining customers on the previous Azure offer will be migrated to the new Azure Plan offer in CSP. As with the previous phases, we will communicate the phase 3 start date to partners 6 months in advance.

More details on phase 1 beginning July 21, 2021:

In phase 1, all new Azure CSP business will be on the new Azure Plan offer. Meaning:

  • For all existing reseller relationships between partners and customers in the CSP program, if the customer has already purchased the previous Azure offer, the partner may continue to transact, and the customer may continue to purchase the previous Azure offer from that partner.
  • The previous Azure offer will no longer be available to net-new partners transacting in the CSP program.
  • The previous Azure offer will no longer be available to net-new customers purchasing via a partner in the CSP program.
  • For all new reseller relationships or new customer acquisitions, partners can only transact the new Azure offer (Azure Plan).
  • For all existing reseller relationships between partners and customers, if the customer has never purchased Azure before, the partner may only transact, and customer may only purchase the new Azure offer from that partner.

Next steps

With the new commerce experience partners get recognized for differentiated value-added services on an ongoing basis through the partner earned credit model. Partner earned credit rewards partners who focus on driving customer success via value-added services that generate sustainable profitability. Partners are highly encouraged to familiarize themselves with the partner earned credit model.

To assist you in readiness, below I have highlighted some of the most important topics top of mind and a few tools to find more information yourself. If any questions or concerns, please reach out to your Tech Data Business Development Manager, Microsoft Solution Expert or myself.

Note: The current exchange rate makes is favorable to switch to the modern Azure Plan offer. That may very well change again, so why not take the conversation with customers now, rather than a less favorable time?

Commercial Readiness:

Pricing

  • All pricelists in Azure Plan are in USD only. No local pricelists as in previous Azure offer. This ensure a consistent pricing across countries and regions.
  • Microsoft will continue to bill Tech Data in local currency based on the Microsoft published exchange rate the given month, and Tech Data will continue to bill you as reseller in local currency.
  • Therefore the price in local currency for the same service may vary month by month depending on exchange rate.

Margin

  • We as partners will have no margin on Azure Plan. Instead we will be incentivized by Partner Earned Credit – PEC – if we meet the requirements (see below for details).
  • Currently Partner Earned Credit is 15% of MSRP price, which match the margin of previous Azure.
  • Tech Data will invoice you as reseller using this formula: (Microsoft MSRP minus PEC) + agreed uplift.
  • This change from margin to Partner Earned Credit has been done by Microsoft to encourage resellers to start providing managed services to their customers rather than just reselling Microsoft Azure.

Partner Earned Credit

  • Tech Data, you as reseller or both of us must have 24x7 operational control and management of the customer's Azure resources in CSP. This means Tech Data, you as reseller or both of us must have admin privileges on the customer’s Azure subscription, Azure resource group and Azure resource.
  • We as partners can gain 24x7 operational control and management of a customer's Azure resources in CSP by using different options provided through the role-based access control feature (RBAC).
    • Admin on Behalf Of (AOBO)
    • Azure Lighthouse
    • Directory or Guest Users or Service Principals
  • As Tech Data, we are automatically assigned AOBO rights to perform administrative tasks on the customers Azure AD tenant on behalf of customers. Therefore we and you as reseller will by default get Partner Earned Credits on any subscription in Azure Plan.
  • By default customer does not have ownership of subscriptions or resources, unless specific provided by you as partner.
  • If for some reason customers are provided the ownership of subscriptions or resources, and the customer choose to remove both Tech Data and you as reseller, Tech Data will no longer get Partner Earned Credits, but invoiced the full MSRP price from Microsoft. Tech Data will in such cases continue to invoice you as reseller adding our agreed uplift. As such the invoice to you as reseller will be higher than MSRP price.  
  • PEC is calculated daily and can be viewed in the daily usage file and monthly invoice recon file. A partner (indirect provider or indirect reseller) must have access for the entire day (24x7) to ensure they earn PEC.

Incentives

  • To earn incentives on Azure Plans, you as reseller must be Microsoft Gold Partner on Cloud Platform Competency. If you as reseller are only Silver, no incentives. If you as reseller are Gold on another competency, but not Cloud Platform, no incentives.
  • Current Incentives (if you as reseller are Gold Partner on Cloud Platform Competency):
    • Azure consumption under an Azure Plan: 4%
    • Azure consumption under an Azure Reservation Plan: 10%

Azure Cost Management

  • If you give customer access to Azure Cost Management, the customer will always see the Microsoft MSRP pricing.

 

Technical/Operational Readiness:

Platform

  • StreamOne Cloud Marketplace (SCM)
    • The Modern Azure Plan is already supported by SCM.
    • Modern Azure Plan is not yet supported by SCM Insights reporting. This feature is already in development, and coming soon.  
  • StreamOne Enterprise Solution (SES)
    • The Modern Azure Plan is currently not fully supported in SES in Europe.
    • We expect full functionality within February, including pricebooks.
    • Training and operational guide will be provided.  

Migration

  • Moving from the previous Azure commerce platform to the new Modern Commerce platform (Azure Plan) is a seamless experience and does not incur any service interruption or downtime.
  • Important; once migrated, the customer cannot regret. No option to revert back from Azure plan to previous Azure offer.
  • The migration is available in SCM with a click of a button.
  • For SES, please consult Tech Data Cloud Support, and Tech Data will assist the migration.
  • Azure plans transfers from other partners are available. It is seamless experience and does not incur any service interruption or downtime for end customers. Please consult Tech Data Cloud Support, and Tech Data will assist the transfer.

Subscription Management

  • Azure Plan allows your customers to have multiple Azure subscription under a single plan instead of placing a separate order per subscription.
  • However, only the first subscription is available to purchase within SCM and SES. If the customer need additional subscriptions, please consult Tech Data Cloud Support, and Tech Data will assist you. We hope automated orders for multiple subscriptions within Azure Plan will soon be available.  

Billing

  • All calculations on Modern Azure Plan are calculated by calendar month (same like previous Azure in SES)
  • However, Tech Data will not receive invoice from Microsoft until ~8th in the following calendar month.
  • Therefore you as reseller will receive invoice from Tech Data ~15th for the usage in previous calendar month. Ex. consumption of January, will be invoiced ~15th February.  

 

Resources:

Partner Earned Credit / Cost Management:

 

More to come. Meanwhile, if you have any questions or concerns, please reach out to jonas.pircher@techdata.com