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Enterprise Agreement vs Cloud Solution Provider: What’s the Right Choice?

If you’re in the market for a cloud solution, chances are you’ve heard of Microsoft’s Enterprise Agreement (EA), which has long been a favorite of both Microsoft and resellers for organizations with over 250 users. According to Network World, EA’s are “designed for companies with 250 seats or above, who want to standardize their Microsoft products, have the rights for the most current version of the software, and only want to account for additional seats once a year.” The agreement lasts for 3 years and automatically includes Software Assurance on all products for that term – all licenses in an EA are perpetual licenses, with the exception of subscriptions.

There are specific benefits to an EA – the pricing is set by Microsoft without any markup from a reseller and contains a higher level of discounts and Software Assurance over other volume licensing programs. Also, the cost for a three-year contract is broken down annually, so organizations don’t need to pay the whole amount at once. However, despite the benefits, EA’s do have a few drawbacks.

With an EA, an organization is contractually obligate to a “True-up” once a year. This means that an organization can add or remove users, products, or services at any time without having to place individual purchase orders and simply account for the changes during the yearly “True-up.” While this provides organizations with added convenience, fear of “True-up” charges may lead IT decision makers to estimate the amount of users they’ll add during the year at the time they sign the agreement, which can actually result in increased costs.

Why the fear? “True-up” charges are lump sum payments, meaning the entire cost of the product for the remainder of your three-year contract must be paid upfront. So, if an organization adds a product or service halfway through the first year of their contract, they’ll owe the full cost of the next two and a half years at “True-up ‘time – which can be an unwelcome surprise.

Datapipe Governance services can assist customers with management and optimization of licensing including EAs, but an EA is not going to be the best fit for every organization. In order to bring added choice and flexibility to clients, Datapipe also has access to license Microsoft cloud services through a new option called the Microsoft Cloud Solution Provider (CSP) program. Through the CSP, Datapipe manages the client relationship through support and managed services along with reselling Azure services. Customers pay a predictable monthly bill based on their usage of Microsoft cloud services, such as Azure and Office 365, through Datapipe vs. a software reseller. For very large organizations the discounts in CSP are not as large as the ones available through the EA program, but there is no up-front commitment.

The CSP program is a great new option for clients that desire the unique features of this model, and also want their Datapipe support relationship to extend to Azure and Office 365. With CSP, Datapipe also manages more of the details related to cloud accounts and subscriptions. A client can leverage CSP for the entirety of their cloud usage, or to supplement existing licensing such as an EA. The key differentiator to note is that Datapipe managed services are accessible to clients via both models. A client truly has the choice of which works best for their organization or even possibly a mixture of both and they can rest assured that their environments will be managed by Datapipe in the same, consistent fashion. The table below breaks down the main difference between Microsoft’s Enterprise Agreement and Datapipe’s Cloud Solution Provider program.

Enterprise Agreement Cloud Solution Provider Program
Terms 3 years Pay as you go
Payment Upfront, in full Month to month
Services All Microsoft products Azure, Office 365
Vendor Enterprise Reseller Datapipe
Discounts 7-30% (Level A, B, C, D) Comparable to EA Level A, B
Support $1,000s monthly Premier support included

If you’re interested in learning more, check out these resources:

Network World

Microsoft Cloud Solution Provider Program

Datapipe’s Microsoft Azure Cloud Management Services

About David Lucky

David Lucky
As Datapipe’s Director of Product Management, David has unique insight into the latest product developments for private, public, and hybrid cloud platforms and a keen understanding of industry trends and their impact on business development. David writes about a wide variety of topics including security and compliance, AWS, Microsoft, and business strategy.

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