With the dust settling from the recent celebration of Microsoft’s 50th birthday in April, I thought it would be timely to sit down and put my thoughts on paper. Having worked for a Microsoft partner for the past 20 years, I’d like to discuss the incredible journey that we have experienced within the Microsoft partner ecosystem. As we set forth into Microsoft’s 51st year, one thing I know we can continue to count on in partnership with Microsoft: change will continue—and partner adaptation will be the key to our collective success.
Let’s take a look at the partner and customer experience as they stand today, what has changed, and why it has changed. I also think it is important to dig in and help understand the logic behind why Microsoft continues to make changes like this in terms of the role of the partner community.
Adapting Partner Strategies to Support Customer Success
For Microsoft partners, gone are the days of celebrating the sale of the Microsoft contract. As the ink dries on these contracts, partners must now shift focus to the services we can deliver to support our customers in their consumption of these technologies and their ongoing digital transformation journey. Partners have had to evolve and build a deep bench of Solution Architects and Engineers to design and execute customers’ deployment strategies and priorities.
To ensure measurable success, partners must establish a roadmap for the customer to document their deployment priorities of these Microsoft technologies. Partners must then quickly pivot to engage these Architects and Engineers to help execute this mission in the form of professional services.
It is equally important for the partner to determine areas of duplicate technology spend to help optimize and justify what is typically an increased investment in the Microsoft stack. This does two things, (1) builds an internal business case for the customer and (2) helps document the story that they’ll take to Microsoft to negotiate a new contract term.
Essentially, partners now must be in lockstep with the customer every step of the way on their journey to ensure lasting success and measurable return on their Microsoft investment. To compound all these factors, and with the diminishing financial return on these Microsoft contracts, partners have started to charge for these advisory services to be able to continue to support these vital Microsoft resources in-house. Partners are offering consulting services, typically in conjunction with the strategic decisions at renewal time. As I look out at the partner landscape, I’m seeing these advisory services coming in the form of point-in-time consulting, typically delivered under an executed SOW. I am also seeing partners offer managed services to support the customer over the contract lifecycle, providing checks and balances all along the way.
In all cases, this changes the game, and now customers must be prepared to pay for these kinds of services on top of the Microsoft contract. This will have a compounding effect, one that will result in a significant mindset change and one that has required adaptation on the part of the partner and especially the customer!
What Does This Mean for Customers?
For the customer, the navigation of product releases, product updates, and pricing changes will continue to be par for the course. After all, this is Microsoft, and one thing we can always count on is change! But this shift in partner focus is a big adjustment and not one that I expect customers to take lightly. Investing in these professional services and documenting this business justification will expedite customers’ time-to-value, help them to get more out of their Microsoft investment, and realize ROI at a much faster pace.
I expect that the investment that customers make in these kinds of services will pay for themselves many times over in the form of optimization and negotiation posture. This experience with their Microsoft partner will help to establish stronger footing and build a business partnership beyond the Microsoft stack, both with the partner but also with Microsoft directly. Customers will see their Microsoft partners more heavily engaged and in rhythm with them on their technology journey, essentially no longer just showing up when their contract is up for renewal. Over time, customers will grow accustomed to these billable professional services to be a part of the partner ethos as it relates to their Microsoft investment and technology strategy.
Understanding Microsoft’s Strategic Shift in Partner and Licensing Models
Why has Microsoft made these profound changes in how they pay their partners and made selective decisions to take some of these contracts direct? First, it is important to know that change with these Enterprise Agreements (EAs) is not new. On July 1, 2016, Microsoft increased the minimum seat count for an EA from 250 to 500 users, which came with its own turbulent ride. More recently, on January 1, 2025, Microsoft announced the start of an EA “phase out” affecting select Level A EA customers (<2,400 users). This change was designed to drive these customers to consider a direct model with Microsoft called the Microsoft Customer Agreement (MCA) or the option to move to a partner-led Cloud Solution Provider (CSP) agreement.
With either of these moves, the customer is going to feel the impact in the way of loss of programmatic discounts tied to EA Levels B, C, and D. Additionally, if a customer maintains “From SA” subscriptions, they will not be able to carry these programmatic discounts into the MCA or the CSP agreements, at least as it stands today. Lastly, the EA also carries with it inherent benefits in the form of price locking and the ability to negotiate contract terms and pricing, which would also likely be eliminated with these moves to MCA or CSP. It’s hard for me to foresee the guardrails on these kinds of rules being removed, but I guess anything is possible!
I believe that these changes encourage an indirect pivot in partner strategy, encouraging them to focus on selling professional services that correspond to the Microsoft investment. This strategy will help these customers consume these technologies at a more rapid and measurable pace. Microsoft has changed the game in a big way with the way they pay their partners, and although change can be uncomfortable, I can understand their logic.
While the sale of the license is still important, it’s the partner follow-through that has become the shining moment. In today’s climate, partnering with the customers as they embrace these technologies to increase business efficiencies, resulting in positive outcomes and increased profitability, is now what calls for celebration. We have seen this as an evolution that has forced the partner community to adapt. And the hard truth is that the partner profitability on these EAs has diminished over time, which has forced this pivot in business strategy to stay relevant.
To level the playing field, Microsoft partners have had to change the way that they do business due to the challenges to maintain these Microsoft resources on their own payroll. It has become commonplace to see Microsoft partners charging for advisory services and the ongoing management and administration of these Microsoft contracts—not to mention the mission to move customers from EA to CSP Agreements, which can offer more flexibility and financial optimization for the customer.
Embracing Change
To conclude, the road ahead will continue to have its bumps and curves. There is no doubt that customers that prepare and adapt will find themselves well-positioned for success in the future. It’s highly important for customers to stay informed and engaged with both their Microsoft partner and Microsoft directly. This is a journey that will come with challenges, and as long as the partner stays engaged with their customer—and the customer engaged with their partner—the opportunities to mitigate risks and capitalize on the benefits are better than ever!
Partners must lead with a proactive approach to support their customers in staying ahead of these big strategic decisions. By doing so, customers will be better prepared, have the opportunity to learn about and implement new emerging technologies, and maintain a competitive edge in the market. The byproduct of this journey together is a level of trust unlike anything we’ve seen in the past. We’re in the midst of a technological revolution, especially with the advent of AI and machine learning. The elite partners have a chance to stand out by acting as the customer’s advocate and guide them in a sherpa-like way, with every step, to ensure each decision that is made is properly calculated and measured for success! Contact us today to learn how we can help you navigate the complex world of Microsoft licensing.
Casey Lindsay
Casey Lindsay is a Strategic Software Consultant with Connection’s XLO Practice. Casey brings over 15 years of vast Microsoft experience helping Connections’ clients navigate all the complex decisions surrounding their Microsoft technology and investment strategies. When not tackling Microsoft decisions, Casey can be found outside spending time with his family traveling with their RV to create lasting memories doing things like hiking, kayaking, and paddleboarding.
