Different ways of buying Azure Services (Pay-As-You-Go, EA, Direct CSP, Indirect CSP)
How do you buy Azure Services?
This simple question it’s tricky in most of the cases. For many companies, it is not clear how they buy Azure Services, what kind of provider they are using.
Additional to this, they don’t know what the difference between different ways of buying resources and which one is more suitable for their needs is.
Let’s take a look at the 4 different ways on how we can buy Azure Services and try to identify the pros and cons of each option.
Direct from Microsoft
You can buy Azure Services directly from Microsoft. It means that the invoice is generated directly by Microsoft, and any issues that you have will be handled directly with them. This provides you with a clear process related to how tickets and incidents are handled and a direct link to Microsoft support. Even so, because you interact with support, they might ask you initially some dummy questions that help them to understand better your business and technical problem.
Besides this, Microsoft does not offer support from how to setup and configure Azure Services. You just buy Azure Services, and you are fully responsible for configuring and managing them.
From the cost perspective, usually, when you buy directly from Microsoft, you have Pay-As-You-Go subscriptions, where the Azure resources price are the same as the one listed on Azure Pricing. You don’t get special discounts or deals.
- Strong technical support with good experience
- Standard procurement flow
- Support might be slow
- Rares are without discounts
- No business consultancy
- No direct support related to setup/implementation
Enterprise Agreement (EA)
You still buy Azure Services directly from Microsoft, but this is design for a large organisation that can make a commitment related to consumptions. The minimum commitment is for 3 years, where you need to put upfront the amount of money that you commit will consume.
You can combine under the same agreement the Azure Services and the licenses part, that can simplify internally the procurement procedures. The customer can create a new Azure subscription directly.
The most significant advantage of it is the level of discount that you get — that is pretty substantial. For this nice discount, you are hooked for at least 3 years, and you cannot reduce the cost of consumption for this period. You can anytime increase the commitment, but you cannot reduce it, and the extras that you need might not come with the expected discount.
- Substantial discounts for high volume
- Combine licenses and Azure Services under the same agreement
- Locked into a 3-year program
- Lack of flexibility
Involves buying Azure Services from a partner that is indirect CSP. This involves a two-tiered structure where each Indirect CSP works with a Cloud Distributor that result in Azure Services to them.
This structure works great for small companies but can generate issues when things become a little more complex. Because of the two-tiered structure, two layers try to get their own margin on top of the price. Even so, Microsoft is offering good discounts to Cloud Distributor and the final price is much better in comparison with a Pay-As-You-Go. Creating a new Azure subscription involves requiring it from the Indirect CSP that needs to follow-up the request to the Cloud Distributor.
A second problem that can appear it is related to support. Because you don’t buy directly from Microsoft a part of the support is offered by this two-tier structure. In general, small indirect CSP don’t provide support, and you need to rely on CSP Distributor for technical support.
- More personable experience
- Each purchasing mechanism for local, small companies
- Support offered by a 3d party
- Profit margin is split between two tiers
A direct CSP is buying Azure Services directly from Microsoft. The profit margin is not split into two different tiers as for Indirect CSPs. They get pretty nice discounts from Microsoft that can be seen by their customers also.
By working directly with the customers, they know the customer business and can provide better support and services but also at the same time to be able to offer reasonable prices. From the size perspective a direct CSP it is a larger organisation than an indirect CSP, that ensure better technical support. The support is more customer oriented in comparison with the one that you can get directly from Microsoft.
As for indirect CSP, you can scale up or down your resources based on your needs. Still, if the customer needs a new Azure Subscription, he needs to contact the Direct CSP to fulfil the request.
- Ability to turn services off or on
- Consultants that know the customer and the business
- A better technical support team
- More significant discounts in comparison with Indirect CSP or what Microsoft is offering
- Price can be higher than EA
What option best suits you?
You need to take into account all the pros and cons. It is important to know that going with a CSP can have big advantages especially because you don’t need to manage by yourself the subscriptions in comparison with EA and you also get more personalized support from a consultancy team that knows your business and needs.