Microsoft’s new commerce experience for Azure announced a sweeping overhaul of how managed service providers (MSPs) and other Microsoft CSPs buy and manage Azure services. The transition to this new experience is ongoing, with many partners still looking to make the switch from the legacy commerce framework.
This update was influenced by critical factors such changing buying habits Microsoft observed around the world, as well as direct feedback from partners and customers. A sponsored study by Forrester Research on B2B buying habits found that 68% of business buyers now prefer to do their own research and perform self-service purchasing. The increased presence of millennials in current business and IT leadership was identified as one of the main reasons for this uptick. In response to partner feedback, the new commerce experience for Azure was also designed to offer more transparent pricing, simplified ordering and billing processes, and to create more opportunities for CSP and MSP partners to offer value-added services.
What does the new commerce experience for Azure offer?
Under the new commerce experience, partners offering Microsoft Azure will have more opportunities to generate revenue by delivering value through managed services, offering project-based services, creating custom software, or by providing SaaS apps. The new commerce experience doesn’t affect how your clients use Azure or how their Azure resources run. It only affects your Azure billing and how transactions occur.
It’s also important to note that for now, Microsoft is only applying this new experience to Azure. It does not yet affect Microsoft 365 or other Microsoft products. The goal is to streamline how Microsoft runs its usage-based service—Azure—without affecting its license-based products. We expect new commerce experiences will be announced for other products in the future.
The new commerce experience implements a few key changes…
A single purchase agreement
In the new commerce experience, all partners accept just a single, simplified Microsoft Customer Agreement on behalf of their customers. The agreement doesn’t expire, and any additional purchases a partner makes are just added to the same agreement.
Azure’s new commerce experience pulls together both Microsoft and third-party apps and services into a single unified catalog. These include whole cloud services, like an Azure subscription, but they can also include partner value-added services like specialized software development, or any other services they want to list.
Partners outside the US should be aware that this unified catalog will be offered in US dollars only. Exchange rates will be recalculated monthly, and you will be billed in your local currency. (For Sherweb partners, Microsoft’s exchange rates can be found in the detailed usage reports in our partner portal.)
New management tools
Microsoft introduced an Azure Cost Management tool as part of the new commerce experience. This tool is designed to give CSPs, MSPs, and their clients better insight and control over many aspects of their Azure environments.
- Monitor client cloud spending: Partners can monitor the cost and resource usage for each of their client’s assets that they need to keep an eye on, including individual Azure resources, projects, business units and other asset types. They can do this both at a high-level for a unified view of their client’s tenant or at a very granular daily view. Partners can also track usage rates to ensure they’re lining up with projected budgets. Usage anomalies are much easier to detect in the new Azure Cost Management tool. You can drill down to specific points in time to help isolate what caused a usage spike.
- Accountability and compliance support: The improved granularity offered by the Azure Cost Management tool can also help ensure compliance with regulations and governance policies. You can configure alerts and notifications to trigger if a resource is used too much, or if a rate limit is about to be hit, for example. The Cost Management tool also lets you assign custom tags to different Azure resources. This is helpful with reporting. You can set thresholds or allocate usage costs by project or by business unit. If a threshold is hit, a notification can go to you or directly to client stakeholders so they can take action before they overspend.
- Optimize efficiency: One of the most powerful and improved features in Azure Cost Management is the resource utilization tool. It tracks virtual machine (VM) use and gives automated recommendations for VM right-sizing, even showing projected cost-savings. Right-sizing calculations can be made for memory optimization, compute optimization, or graphics optimization. You can also use the tool to detect idle resources, like unused memory or unattached disks, and automatically reallocate them.
How partner earned credit (PEC) work in the new commerce experience?
All these new features come with a significant change to the Azure CSP incentive program. In the new commerce experience, instead of a direct discount on Azure subscriptions, Partners will generate partner earned credit (PEC) when they help their clients deploy and manage Azure resources. (For Sherweb partners, these credits will now be factored into how the Azure discount is calculated on your invoices from Sherweb.)
To earn PEC on a client’s subscription, a Partner has to maintain persistent administrator access on each tenant at the resource level. It’s important to understand that Microsoft calculates PEC daily, and only maintaining 24-hour RBAC admin access that day will generate PEC on that tenant. If your admin rights are missing on a resource, Microsoft won’t give PEC for that resource specifically.
How to prepare for the new commerce experience for Azure
To make the transition to the new commerce experience, CSPs and MSPs need to take a few actions. First, they need to sign two required agreements. The first is the updated Microsoft Partner Agreement. Next is the Microsoft Customer Agreement that you need to sign on behalf of your clients. This replaces the Microsoft Cloud Agreement and will now cover every service in the updated new commerce experience catalog.
(For Sherweb partners: if you’re using a PSA billing integration in the Sherweb partner portal, you will need to update SKU mapping information to ensure accurate billing. Unfortunately, this can’t be done automatically. This will ensure you get proper PEC on your Sherweb invoice going forward!)
Work with an experienced Microsoft Azure partner
Sherweb has resources and expertise on hand to help Azure providers enhance their offerings and deliver added value for clients. As an award-winning Microsoft partner, we understand how to support MSPs and other resellers in order to maximize their profitability. Get in touch with us about any questions you have about switching to the new commerce experience, or how to grow your cloud business with Microsoft Azure.