In the second installment of our CSP transition series (click here for part 1), Alexandre Laflamme, Partner Programs and Sales Incentives Manager, breaks down what direct CSPs need to know before choosing an indirect provider. Learn how the right decision can protect your margins, simplify compliance, and help your business grow long after Microsoft’s changes take effect.
When Microsoft announced its updated requirements for the direct Cloud Solution Provider (CSP) program, many partners found themselves navigating unfamiliar territory. With a $1 million annual revenue threshold, 24/7 support obligations and mounting compliance costs, the direct model has become increasingly difficult to sustain, especially for those focused on growth rather than administrative overhead.
This shift isn’t just a policy change; it signals a broader evolution in Microsoft’s expectations for its partners. The challenge now is less about choosing a model and more about aligning with a partner who can help you operate at scale without compromising efficiency.
You’ve already built a functioning Microsoft practice. You understand your clients, manage your margins and provide value far beyond licensing. But the operational demands of remaining direct have changed the equation. Instead of offering autonomy, the direct model is now asking more than many partners can—or should—handle alone. And if you’re one of the partners navigating this shift, it’s okay to feel frustrated, uncertain or even a bit resistant. This isn’t the transition you planned for, but it doesn’t have to be a setback.
For many, transitioning to the indirect model is the only viable path forward. But that transition comes with its own set of decisions. The most critical? Choosing a provider that doesn’t just meet the basic requirements but actively supports your long-term growth and day-to-day execution.
The right CSP Distributor does more than preserve margin. It turns your Microsoft business into a growth engine.
What Microsoft’s new direct CSP economics mean for your business
Microsoft won’t tell partners outright to leave the Direct Bill model, but if you don’t meet the new thresholds, staying direct simply won’t be an option.
Direct partners will soon need to:
- Generate $1M in annual Microsoft revenue (at the Partner Global Account level)
- Pass an annual assessment covering billing, provisioning, compliance, customer support and security capabilities
- Maintain MAICPP standing, solution designations, and skilling requirements
- Build and manage their own API-based billing and provisioning systems
These requirements aren’t standalone tasks and they’re not minor adjustments. They’re evaluated together through Microsoft’s annual capability assessment, and they represent a significant shift in the level of investment required to stay compliant.
We’re seeing many partners who originally pursued direct status for better margins or autonomy now reallocate time, talent and incentives just to maintain their standing. That operational strain can erode profitability and hinder innovation.
Why choosing an indirect CSP is a strategic move
Indirect isn’t a fallback, but rather a strategic advantage. The indirect model, when supported by the right provider, should simplify your operations and enable you to compete more effectively.
A strong CSP partner will:
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- Offload provisioning, billing, and licensing complexity
- Help you unlock Partner Center incentives, co-op funds and strategic services you might otherwise pay consultants for, all with built-in professional support
- Equip your teams with modern tools, training, and go-to-market enablement
- Offer co-branded or white-labeled support so you maintain trust with clients
By contrast, some providers merely offer access to a portal with limited guidance or follow-through. That’s rarely enough for partners accustomed to managing every aspect of the client experience. What you need is a provider who enhances your ability to deliver, not one who expects you to lower your standards. This model isn’t about compromise. It’s about redirecting your energy toward value creation, not administrative survival.
Short-term convenience can create long-term risk
Many direct CSPs feel pressure to move quickly. But speed shouldn’t come at the expense of scrutiny. Choosing a provider based on name recognition or a simplified onboarding path may seem efficient—until inefficiencies emerge at scale.
Here’s what often gets overlooked:
- Lack of visibility: Can you actually see client data, licensing changes, or usage patterns without filing a ticket?
- Poor incentive tracking: Does your provider help you claim MAICPP benefits, rebates, or co-op dollars—or do they assume you already know how to do tha?
- Bundling support: Does your provider help you package Microsoft services with complementary offers that reflect your value — instead of just reselling single SKUs
- Support misalignment: If something goes wrong, is your client calling you—or waiting days for a distributor to escalate on your behalf?
These gaps can erode both margin and reputation. And for partners in a competitive market, those losses add up fast.
What to ask before signing with an indirect CSP
To make this shift worthwhile, you need more than a license reseller. You need a business partner. Here are five things to dig into before signing a new indirect agreement:
1. Migration process and readiness
Ask about the timeline, milestones, and people involved. Do they offer guided onboarding? What resources are available post-migration? Are transitions staggered or all-in-one? This will impact service continuity.
2. Platform capability
Can you provision services in real time, manage your licensing with ease and integrate your PSA or billing system? Or are you stuck with workarounds?
3. Support structure
What happens after 5 p.m.? Can they triage issues directly with Microsoft? Do they offer white-label support to protect your brand—or are you alone after hours?
4. Microsoft ecosystem guidance
Do they proactively help you maintain standing in the Microsoft ecosystem? Can they explain incentive changes, MAICPP rules, security scores, and designation strategies—or do they just pass along links?
5. Strategic enablement
Look for providers who offer pitch support, campaign templates, sales coaching and dedicated account management from day one (not just when you hit someone else’s revenue target).
The right partner will anticipate what’s next and help you get there faster.
Choose a partner who enhances your business
Indirect partners should help you do more, not make you settle for less.
Letting go of the direct model may feel like a concession. But in today’s partner landscape, it’s often a catalyst for operational efficiency. The autonomy many partners once fought for has increasingly been replaced by administrative burden.
Choosing an indirect CSP provider is your chance to redefine how you engage with Microsoft and how you deliver value to your clients. Done well, this isn’t a step back. It’s a strategic shift forward.
You’re not just adapting to new rules. You’re choosing the kind of support that will shape your growth, profitability, and partner standing for the long term. The right provider will make that transition feel less like a compromise and more like the next step in your evolution.
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