Microsoft to start selling more Azure services directly starting in March

Microsoft is moving to take over more Azure services billing and subscription management through its Microsoft Customer Agreement starting in March 2019.

Microsoft is changing the way it will sell Azure services to small and midsize businesses (SMBs) starting in March. Microsoft will be advising customers to use its Microsoft Customer Agreement (MCA) to buy directly from the company its Azure services and certain third-party products in the Azure Marketplace.

Microsoft did little to publicize the change, which it announced officially through a January 10 note on its licensing page. (I saw the note thanks to a January 15 blog post from Redmond Magazine.)

The MCA is meant to replace methods that customers are currently using to buy Azure through Enterprise Agreements and the Azure Server and Cloud Enrollment (SCE), Microsoft officials said. (As of July 2018, Microsoft discontinued allowing customers to buy Azure through the Microsoft Products and Services Agreement, or MPSA.)

Via the new MCA, customers will get access to a single offer catalog and an 11-page simplified contract that is completely digital. New Azure agreements will be handled by the MCA and existing ones will be eligible for rollover to MCA when their renewal date comes up, according to a frequently asked questions (FAQ) page about the Microsoft Commercial Licensing "Commerce Experience.". There will be no interruption to services in this transition; it's the billing relationship for the subscription that is changing.

Beyond saying the change "will make our licensing transaction process easier, more efficient and simpler for our customers," Microsoft didn't provide any specifics about why it is largely cutting out its partner channel with MCA -- a move the company denies, by the way, claiming "our partners play a critical role in this new commerce model" with value-added services and solutions.

I asked officials about Microsoft's reasons for introducing the MCA and only received the following boilerplate statement from a spokesperson:

"In the last decade, how we do business has changed so we must evolve the purchase experience to better help our customers innovate and thrive. Built with the needs of our customers in mind, a new digital buying process will streamline the experience customers have with Microsoft. This model expands and enhances billing and cost management capabilities, and comprehensive subscription and account management features, giving customers greater visibility, transparency, and agility for managing their purchases and subscriptions." 

Microsoft has been busy signing up more certified Microsoft Cloud Solution Providers over the past couple of year, who are charged with selling the full range of Microsoft cloud services and control the end-to-end customer billing process. While Microsoft officials have emphasized that these CSPs need to do more than just resell Microsoft's software and services (they are expected to provide value-add through their own managed services, too), the introduction of MCA seems to have caught many of these companies unaware.

There may be a hint about part of the reason Microsoft is making this move in a frequently-asked-questions document about the Microsoft Customer Agreement (MCA). And it all has to do with "digital transformation." Microsoft is labeling more of its customer wins these days as "partnerships," and touts that it often embeds its own engineers within a customer's site to help craft custom software and services with that customer. Such an arrangement may lessen significantly the traditional role of third-party partners.