Understanding the True Value of a Microsoft (CSP) Cloud Solution Provider
By: Brian Barnes, Director of Solutions Architecture, Coretek
Cloud services are gaining great momentum across the globe. Many different options are available, but how do you know where to start? Who are the best partners, solutions, and contractual arrangements for your use cases? Is it secure? How can you not get “locked-in” to long term costs?
Healthcare organizations that are evaluating “Public-Cloud” based solutions more than likely have an existing Microsoft Enterprise Agreement (EA). Those organizations larger than 500 users will most likely have a three-year EA agreement in place which includes Software Assurance on all product for that term. Many EA agreements also include an annual Microsoft Azure commit as part of the contractual agreement. A fairly standard commit for a cloud interested healthcare organization is typically $50K – $75K of consumption per year.
The benefits of executing an EA with Microsoft are many – including that the overall price of the EA is set by Microsoft, without markup from resellers. In addition, the cost of the three-year contract is broken down annually as to spread the costs instead of paying the whole amount up front. For larger Healthcare Systems managing numerous hospitals in a region or across the country, one of the biggest benefits is the ability to “True-up” once a year. This means an organization can add products, add or remove users, or increase services without the extra work of additional purchase orders, approvals and paperwork during the term. While this provides a great advantage of simplicity, it also creates some disadvantages.
EA “True-up” charges are one-time payments. Companies are contractually obligated to “True-up” annually, which means the entire cost of the remainder of the contract will be owned at the True-Up time. This unfortunately includes Azure based consumption commits as well. If you don’t consume what you committed to at time of true up, the unused consumption does not carry over to the next year and you have paid for something you haven’t used.
The Microsoft Cloud Solution Provider (CSP) Program allows Microsoft Partners to provide a cohesive and streamlined program for Pay-As-You-Go Microsoft consumption. For example, Office & Azure Cloud reseller relationship is the mechanism that grants a partner the ability to manage a customer’s services or subscriptions.
Cloud computing has become a serious force in the IT world. The advantage for a hospital provider should be seen through simplification and bundling of services, migrating support, and simplified billing. CSPs offer additional value-add services that other partners cannot such as:
- Manage your software licenses, including renewals and software upgrades
- Flexibility, only for what you need and can increase or decrease your licenses on the spot and at any time
- Transparent billing
- No ownership fixed costs
- First line IT tech support for all licenses
- Cost-effective pricing packages created specifically for your cloud service needs
- Personalized service and support from the CSP
In addition, leading CSPs such as Coretek provide customer portals as part of their value-added services which provide additional benefits such as custom consumption reporting, online support ticket entry and status viewing, scorecarding of services, and automation services. With a CSP, you pay a monthly fee for only the Azure consumption, Azure Services, Microsoft licenses and software you need. This becomes much more convenient and cost effective for larger organizations. Customers pay a predictable monthly bill and understand how their costs change with detailed billing. For large organizations, the discounts in CSP are not as large as the ones available through the EA program. However, there is no up-front commitment, payments, or unused licenses or consumption.
A customer can leverage a Microsoft CSP for the entirety of their cloud usage, or to supplement existing licensing such as an existing EA. The key differentiator to note is that support, customized billing, automation and additional managed services are accessible to clients only via a Microsoft CSP. (figure: a2)
Now, you truly have a choice of which works best for your organization or even possibly mixing both. A common scenario for solid ROI is during mergers and acquisitions. For Healthcare organizations that are growing, merging acquired hospital systems together provides an opportunity to onboard users and systems at their own pace instead of paying upfront and estimating what they can do within a given year. Other examples include organizations that have fluctuations in employee base, such as a teaching hospital, may have fluctuations in residents/students working within their hospital and may use CSP licensing to supplement their EA for these fluctuations
To compare the main benefits of a Microsoft Cloud Solution Provider (CSP) versus what can be managed as part of an EA, I have provided a chart to highlight some of the CSP features.
EA or CSP
|Point of Comparison
|Number of Users
|True up Billing
|Minimum 36 months
|Pay as you go
|All Microsoft Products
|Office 365, SharePoint Online, Office Pro Plus, Dynamics Online, Exchange Online, Skype for Business Online, Enterprise Mobility Suite, Project, Visio
Latest Versions: Word, PowerPoint, Outlook, OneDrive, Publisher, Skype, Access
All Azure Services
|Ability to Add/ Remove Users
|Anytime; Annual True-up Billing
|Pay based on usage
The table above breaks down the main differences between Microsoft’s Enterprise Agreement and the Cloud Solution Provider program.
A growing and exciting use case is Desktop in the Cloud, sometimes referred to as DaaS, Microsoft CSP providers are positioning Cloud hosted desktops for their healthcare customers, and based on monthly use, providing a single bill for all Azure, Office and Windows Desktop licenses per month per user. CSP DaaS customers only pay for what their users consume and have the ability to gain customized charge back and billing for specific portions of a customer’s organization. For example, charging ambulatory or non-affiliated physician groups a desktop usage bill!
A big reason why these customized DaaS solutions are now possible is the support of per-user licensing and the ability to procure Windows Client IS Licenses under a Microsoft CSP partner.
“Windows 10 Enterprise E3 launched in the Cloud Solution Provider (CSP) channel back in September 2016. Windows 10 Enterprise E3 in CSP is an offering that delivers, by subscription, exclusive features reserved for Windows 10 Enterprise edition. Previously, only organizations with a Microsoft Volume Licensing Agreement could deploy Windows 10 Enterprise to their users. Now, with Windows 10 Enterprise E3 in CSP, organizations can more easily take advantage of Windows 10 Enterprise features on a pay as you go model.” https://docs.microsoft.com/en-us/windows/deployment/windows-10-enterprise-e3-overview
Combined with other Microsoft O365 and solutions that support CSP or MSP (Managed Solutions Partner) third-party products to augment the desktop, customers can leverage a single partner for all their services and product needs!
Four Take-aways for next steps:
- Review your existing Microsoft EA agreement to understand your options.
- Define specific Use Cases to start the cloud journey.
- Use the Microsoft Total Costs of Ownership Calculator (TCO) to compare the cost of an on premise solution to an Azure deployment – https://azure.microsoft.com/en-us/pricing/tco/calculator/
- Find qualified Microsoft Partners by levering the partner search page – https://www.microsoft.com/en-us/solution-providers/home.
More AEHIT News Volume 2, No. 4:
- 2019 and Beyond – AEHIT’s Continued Success – Zach Donisch, Membership Director, AEHIS, AEHIT, AEHIA
- Moving Workloads to the Cloud – John Hendricks, Senior Management Consultant, Huntzinger Management Group
Looking to contribute to the AEHITechnology Newsletter? Email your contributions to [email protected].