Azure Plan for Indirect Resellers: What Changes, What Does Not, and the February 2022 Deadline
TL;DR
- Azure Plan, introduced in November 2019 as part of the new commerce experience, aligns Microsoft channel billing models and prices Azure utilities at pay-as-you-go rates.
- Microsoft is replacing traditional CSP Azure margin with Partner Earned Credits, which require the partner to hold Admin on Behalf of access in the customer tenant.
- Moving a subscription to Azure Plan is an API call with no resource migration, no downtime, and no service disruption.
- Microsoft removes all margin from the legacy Azure offer in February 2022, which makes that the practical deadline for moving every subscription to Azure Plan.
- The headline benefit of Azure Plan for MSPs is Azure Cost Management: spend visibility, forecasting, and Advisor recommendations per subscription.
Note: this guidance is written for indirect resellers.
Microsoft's new commerce experience reached Azure CSP in November 2019 under the name Azure Plan (opens in new tab), and through 2021 Microsoft has been moving everyone off the traditional Azure offering in a phased approach, with CSP providers helping resellers transition. The questions below are the ones we hear most from partners working through that move.
What is Azure Plan replacing, and why?
Azure Plan aligns all billing models in the Microsoft channel and provides Azure utilities at pay-as-you-go rates. It also unlocks Azure Cost Management for optimizing spend.
Microsoft's stated direction is for partners to attach value-added services to Azure rather than living on resale margin, and the model is built so multiple providers can service the same customer for different parts of their business.
Where did the margin go?
Microsoft is removing all margin in favor of what it calls Partner Earned Credits (PECs). A partner is eligible for PECs when it holds Admin on Behalf of (AOBO) access in the customer's tenant. If a distributor provisions your Azure subscriptions, it is likely the distributor will choose to pass you the equivalent of your previous margin through these PECs.
Billing timing changes too: the billing period shifts to the calendar month, replacing the old 28th-to-28th cycle. Working through a distributor, the date you are actually billed should not change.
Is there a migration to run?
No resources move. Distributors should give you an automated way to switch a subscription to Azure Plan, and under the hood it is simply an API call. There is no downtime and no disruption in service.
What does the MSP actually gain?
The main benefit is visibility through Azure Cost Management: current spend, a forecast for the month, Advisor recommendations, and the ability to share utility-level visibility with your customer.
Does Azure Plan lock customers to one CSP provider?
No. Change of channel works across CSP providers and distributors without any downtime; it is simply a transfer of ownership.
When does this stop being optional?
Microsoft has announced it is removing all margin from the existing Azure offering in February 2022. We suggest having every Azure subscription moved to Azure Plan by then. All net new Azure subscriptions you purchase should already default to Azure Plan. Microsoft's partner blog post (opens in new tab) has the full timeline.
Frequently asked questions
Does the billing date change under Azure Plan?
The billing period shifts to the calendar month, replacing the previous 28th-to-28th model. If you work through a distributor, the date you are billed should not change.
Can a customer move between CSP distributors once they are on Azure Plan?
Yes, without limitation. A change of channel across CSP providers is a transfer of ownership and involves no downtime.
Do net new Azure subscriptions need to be moved?
No. All net new Azure subscriptions you purchase should already default to Azure Plan; the migration work applies to existing legacy subscriptions.
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Written by
Nick Ross
CEO · Microsoft MVP · Founder, T-Minus 365
Nick is not just a CEO, he's a respected thought leader and influencer in the MSP space. Tens of thousands of MSPs learn through his YouTube channel, T-Minus365. Nick has been honored as a three-time Microsoft MVP for his educational content; his expertise and influence are the backbone of our mission, ensuring that you are in the best hands when it comes to security.
Nick joined Pax8 in 2017, where he would ultimately oversee product management for PSA and Microsoft integrations. Following his tenure at Pax8, Nick has continued to demonstrate his leadership prowess as an executive at various MSPs, culminating in his most recent role at Sourcepass.
Nick holds a Bachelor's Degree in Business Management from Florida State University, as well as a Minor Degree in Entrepreneurship. In his free time, Nick is an avid hiker, reader, and fitness-junkie.
