Microsoft Billing Update

2021 is already well on its way and with that Microsoft has introduced a significant change to the CSP business, this time regarding the billing currency for new commerce offers. But what does this mean for your CSP business?

What has changed?

Starting with the obvious, what has happened? Well, In the European Union (EU)/European Free Trade Association (EFTA) region, all new offers in the Cloud Solution Provider (CSP) program will from now on use the partner’s billing location instead of the customer’s billing location. By doing this, the partners will be billed by Microsoft based on the currency of their current location currency, not their customer’s currency.

The offers that will be directly affected by this change are as follows: Azure subscriptions that are part of an Azure plan, Azure reservations, server subscriptions, perpetual software, and Microsoft commercial marketplace purchases in the CSP program.

What does this mean?

In order to get ready for this change, you first need to be aware of how implementation process will go down, in this case, in two different phases:

Phase 1: New customers purchasing a new commerce offer in CSP

Starting mid-January 2021, partners who have or had new customers purchasing new commerce offers will be billed for those purchases in the partner’s location currency. For the existing customers, or those who have already purchased new commerce offers in CSP, these will continue to be billed in the currency of the customer’s billing location during this phase.

Phase 2: Customers who purchased a new commerce offer in CSP before January 2021

Throughout the year 2021, Microsoft will transition the billing of existing customers who purchased a new commerce offer in CSP before January 2021 from the currency of the customer’s location to that of the partner’s location. Partners will be notified before this change is implemented.

What are the benefits?

You may have been wondering who in the end is benefiting from all this, well these changes will allow for a reduction in complexity with multicurrency invoicing, which will in turn frees up time and resources currently associated with these reconciling accounts.

Furthermore, the Partners will receive a consolidated invoice in a single currency and will no longer receive an invoice for each customer’s location currency. In addition to that, regarding the incentive pay-outs, these will now all be in the same currency as the partner’s invoice currency. Partners can therefore grow without currency exchange overheads.

With regards to partners who have not yet adopted new commerce offers, this change aligns with the previous partner billing model, enabling partners to easily transition to the new commerce experience in CSP.

In conclusion, although it may seem like a lot of work, these changes will benefit the Partner and allow for a better flow of the billing process, saving time and money.

For more information on how to get your CSP ready for this change, visit the Microsoft Operations Gallery or contact us!