Microsoft is rolling out a major update to its Cloud Solution Provider (CSP) program, a strategic shift towards solidifying its position as the go-to platform for small and medium businesses (SMBs) embracing AI and cloud technologies.
Announced by Nicole Dezen, Microsoft’s Chief Partner Officer, these updates include new subscription options, more partner incentives, improved tools for tracking performance, and new standards for who qualifies for rewards.
The goal is to help partners , the resellers, consultants, and service providers who bring Microsoft’s products to market , grow faster while helping their customers do the same.
Let’s unpack what this means, why it matters, and how it fits into Microsoft’s bigger picture.
Small and mid-sized businesses might not grab headlines like Fortune 500 giants, but together, they make up the backbone of the global economy.
Microsoft estimates the total addressable market (TAM) for SMB digital transformation is a staggering $661 billion and that’s just for fiscal year 2025 and beyond.
Most of these businesses don’t have in-house tech departments. They rely on trusted advisors like Microsoft CSP partners, to guide them through cloud migrations, cybersecurity upgrades, and increasingly, AI adoption.
“These aren’t just IT salespeople,” said a cloud industry analyst. “CSPs are strategic advisors. When Microsoft invests in partners, they’re really investing in their own ability to reach customers at scale.”
One of the most talked-about updates is the introduction of three-year subscription terms for popular Microsoft 365 offerings like E3 and E5, starting June 1, 2025.
Until now, CSPs could only offer customers monthly or annual subscriptions. That made sense for flexibility, but it also meant more work, constant renewals, pricing uncertainty, and less predictability for both customers and partners.
Now, CSPs can offer more enterprise-like deals: three-year plans with upfront, triennial, or annual billing options. Microsoft says this creates consistency across its sales channels, including those moving off expiring Enterprise Agreements, and also gives partners a better chance to build long-term relationships with customers.
For SMBs, it’s a chance to lock in pricing, reduce paperwork, and focus on running their business rather than juggling software renewals.
Promotions and discounts: sweetening the deal
To encourage uptake of these new plans, Microsoft is launching 10% discount promotions starting June 9 for customers new to Microsoft 365 E3 or E5. Another discount for E5 Security and Compliance “mini suites” follows on July 1.
Also, the company is extending its Microsoft 365 Copilot “Getting Started” promotion through June 30, 2025. That’s good news for partners looking to help customers adopt AI tools without a hefty upfront cost.
Beyond pricing, Microsoft is also delivering more intelligence, literally. On April 1, it rolled out AI-powered automation to handle subscription upgrades.
This means fewer manual cancellations, less duplication of licenses (a common headache), and faster support, Microsoft claims resolution times have dropped to under a day.
There’s also a new channel transfer interface in the Partner Center to help CSPs migrate customers from expiring Enterprise Agreements into CSP deals without losing critical services like Microsoft Teams.
And starting in June, Microsoft will give partners access to Net Paid Seat Adds (NPSA) reporting — a metric previously reserved for internal teams. This gives CSPs a clear picture of how many new users they’re adding over time, helping with goal setting, performance tracking, and business planning.
Starting October 1, 2025, Microsoft will require CSPs, including direct billers, distributors, and resellers, to meet new authorization requirements based on their expertise by solution area (e.g., security, modern work, or Azure).
That means to qualify for incentives in FY26, partners will need to show they’re not just selling licenses, but also delivering real customer outcomes.
While some smaller partners might find the new bar challenging, Microsoft argues that it’s about quality over quantity. It wants a partner ecosystem that’s equipped to deliver on the promise of AI, cybersecurity, and cloud modernization.
Partners and customers will have more chances to learn about these updates during Microsoft’s upcoming events. On May 6, the company will host a webinar focused on CSP growth strategies and AI adoption. Then, on July 15, the “MCAPS Start for Partners” event will dive deeper into Microsoft’s FY26 plans.
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