Extra, extra: Microsoft is changing up requirements for those in its Cloud Solution Provider (CSP) program, so listen up.
On May 1, 2025, Microsoft announced new authorization and CSP incentive eligibility requirements that will take effect on October 1, 2025. The idea is that these new authorization requirements help partners in the Microsoft CSP ecosystem stay compliant, affecting direct bill partners, distributors (formerly indirect providers) and indirect resellers (hey, that’s you, Pax8 partner).
Take a look at the new requirements in the chart below.
There will be more details to follow, but the main point of this announcement is that these changes are “designed to fuel growth in the small and medium enterprise customer segment through our partners,” according to Nicole Dezen, Microsoft’s Chief Partner Officer and Corporate Vice President for the Global Partner Solutions Organization. They’re also required, if you want to maintain your CSP status in FY26, which for Microsoft is July to June.
It’s important to note that these changes align with Pax8’s core values, as they’re designed to not only help partners stay compliant but also thrive. As we said in our recent New York Times ad, “Times Change. Technology is moving forward. The way companies buy, sell and scale has evolved. And yet, the biggest names in the industry are still clinging to the way it’s always been done ….” This update confirms Microsoft agrees: Things need to change in order to progress in this industry and the current moment.
What Else Is Changing?
As part of its announcement, Microsoft is also planning to introduce three-year commitment SKUs of Microsoft 365 E3 and E5. This adjustment follows the changes in eligibility for Enterprise Agreements, with CSP now being the chosen method of transacting. These three-year commitments are designed to replicate some of the attributes of Enterprise Agreements, and as the name suggests, they’re aimed at larger customers — the minimum thresholds are at more than 100 seats.
Just note, for many Pax8 partners and anyone else servicing small and medium-sized businesses (SMBs), three-year SKUs may not be a particularly advisable route — there are payment and contractual constraints associated with these SKUs, and our initial recommendation for driving longer-term commitment with your customers would be to guide your customers toward a long-term AI-driven strategy. They may be thinking more year-to-year or even month-to-month, compared with their enterprise counterparts. You can be a part of that journey by advising and supporting them with an outcome-based strategy — and we’re here to help, support and guide you on this.
What Are the Reasons Behind Microsoft’s Decision?
Simply put, Microsoft is working toward the same future as Pax8. To support partners on their transition from a break-fix model to managed service provider (MSP) to trusted business adviser, Microsoft relies on organizations like Pax8 to provide more than a licence transaction; we also offer guidance on this journey and try to help partners stay up to date and make these transitions as smoothly as possible.
The Pax8 Marketplace, coupled with enablement through Pax8 Academy and extra bandwidth and expertise from Pax8 Professional Services, is here to help partners like you grow their business, be more efficient and to reduce your risk. Also, we host a monthly Microsoft update to review critical updates, share key details and go over actions you should take to generate success — sign up here. We want to guide you our through this period of change — so you can stay up to date while unlocking new opportunities like AI through Microsoft Copilot.
What Is the Impact to Pax8 Partners?
We want to reassure you that our partners (indirect resellers) will not see any major changes to their business as a result of these changes. This means our existing relationships and collaborations will continue as usual, ensuring stability and continuity in our operations (and yours). Your Pax8 team is on hand to unpack this. If you need support or have questions, contact your channel account manager.
How Am I Impacted if I’m Not a Pax8 Partner?
Firstly, we hope you’re doing OK. No one likes sudden change, and we understand this can be disruptive to your business. We realize you may have had longstanding relationships with your current provider. If we can help you, we’d be happy to show you around the Pax8 Marketplace and everything we offer so you can kick the tires first.
One thing we can say is that we understand Microsoft better than most, as the 2024 Microsoft Global Partner of the Year. And with a community of more than 40,000 partners like you, we can empathize with your day-to-day pains and help you capitalize on opportunities. For example, our Marketplace has built into it something called Opportunity Explorer that helps you identify sales opportunities, reveal security gaps and define recommendations across comparative vendor solutions — pretty cool, right?
Still Have Questions? Let’s Chat
So, for Pax8 Partners, we want to reassure you that you’re in safe hands and on the right path. For those being forced into reassessing their technological relationships due to these changes, we want to chat about how we can help make it easier. Get in touch.
