What is a CSP?
A Cloud Service Provider (CSP) is a company that offers a range of cloud computing services to individuals, businesses, and organizations. These services can include infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS). CSPs enable customers to access and use computing resources such as servers, storage, databases, networking, software, and analytics over the internet, typically on a pay-as-you-go basis.
CSP models
There are two primary models for CSPs in the Microsoft ecosystem: Direct CSP and Indirect CSP. Each model defines how the CSP interacts with Microsoft and their end customers.
The type of CSP model you implement depends on factors such as your company's size, resources, market strategy, and desired level of control. Direct CSPs have more control and responsibility, requiring significant investment and capabilities. Indirect CSPs benefit from the support and infrastructure of an Indirect Provider, making it easier to enter the market and focus on building customer relationships.
Direct CSP (also known as Direct Bill Partner)
- Direct Relationship with Microsoft: Direct CSPs have a direct contractual relationship with Microsoft. They purchase cloud services directly from Microsoft and resell them to their customers.
- Billing and Support: Direct CSPs handle all aspects of billing and support for their customers. They manage invoicing, payments, and customer service directly.
- Requirements: Becoming a Direct CSP typically requires a significant investment in infrastructure, support capabilities, and meeting certain Microsoft requirements such as a minimum revenue threshold.
- Control: Direct CSPs have more control over the customer relationship, pricing, and service delivery.
Indirect CSP (also known as Indirect Reseller)
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Two-Tier Model: Indirect CSPs operate within a two-tier distribution model, working with an Indirect Provider (also known as a Distributor). The Indirect Provider has the direct relationship with Microsoft.
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Support from Indirect Provider: Indirect CSPs purchase cloud services from an Indirect Provider, who handles billing, support, and other administrative tasks. The Indirect Provider serves as an intermediary between Microsoft and the Indirect CSP.
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Lower Barriers to Entry: Becoming an Indirect CSP typically has fewer requirements and lower costs compared to a Direct CSP. This makes it more accessible for smaller companies or those new to the cloud services market.
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Shared Responsibilities: The Indirect Provider assists with billing, customer support, and other backend operations, allowing the Indirect CSP to focus on sales and customer relationships.
Key differences between direct and indirect CSPs
| Feature | Direct CSP | Indirect CSP |
|---|---|---|
| Relationship with Microsoft | Direct contractual relationship with Microsoft | Works through an Indirect Provider (Distributor) |
| Billing and Invoicing | Handles billing and invoicing directly with customers | Indirect Provider handles billing and invoicing |
| Support | Provides direct customer support | Indirect Provider often provides support |
| Requirements | Higher entry requirements, including revenue thresholds and infrastructure | Lower entry requirements, more accessible |
| Control | Full control over customer relationship, pricing, and service delivery | Shared responsibilities with Indirect Provider |
Updated: Jul 09, 2024