Want to sign an Azure Consumption agreement? Soon, MCA may be your only option

Mary Jo Foley is the Editor in Chief at Directions on Microsoft. Before joining Directions, Mary Jo has worked as... more

It’s becoming increasingly apparent that Microsoft is forging ahead with its plan to move more of its customers off Enterprise Agreements (EAs) and onto Microsoft Customer Agreements (MCAs). Recently, Directions on Microsoft shared details about Microsoft’s plans to move EA Level A customers to MCAs. Now we also hear Microsoft is aiming to have new Microsoft Azure Consumption Commitment (MACC) agreements signed under MCAs, with no more options under an EA.

An MCA is a relatively new Microsoft licensing agreement that, up to this point, had been primarily for smaller and mid-size customers. MACC is an agreement via which enterprises commit to spend a set amount on Azure and other cloud services over three years. It is one tool customers can use to try to manage their cloud spending and maximize their savings if their usage is well understood.

This MCA-MACC change is part of a growing push by Microsoft to make EAs available only for its largest customers. Microsoft’s not-so-secret strategy is to move more of its smaller and mid-size enterprise customers to resellers and integrators and deal directly with the most lucrative, biggest customers itself.

However, this MCA-for-MACC shift isn’t impacting only smaller companies. In fact, the change already has begun impacting some larger companies over the past four to five months, our contacts tell us. Directions hears that even some 50,000-employee-size customers have been told that MACC is placed under MCA or nothing.

MCA for MACC: It’s not just about money

Microsoft has other, somewhat less obvious reasons for getting more customers to go with MCAs. The back-end systems associated with EAs are old and difficult to maintain. Microsoft wants to move more customers off of these systems, and is starting with smaller customers first, as they tend to be less complex organizations with simpler needs (and tend to be in less of a position to push back).

Larger organizations are the next target, and it’s no doubt easier to try to get them to go the MCA route more slowly. From Microsoft’s perspective, Azure doesn’t bring along with it the licensing rule complexity and license entitlement data integrity issues that other Microsoft products typically do. That makes it a good place for Microsoft to start the slow march toward the ultimate destination: MCAs everywhere.

We asked Microsoft if the new MACC via MCAs is considered a requirement and when it will become official. A company spokesperson said the company had “nothing to share.”

MCA doesn’t necessarily mean less complexity

Commercial customers currently have a variety of ways to purchase Microsoft cloud services including:

An EA (either directly from Microsoft or through a partner/reseller)
An MCA directly from Microsoft or a Microsoft Cloud Solution Provider (CSP)
Directly from Microsoft, online

In 2019, Microsoft made Azure available via the MCA. Starting that year, new and renewing corporate customers were no longer able to purchase Azure Services through an Azure only Server & Cloud Enrollment (SCE) under an EA. Over the next few years, Microsoft made Microsoft 365, Dynamics 365, the Power Platform, and Windows 365 available via the MCA, as well.

Microsoft has been encouraging customers who purchase through EAs to consider the Microsoft Customer Agreement for Enterprise (MCA-E). The pitch: Buy through Microsoft via an MCA and get access to “enhanced benefits” under an MCA-E. Among the kinds of MCA-E benefits Microsoft touts are things like one streamlined digital agreement, flexible billing account structure, “intuitive” and customizable invoices, and simplified tenant management via the Microsoft Admin Center.

However, some of these benefits are seemingly temporary. For example, the existing Azure Support offer for EA and MCA-E customers ended as of June 30, 2024. Beginning July 1, 2024, all customers who do not already have a paid support plan, such as Microsoft Unified, ProDirect support, etc., must purchase a support plan if they wish to maintain technical support coverage.

Besides possibly losing “enhanced benefits,” what’s the downside of moving from complex, lengthy EAs to far more succinct and simple MCAs? Under an MCA, customers cannot purchase or renew Software Assurance for perpetual (non-subscription) licenses for products like Windows Server and SQL Server. Under an MCA, customers lose the ability to purchase certain Microsoft 365 User and Device Subscription Licenses (User SLs and Device SLs, respectively).

There are also inconsistencies between the EA stack and MCAs that can drive some legal departments crazy. Trying to maintain “parallel” contracts can create ambiguities as to which and what applies when and make it more difficult for organizations to understand exactly to what they’re committing.

If and when Microsoft makes its MACC via MCA policy official, customers should be prepared to have to cobble together more purchasing programs (such as Open Value plus MCA) if they want to maintain at least some of the same licensing benefits they’ve got currently.