Microsoft Enterprise Agreement vs CSP: which is right?

The Microsoft Enterprise Agreement (EA) is a three-year volume licensing contract, designed historically for organisations with 500 or more users. Following changes Microsoft introduced in 2024, the practical entry point in most regions is now around 2,400 users. The Cloud Solution Provider (CSP) programme is a more flexible, partner-led alternative, available with monthly, annual or three-year terms and no minimum user count.

CSP suits the great majority of UK SMBs and mid-market firms. EA suits larger organisations that benefit from a price-locked, three-year direct relationship with Microsoft. Lanmark is a Microsoft Direct Cloud Solution Provider and advises businesses on which route fits their position.

This article explains both programmes, sets out a side-by-side comparison, walks through three buyer scenarios and answers the questions finance directors and IT managers ask most often.

What is a Microsoft Enterprise Agreement (EA)?

The Enterprise Agreement is Microsoft’s volume licensing contract for larger organisations. The contract runs for three years, locks in pricing for that term, and is purchased through a Microsoft Licensing Solutions Partner. An annual True-Up reconciles licence usage at the end of each year, so growth in headcount or service consumption is paid for retrospectively rather than at the moment of change.

EA was historically pitched at organisations with 500 or more users. In 2024 Microsoft repositioned the programme towards larger customers, with the practical entry point in most regions moving to around 2,400 users. Smaller organisations are now generally directed to CSP.

The advantages are real for the right buyer. Three-year price-locks help finance teams budget with confidence, the direct relationship with Microsoft can support more complex commercial negotiations, and larger organisations with stable consumption benefit from the simplicity of a single contract.

The disadvantages also need to be understood:

• The three-year term is a commitment even when business circumstances change.
• Reducing licence counts mid-term is generally not possible.
• The True-Up cycle can produce unexpected bills if usage has grown.
• The 2,400-user entry point puts EA out of reach for the SMB and lower-mid-market segments where most UK businesses sit.

What is a Microsoft Cloud Solution Provider (CSP) agreement?

The Cloud Solution Provider programme is Microsoft’s modern, partner-led licensing route. Rather than purchasing directly from Microsoft, the customer purchases through a Microsoft partner who acts as the licensing, billing and support touchpoint. Following the New Commerce Experience changes, CSP is available with monthly, annual or three-year terms.

CSP has no minimum user count. Licences can be added at any point and, on monthly terms, reduced at the next renewal. Support is provided by the partner, which for most SMBs is a positive rather than a constraint, because a UK partner who knows the business is faster to deal with than Microsoft global support.

There are two CSP routes. Indirect CSP partners purchase licences through a distributor and resell them. Direct CSP partners hold a direct billing and support relationship with Microsoft. Direct CSP partners typically offer more competitive pricing (no intermediary margin) and faster support escalation (direct access to Microsoft’s partner channels). Lanmark is a Microsoft Direct CSP partner.

For most UK businesses below the EA threshold, CSP is the appropriate model.

Side-by-side comparison

EA is built for scale and predictability. CSP is built for flexibility and partner-led support. The right answer is rarely close once the firm’s size and operating profile are clear.

Which is right for your business: three scenarios

Licensing decisions are best made with reference to the firm’s actual position rather than generic guidance.

Scenario 1: a growing SMB

CSP is almost always the right answer. The flexibility to add licences as new hires join, the absence of a three-year commitment when plans may evolve, and the partner-led support model all fit how a growing SMB operates. Annual or three-year CSP terms can lock in price where the firm wants budget certainty, while monthly terms preserve flexibility for the parts of the estate that change more frequently.

Microsoft 365 Business Premium or Microsoft 365 E3 with Defender add-ons, sourced through a Microsoft Direct CSP partner, delivers enterprise-grade tooling without the EA overhead.

Scenario 2: a mid-sized firm with stable headcount and a three-year horizon

This is the band where the question is genuinely worth examining. The 2024 changes have lifted the practical EA threshold above this range, so the headline answer remains CSP for most firms. Three-year CSP terms now provide much of the price-lock advantage that historically only EA offered. EA can still make sense for specific reasons: parent-group licensing alignment, a Microsoft incentive tied to a wider commitment, or complex licensing across multiple subsidiaries. In most cases the decision is between monthly, annual and three-year CSP terms rather than between CSP and EA.

A licence review that maps actual usage against the available licensing combinations is the most efficient way to settle the question. Firms in this band often find they are paying for plan tiers above their actual requirement, or could consolidate add-ons into a single higher-tier plan at lower total cost.

Scenario 3: 1,000 plus users with complex licensing needs

For larger organisations approaching or above the 2,400-user threshold, EA may genuinely be the appropriate route. Where the firm has stable headcount, multi-year planning visibility and the procurement maturity to manage a Licensing Solutions Partner relationship, the EA price-lock and the simplicity of a single three-year contract can be commercially valuable. EA is not the wrong answer for everyone. It is the wrong answer for most SMBs.

Firms in this band benefit from a structured comparison of EA pricing against three-year CSP pricing, including support model, escalation paths and licence-management overhead under each route.

Common questions from FDs and IT managers

We are on EA but our headcount has dropped. Are we overpaying?

Possibly. EA is sized to peak rather than current headcount, and the True-Up mechanism reconciles upwards rather than downwards within a term. A licence review will identify unused licences and whether a route change at renewal would deliver savings.

Will switching to CSP affect our Microsoft support?

For most firms, support improves. CSP support is delivered by the partner, who knows the firm’s environment, has direct Microsoft escalation paths under Direct CSP, and is faster to engage than Microsoft global support. For firms accustomed to Microsoft Premier Support, the comparison is more nuanced and worth examining specifically.

Can a CSP partner like Lanmark match what our current EA reseller offers?

For licensing and Microsoft support, generally yes. EA resellers typically focus on the licensing transaction. A Direct CSP partner that also provides managed IT support combines licensing, day-to-day support and security under one relationship, which for most SMBs is simpler than juggling separate suppliers. See our IT support packs.

How Lanmark helps you make the right call

Our Microsoft 365 licence review is a no-commitment way to find out whether you are on the right licensing model and whether savings are available. It produces a written summary of findings, including a like-for-like comparison of your current position against the available options.

For firms that decide to switch route or partner, Lanmark manages the transition in line with renewal timing so that no period is paid for twice. For the plan-level decisions that follow, see our Microsoft 365 licensing guide for finance directors.

Talk to Lanmark about your Microsoft licensing

If you are renewing an EA, evaluating CSP, or unsure whether your current licensing position is right, see our Microsoft 365 services and contact us to arrange a call.