Microsoft Partners reselling Azure – Are you aware of Azure Plan?

Disclaimer: This is my opinion—please review the supporting materials and draw your own conclusions. Corrections are welcome; if you’re affiliated with Microsoft and wish to clarify or discuss anything, please get in touch.

Confused that Microsoft Azure isn’t the same as Azure Plan?

In recent weeks, it’s become clear that some Microsoft Partners may be unaware of the changes under “Modern Commerce” or “Azure Plan.” Much of the communication around Azure Plan centers on the “Customer Agreement”—a distinction that matters more to Microsoft than it may to us.

My take? Once you slog through the legalese about agreements, it’s easy to miss the real changes—like those radically impacting margins and incentives.

Modern Commerce, launched in 2019, introduces the Azure Plan as the preferred Azure resale mechanism. The old model used the “Microsoft Azure” offer, which is still confusingly named, given Azure Plan also delivers Microsoft Azure services.

Key differences at a glance

Feature	Microsoft Azure “old”	Azure Plan “new”
Margin	Up to 15% for direct partners; varies but generally <15% for indirect partners	0%
Subscriptions	Created & owned by CSP partner via Partner Center	One Azure Plan per customer (with multiple subscriptions) created within Azure
End Customer Pricing	Retail prices set by the CSP partner	Pricing is standardized across all partners at Microsoft’s retail rates
Rebates	Incentives vary depending on active promotions	Partner Earned Credit (PEC) replaces margin—dependent on maintaining delegated admin rights
Cost Management	Partner must provide customer cost visibility	Azure Portal exposes retail-rate consumption costs via policy-enabled feature
Billing Period	Varies per partner—set when joining CSP (e.g., the 8th of the month)	Aligned with calendar months

The Timeline

Phase 1 – 21 July 2021

All new Azure CSP transactions must go through the Azure Plan. Old offer subscriptions remain functional.

Phase 2 – During 2022

All rebates and partner margins will be removed from the legacy Azure offer.

Phase 3 – TBD (6-month notice provided)

All existing subscriptions will be migrated to Azure Plan.

Latest announcement on Azure Plan timelines

Partner Earned Credit (PEC)

PEC replaces traditional margin. To earn credit, partners must retain admin permissions on tenant services.

You must keep admin rights 24/7 to earn that day’s credit. Losing them—even briefly—disqualifies the day.
PEC does not apply to:
- Azure Reserved Instances
- Third-party marketplace products
- Azure Spot VMs
It’s a credit against Microsoft spend, not a cash rebate.

This model rewards partners providing real value via ongoing management.

How to Move to Azure Plan

The transition is straightforward—see Microsoft’s doc on migrating customers:
Move customers from current Azure offers to Azure Plan (Partner Center)

Cost Visibility

With Azure Plan, customers can see consumption costs directly in Azure Portal (policy-enabled). This brings parity with direct purchases and resolves limitations under the CSP model.

Learn more about Azure Cost Management for partners:
https://docs.microsoft.com/en-us/azure/cost-management-billing/costs/get-started-partners

Summary & Recommendations

Act quickly: get clarity on how Azure Plan impacts your commercial deals.
Plan transitions carefully—technical migration is easy, but customer agreements may need updating.
Pricing transparency is sharper; ensure your pricing strategy reflects the new market reality.

My Opinion:
Though the changes seem tough, they appear to be built around rewarding partners who deliver actual value through managed services—rather than transactional reselling. Azure Plan brings standardization and visibility that could level the playing field.