Category: News | Published: 2025-07-17
Reshaping the Channel
For years, Microsoft relied on a network of accredited Large Service Providers (LSPs) to handle the sale and renewal of its three-year Enterprise Agreements, i.e. the long-term software licensing contracts tailored to large organisations. These deals provided LSPs with steady commission income and a foothold in enterprise IT procurement. But that model is changing.
Microsoft has begun reclaiming control of these high-value contracts, handling renewals directly through its own sales force rather than via partners. The change, first noticed in 2023, is accelerating fast. For example, Microsoft reportedly took back control of around a third of EA renewals last year and is expected to reclaim almost all of them by January 2026.
It seems that the company is not just shifting processes but is cutting off financial incentives too. For example, global EA commission payments to LSPs stood at approximately $2.5 billion in 2023, according to US Cloud, a Microsoft support partner. That figure dropped to $1.67 billion in 2024 and is expected to fall to just $583 million in 2025. By 2026, payouts are projected to stop entirely.