Microsoft 365

Where Does Your MSP Source Microsoft 365 Licensing? Uncovering the Facts

Navigating the world of Microsoft 365 licensing can be complex, especially for Managed Service Providers (MSPs) looking to source licenses for their clients. With various options available, it’s crucial to understand how and where your MSP sources these essential licenses. This article will explore the basics of Microsoft 365 licensing, MSP sourcing methods, and considerations when choosing a provider.

Managed Service Providers are pivotal in assisting businesses with IT needs, including sourcing Microsoft 365 licenses. An MSP’s ability to effectively source licenses through direct channels or distributors impacts the overall client experience and satisfaction. To ensure that you’re obtaining the best value and support for your clients, it’s essential to evaluate your licensing sourcing methods and stay abreast of industry trends and best practices.

As much as MSP sourcing options and client experience are essential, it’s also important to consider the impact of your chosen sourcing method on your clients. Providing timely support, accurate quotes, and a seamless licensing experience adds value to your offerings and strengthens client relationships. In the following sections, we’ll dive deeper into topics like understanding MSP licensing sourcing and the impact of such choices on your clients.

Key Takeaways

  • Understanding Microsoft 365 licensing options is crucial for MSPs.
  • Evaluating MSP sourcing methods is essential for optimal client experience.
  • Your choice of sourcing method can significantly impact client satisfaction.

The Basics of Microsoft 365 Licensing

Microsoft 365, formerly Office 365, offers various subscription plans to cater to the needs of businesses and individuals. As an IT Managed Service Provider (MSP), it’s essential to understand Microsoft 365 licensing to provide the best solutions for your clients.

  • Choose the right plan: Regarding Microsoft 365 licenses, there are three main categories: Business, Enterprise, and Education. Each category has different plans suitable for specific business sizes and requirements. As an MSP, you must evaluate your client’s needs to recommend the appropriate plan that meets their unique requirements.
  • Understand license types: Microsoft provides two types of licenses: per-user and per-device. The per-user license allows a single user to access Microsoft 365 services across multiple devices, while the per-device license is for a specific device used by any number of users. Evaluate the working patterns of your client’s employees to determine the best licensing option.
  • Consider add-ons: Microsoft 365 offers several add-on licenses to enhance the productivity and security features of the standard plans. Examples of these add-ons include Advanced Threat Protection (ATP), Conditional Access, and Power BI Pro. Discuss with your clients the specific add-ons that can be valuable for their businesses to keep their data secure and improve collaboration.

MSPs can source Microsoft 365 licenses directly from Microsoft or an authorized Microsoft Cloud Solution Provider (CSP). Both options have pros and cons, such as pricing, support, and billing flexibility. Explore the available options and consider your clients’ preferences to ensure seamless integration and migration.

In summary, understanding Microsoft 365 licensing is crucial for an MSP to provide tailored solutions and enable their clients to harness the full potential of this robust platform. By choosing the right plan, license type, and any necessary add-ons, you’re positioning your clients for success while expanding your services as an MSP.

Understanding Managed Service Providers (MSP)

As a business owner, you might consider partnering with a managed service provider (MSP) to help manage your Microsoft 365 licensing. To make an informed decision, it is essential to understand what MSPs are and how they can benefit your organization.

MSPs are companies that provide comprehensive IT and cloud management services to businesses. They offer various services such as remote monitoring, maintenance, disaster recovery, and essential IT tasks, ensuring your technology infrastructure runs efficiently. For Microsoft 365 licensing, MSPs act as intermediaries, acquiring licenses from Microsoft and managing them on behalf of your organization.

By outsourcing Microsoft 365 license management to an MSP, you can gain several benefits for your company. First, MSPs have in-depth knowledge of the Microsoft 365 ecosystem, enabling them to recommend the best licensing options tailored to your needs. This expertise can help you avoid overpaying for licenses or purchasing unnecessary features.

Secondly, partnering with an MSP allows for easier license updates and renewals. This ensures your organization complies with Microsoft’s policies and avoids potential fines or penalties for violating license terms. An MSP will keep track of renewal dates and automatically update your licenses when required.

Finally, MSPs can save your organization precious time and resources by handling the entire Microsoft 365 licensing process. Your IT staff can focus on other critical tasks, enhancing overall productivity and operational efficiency.

In conclusion, outsourcing Microsoft 365 license management to an MSP can significantly benefit your organization by reducing costs, improving compliance, and freeing up valuable time for your IT staff. As you evaluate potential MSP partners, compare their experience, service offerings, and pricing models to make the best choice for your business.

MSP Sourcing Methods

Direct Purchases

As an MSP, you can directly purchase Microsoft 365 licenses from Microsoft. This method enables you to manage the entire licensing process, from acquiring the licenses to allocating them to your clients. You gain access to Microsoft’s Partner Center portal when opting for direct purchasing. Here, you can manage and monitor your acquired licenses and distribute them to your clients. This approach may be suitable if you prefer direct control over the licensing process.

Indirect via Distributors

Alternatively, you can choose to source Microsoft 365 licenses through a distributor. In an indirect partnership, the distributor purchases the licenses from Microsoft and sets their pricing and terms. As an MSP, you will resell these licenses to your clients and provide them with additional support, such as deployment and management services. This method lessens your burden in managing the licenses but requires establishing a relationship with a reliable distributor who offers competitive pricing and support.

  • Pros: More convenient, less administrative burden
  • Cons: Less control over pricing, reliance on distributor

Vendor Partnerships

Another sourcing method is partnering with vendors that offer Microsoft 365 licensing as a part of their solutions or services. Vendor partnerships can provide additional benefits beyond Microsoft 365, such as integration with other services, specialized support, or discounts. These partnerships typically involve a revenue-sharing arrangement and require a signed agreement between your MSP and the vendor. Carefully review the partnership terms and evaluate whether the vendor’s offerings align with your MSP’s business strategy and client needs.

Evaluating these MSP sourcing methods is essential and determining which one best fits your business model and strategic goals. By opting for the right method, you can ensure a successful Microsoft 365 licensing process for your MSP and provide value to your clients.

Considerations for Sourcing Microsoft 365 Licenses

When deciding where to source your Microsoft 365 licenses, it’s essential to consider a few crucial factors. These factors can help you select your business’s best MSP (Managed Services Provider).


Price is important to consider, as it directly impacts your organization’s budget. Analyze the pricing options for different MSPs and compare them based on your requirements. Remember that the cheapest option might not always be the best regarding service or deliverables. Look for a balance between service quality and cost-effectiveness.


Support is a key factor in ensuring smooth operations within your organization. Prioritize MSPs that offer reliable technical assistance and expertise. You’ll want to choose a proactive provider who addresses issues and is easily reachable when you need assistance. Take a moment to research their customer reviews and industry reputation to get a sense of their support services.

Updates and Upgrades

Finally, as your business grows and evolves, so will your needs for Microsoft 365 features and licenses. An ideal MSP will stay informed on the latest updates and upgrades to Microsoft 365 and guide you in making beneficial choices for your organization.

To summarize, sourcing Microsoft 365 licenses requires evaluating prospective MSPs on their price, support capabilities, and ability to manage updates and upgrades. By carefully considering these factors, you can make an informed decision and select the right MSP to fit your organization’s needs.

Impact on Clients

As an MSP, sourcing your Microsoft 365 licensing can significantly impact your clients. Understanding the implications of different sourcing strategies to provide the best possible service is crucial.

When you choose a direct relationship with Microsoft, your clients benefit from direct access to support and resources. However, this option may bring drawbacks, such as limited negotiation power and lack of personalized support. It is important to weigh these factors when determining which option best suits your clients’ needs.

Partnering with an indirect provider allows you to offer tailored solutions and comprehensive support. By selecting a solid partnership, you ensure that your clients receive reliable support services, which can result in increased client satisfaction.

Additionally, managing Microsoft 365 licensing using a Cloud Solution Provider (CSP) enables you to bundle and customize products for your clients. This approach provides the flexibility your clients may need, especially if they require unique solutions. Building an adaptable relationship will allow you to address your client’s needs more effectively.

To optimize the value you deliver to clients, consider focusing on:

  • Support: Make sure your chosen approach provides comprehensive support for your clients, including troubleshooting and issue resolution assistance.
  • Pricing: Evaluate the strategy and ensure it aligns with your clients’ budgets and expectations.
  • Expertise: Utilize the expertise and knowledge of your chosen partner to deliver top-tier services.

Remember that your clients’ success directly influences your business’s success.

Case Study – MSP Sourcing Success

As an MSP, selecting a trustworthy Microsoft licensing vendor is critical for your business growth. In this case study, we look at a successful MSP that made the right choice for sourcing their Microsoft 365 licenses. By following their footsteps, you can experience similar success.

Finding the Right Vendor for Microsoft 365 Licensing

The MSP identified key criteria for selecting a vendor: partnership level, support quality, and pricing. They compared various distributors, considering factors like customer reviews, certifications, and industry expertise. Through diligent research and comparison, the MSP found a partner who met their needs and aligned with their business philosophies.

Seamless Integration and Improved Customer Experience

Choosing the right vendor positively impacted the MSP’s client base. They provided seamless integration of Microsoft 365 licenses for their customers. The quality support provided by the vendor proved invaluable, with clients experiencing minimal issues during the transition. Furthermore, the streamlined onboarding process led to increased customer satisfaction and retention.

Maximizing Profit with the Right Pricing Model

Selecting a vendor with competitive pricing models allowed the MSP to maximize its profits. They could choose flexible licensing options tailored to each client’s needs, including monthly or annual subscriptions. This flexibility enabled the MSP to scale effectively, catering to the varying requirements of their expanding client base.

By choosing a trustworthy Microsoft 365 licensing provider, the MSP in this case study experienced growth and maintained excellent customer relationships.


To make informed decisions about your Microsoft 365 licensing, it is essential to understand where your MSP sources the licenses. This knowledge allows you to gauge the reliability, cost-effectiveness, and overall value of the services provided by your MSP.

A strong partnership with a Microsoft-authorized channel can help you access the licenses directly and ensure you are receiving the most genuine products. Additionally, working with a reputable MSP guarantees timely updates and support.

Remember to evaluate the licensing models available and how they align with your organization’s needs. This will ensure that you maximize the value of your investment and optimize your IT infrastructure.

Finally, be prepared to reassess your MSP’s performance and Microsoft 365 licensing practices periodically. This will help you maintain a high-functioning, cost-effective IT environment while staying ahead of technological advancements.