Microsoft Enterprise LSP Incentives Could Decrease to Under $8K by 2025

Microsoft is making some big changes that could impact the incentives for its enterprise Licensing Solution Partners (LSPs) starting in 2025. According to Gartner, these changes are part of Microsoft’s shift towards newer licensing models like the Microsoft Customer Agreement (MCA) and Cloud Solution Provider (CSP) programs.

Currently, top-tier organizations buy Microsoft enterprise products through LSPs like Data#3, Datacom, and Insight. These LSPs handle a variety of products, from workplace solutions to Azure and Dynamics. But with Microsoft focusing more on artificial intelligence and cloud services, the incentives for these service providers are set to decrease significantly over the next few years.

Gartner analyst Domenico Scriva explained that the annual incentives for LSPs will see a drastic drop from $148,000 to $7,600 for certain products starting in January 2025. This change could have a big impact on partners who rely on these incentives to cover expenses and fund programs for non-profits and educational organizations. Scriva also noted that Microsoft is redirecting investments and incentives towards emerging technologies like AI migration and Microsoft 365.

Microsoft’s evolving licensing strategy aligns with its goal of driving long-term skill development in the industry. By incentivizing certain technologies, Microsoft is not just promoting product adoption but also shaping the market’s expertise in cloud and AI technologies for the future.

For partners working with Microsoft, these changes mean they will need to adapt their business strategies to continue thriving in the evolving ecosystem. With Microsoft focusing more on AI and cloud services, partners will need to find new ways to navigate the shifting landscape of incentives and investments in order to stay competitive.