CSP Hoster program explained
CSP Hoster is a recently announced upcoming program for Microsoft partners, allowing them to pre-build SaaS applications and hosted desktop solutions using their own keys and media.
Warning: information in this article is preliminary and subject to an official announcement expected on October 01, 2022. This article will be updated once official guidance or new non-confidential information is available.
What is a CSP Hoster?
CSP Hoster is an enrolled member of the Microsoft CSP Hoster program.
That's all we know for sure for now. We expect the upcoming official announcement to clarify what Microsoft partners qualify for CSP hosting. Currently, the expectation is that it may be limited to either existing QMTH providers or SPLA providers with License Mobility. The former is more likely.
What is the CSP Hoster program?
The (not yet rolled out) CSP Hoster program will allow participating Microsoft partners to pre-build hosted solutions for their end customers using their own CSP activation keys and installation media.
Today, only the elite club of QMTH-authorized SPLA providers is permitted to host a limited subset of CSP licenses: Windows 11 and Office 365 Apps. End clients may bring no other CSP licenses to a services provider. Server subscriptions via CSP are only permitted in Azure.
In addition to the above limitations, QMTH hosting providers may not pre-build virtual machines without access to the end customer's media and activation keys.
Microsoft wants to expand the use of CSP licenses in hosting, which is understandable. So CSP Hosters will be given their own library of installation media and activation keys.
Is the CSP Hoster program replacing QMTH?
Yes and no. According to the preliminary public announcements, QMTH will no longer be a requirement to host Windows 11 and Office 365 Apps.
However, as an unconfirmed rumour, CSP hosters may first be limited to the existing QMTH-authorized providers.
We have also heard that QMTH will remain for the time being, so if you want to continue QMTH participation, there's no rush to terminate it. The question, though, is, why would you need it if hosting Office 365 Apps and Windows 11 won't require QMTH anymore?
Is the CSP Hoster program replacing SPLA?
Although it is subject to an official confirmation from Microsoft, we are confident that Microsoft won't terminate the SPLA program, and existing SPLA providers may continue business as usual.
Licensing CSP Hoster solutions
Providers must first sell the required CSP licenses to the end clients. As an alternative, clients will be permitted to bring their own CSP licenses.
In either case, licensing CSP Hosters is different to SPLA. In SPLA, the provider is licensed to pre-build and host solutions using the provider's SPLA licenses. In CSP, however, the provider must first sell all licenses to the end clients. Access to media and activation keys does not mean the provider may use its own CSP licenses for hosting.
The above also means that providers will offer most hosted CSP solutions on 1-year or 3-year subscriptions.
Will CSP Hosters require Windows Server CALs?
We have heard unconfirmed rumours that, unlike in SPLA, Windows Server licensing for CSP Hosting will require Windows Server CALs.
If that's correct, that will be very frustrating. Microsoft pitched the update as levelling the playing field between Microsoft's own Cloud – Azure – and hosting providers. But Azure does not require Windows Server CALs even when end clients bring their own Windows Server subscriptions via Azure Hybrid Benefit. Where's the levelled playing field?
How much will CSP hosting cost compared to SPLA
Warning: it is a pure "educated speculation" at this time.
With some reasonable doubt and healthy scepticism, we believe that Microsoft is trying to make CSP their flagship, if not the only, licensing program. That means that there must be cost leverage. Here's what we predict:
Regular CSP monthly subscriptions aren't available for server licenses and are 20% more expensive for M365 plans and components.
There is no confirmation whether they will be available via the CSP Hoster program.
1-year subscriptions will include a monthly billing option.
We expect them to be somewhat on par with SPLA costs.
We expect Microsoft to incentivise long-term commitments.
It means we expect this option to be cheaper compared to SPLA.
CSP Hoster reporting
QMTH reporting is not officially stipulated, and we are yet to see it truly "working".
CSP Hoster program will most likely include reporting requirements. We are confident it will be different to SPLA reporting. It will have somehow to incorporate:
Usage of licenses providers activated with their keys,
Sales of the above licenses to end-users. CSP licenses will have to be sold to end clients. It's not as in SPLA, where the provider is the licensee.
Beware potential audits
No matter how softly pitched, this announcement hints at a potential tectonic shift in the service provider landscape. We are expecting more SPLA audits by Microsoft.
We'll be watching this space closely. Please also revisit this article after October 01. 2022, when Microsoft is expected to provide clarity around all the upcoming Microsoft Licensing Changes and CSP Hoster program.