MSPs are facing a potential $25bn Microsoft licensing bonanza over the next three years as the software giant moves more deals from an Enterprise Agreement (EA) to a Cloud Solution Provider (CSP) model.
That’s the message of Onyx, an AI-powered software licensing start-up run by a team of ex SoftwareOne, Bytes and Softcat veterans.
Having aggressively cut EA fees on 1 January, Microsoft in May announced it is moving incentives towards its CSP model, which it sees as the “hero motion” for accelerating in the SME space.
These CSP changes kicked in this month.
“Huge landgrab for MSPs”
Founded last summer by Neil Lomax, Chris Brown and Stewart McLean, Onyx initially focused on giving Microsoft licensing advice to Fortune 2000 companies.
Onyx’s platform combines AI with human-in-the-loop processes, with expert-curated knowledge and quality assurance.
Now, the start-up has re-solutionised its platform specifically for CSPs under the ‘Onyx CSP Growth Engine’ banner.
CSP Growth Engine is designed to help MSPs modernise their licensing helpdesks, tap into the EA-to-CSP shift and unlock new Microsoft leads.
“We sized it up and about $25bn minimum is going to go to CSP over the next three years,” Lomax told IT Channel Oxygen.
“With this shift that’s coming – particularly in light of the pricing harmonisation that kicks in at the end of this month – there’s going to be a huge land grab opportunity for these MSPs, and they stand to be the biggest winners in the new Microsoft landscape shift,” McLean added.
“But those who actively modernise their CSP proposition to drive efficiency and maximise customer value will have the most success. CSP Growth Engine helps them do that.”
“Accidental licensing partners”
While Microsoft itself wants more smaller MSPs to begin transacting licenses via CSP, most are “accidental licensing partners”, McLean said.
Microsoft is now recognising how valuable the solution can be to support CSP partners to accelerate growth, he claimed.
“Customers expect their CSP provider to provide licensing expertise, but many partners lack the experience or resource to provide this at scale.” McLean said.
“We give their CSP customers direct access to the platform, so when they have licensing questions – no matter how simple or complicated – they can run these through the platform.
“It looks like a chatbot but is powered by human expertise behind it.
“Customers don’t have to wait two days to get a caveated answer from their partner, who in those two days is more often than not scrambling around under sofa cushions trying to find the right answer.”
The solution launched earlier this year in the US and the team are now actively recruiting partners in the UK and EMEA who are receiving the value equally well, Lomax said.
CSP Growth Engine is available to MSPs on a per-customer, per-month basis. A ‘light’ version enables smaller MSPs to acquire platform access for their internal users for around $1,000 a month.
“If you’re a smaller partner struggling with licensing questions, you can have the platform at minimal cost and just get it off your plate,” Lomax said of the second option.
“If you’re a bigger partner or you’re trying to acquire CSP customers, you can leverage the fully-featured version of the platform to provide to customers directly, and they’ll have an amazing experience. Then all that traffic the customer generates goes is fed into our opportunity generation platform to help generate more leads, incentives and workshops – all the things Microsoft wants you to do as a partner.”
Onyx’s partner solution helps manage and drive revenue, therefore it’s eligible for Microsoft co-op funding, meaning MSPs can potentially deliver it to their customers at “net zero cost”, McLean added.
“The idea is that partners absorb the price we charge and deliver it to their customers as value add,” he explained.
“We have a lot of insight”
Lomax, McLean and Brown were among the co-founders of the UK arm of SoftwareOne UK, whose Microsoft revenues top $25bn. Before that, they all also worked for Bytes, with Lomax having previously served a four-year stint at Softcat.
Having helped expand SoftwareOne’s international footprint from seven to over 80 countries and then grown its US business, Lomax opted to leave the Switzerland-based giant last June.
Onyx was born later in the summer after Brown visited him on holiday, having also exited SoftwareOne in early 2024.
“I’d retired from the industry and was in Spain for the summer,” Lomax recalled.
“Chris came to visit me and said, ‘let’s build something together”.
“My dream was to change the fact that it’s always the companies with the deepest pockets who get the best Microsoft advice.”
At SoftwareOne, the trio helped to build “the largest global tier-one CSP provider”.
“We have a lot of insight around how to build a successful CSP practice,” Lomax concluded.
“We know the challenges partners face when scaling, so we built CSP Growth Engine to solve many of these problems.”
This article was produced in association with Onyx and is classified as Partner Content. What is Partner Content? See more here.
