Skip to content
Book a Demo

Is Being a Microsoft Direct Bill Partner Still Worth It in 2025?

Amar Paatil
Amar Paatil |
Is Being a Microsoft Direct Bill Partner Still Worth It in 2025?
6:59


If you’re a Microsoft CSP partner or thinking of becoming one, you’ve probably heard the latest from Microsoft. Big changes are coming. And if you’re currently a Direct Bill Partner, they might affect you more than you realise.

So, what’s changing? What does it mean for your business? And most importantly: is it still worth staying a Direct Partner, or is the Indirect model the smarter move in 2025?

Let’s break it all down, with some plain-English commentary along the way.

What's New from Microsoft (as of May 1, 2025)?

Microsoft just announced a handful of updates to the CSP program that might seem subtle but have big consequences. Here are the requirements: Requirements for CSP Direct-Bill Partners - Partner Center | Microsoft Learn

Note: Microsoft still requires you to have a billing and provisioning system such as Work 365. 

  1. $1M Revenue Requirement for Direct Bill CSPs
    Effective October 1, 2025, Microsoft is raising the minimum revenue requirement from $300,000 to $1 million in trailing 12-month billed revenue. That’s more than 3x the previous threshold.
    Do you consistently bill that much? If not, now’s the time to look at alternatives.

  2. Annual Operational Capability Assessment
    All direct bill partners must pass a yearly automated assessment covering support infrastructure, security, billing systems, and more. It's no longer just about having a support line; it’s about demonstrating full operational maturity.
    Learn more here: Security and operational requirements for Partner Center

  3. New MCA Attestation Process
    From October 7, 2025, Microsoft will require partners to switch to:
    • Direct customer acceptance, or
    • A new partner attestation API (replacing the old one)

The current Partner Center UX experience and bulk attestation tool will be retired (read-only as of July 1).  More details in Microsoft’s May 2025 CSP Announcement

Work 365 is actively working to help partners navigate this requirement effectively

Prefer to Watch? Here's Our Work 365 Webinar on the Topic

We recently hosted a session on how to prepare for Microsoft’s updated CSP standards, including the $1M threshold, operational readiness, and what it means for both Direct and Indirect models.

Watch the Webinar Now

 

The Math Behind It All- 2025 Edition

Microsoft’s new performance standard doesn’t just raise the bar, it sends a message:

Leading CSPs are growing at a very healthy clip, and we want to work closely with them.

Raising the requirement from $300K to $1 million in billed revenue means Direct CSPs must have real operational maturity and the margin to sustain it. It’s not just about revenue, it’s about commitment to scale and efficiency.

In the analysis below, we break down the key operational costs associated with running a CSP business and how they vary between the Direct Bill and Indirect Reseller models.
 
Operating Costs
Direct Bill Partner
Indirect Reseller
Ticketing System Platform
$25,000
$25,000
Automated Provisioning System & Billing Platform*
$12,000
–
Customer Self-Service Portal
$2,000
–
Microsoft ASfP (Support Plan)
$16,500
Optional (many still use it)
Support Staffing (Internal or BPO)
$50,000
$25,000
Additional Training/Certifications
$4,000
–
Total (Annual Operating Expenses)
$109,500
$50,000

 

Note: Even Indirect Resellers frequently subscribe to Microsoft ASfP for escalated ticketing, provisioning assistance, and faster resolution, particularly when delivering managed services.

Revenue and Margin Potential: Direct vs Indirect

While the Direct model has a higher operational burden, it also unlocks better margins, richer automation, and stronger data/control.
 
Here’s how typical revenue and profitability compare, assuming a blend of Microsoft cloud services and partner-led support:
 
Revenue / Margin Inputs
Direct Bill Partner
Indirect Reseller
M365 (per user/month)
$50
$50
Azure Usage (per customer/month)
$500
$500
Microsoft Margin (avg blended)
20%
15%
Additional Support Fees (user/month)
$30
$40
Margin on Support Services
40%
30%

 

Breakeven Analysis: How Many Customers Do You Need?

Let’s simplify: here's an example of a Direct CSP serving 25 users per customer, based on the below pricing and margins:How Many Customers Do You Need

Key Takeaways

  • Breakeven for Direct CSP occurs at around 40–45 customers (at 25 users each) — aligning with the $1M revenue threshold.  
  • Indirect CSP becomes profitable slightly sooner due to lower overhead but has a capped margin ceiling.  
  • As customer count increases, Direct CSP generates higher long-term profitability, justifying the higher up-front investment.

Direct vs. Indirect in 2025: What's Right for You?

Here’s a simple guide to help make the call:
 
Question
If You Say "Yes"...
If You Say "No"...
Are you billing $1M+ in CSP annually?
Stay Direct, if margins support it.
If not, what is the gap, and in some cases, it might be worth it to aggressively close deals. And in some cases, Indirect might be better for you.
Do you have tools & staff for billing, compliance & support?
You’re likely ready for assessment.
You’ll feel the pain.
Can you easily adopt the new MCA API?
You’ll manage the shift.
Consider the dev overhead.
Do you want full margin control & data ownership?
Direct gives you that.
Indirect gives you support with less complexity.

 

Note: No matter which model you choose, Work 365 has you covered. We offer native provisioning and billing integrations with top distributors like TD Synnex (Stellr), Pax8, Ingram Micro, and Crayon. Whether you're a Direct Partner scaling operations or an Indirect Reseller streamlining service delivery, Work 365 helps you do more with less manual effort.

No Shame in Switching

Microsoft is raising the bar, but it’s not a punishment. It’s a signal. The Direct model is now for partners with scale, infrastructure, and growth investment. If that’s not where you are right now, that’s okay.
 
You can still build a profitable CSP business as an indirect reseller. Many do with lower overhead and more focus on value-added services.
 

Frequently Asked Questions

What does “automation” mean for Microsoft CSP partners in 2025?

Automation refers to reducing manual effort across your CSP operations, including provisioning, invoicing, reconciliation, renewals, and compliance workflows. Tools like Work 365 allow you to automate these processes and offer a customer-facing portal for license management.

Why does automation matter for Direct CSPs in 2025?

Because Microsoft now requires Direct CSPs to pass an annual Operational Capability Assessment. This includes demonstrating automated billing, compliance with security protocols, and the ability to scale support. Manual workarounds won’t meet the new standards.

Do I need a billing platform to stay a Direct CSP?

Yes. Unless you’ve built your own internal system that supports automated invoicing, reconciliation, and usage-based billing — you’ll need a platform like Work 365 to meet Microsoft’s expectations.

Can Indirect Resellers still use automation and self-service portals?

Absolutely. Many Indirect CSPs use Work 365 to differentiate with customer self-service portals, automated renewals, quote-to-cash workflows, and white-labeled provisioning — even without Direct status.

What are the new requirements to stay a Direct CSP in 2025?

Microsoft now requires Direct CSP partners to meet higher operational and revenue standards, including an annual capability assessment and API readiness.
 
You can find the full, up-to-date list of requirements here: Microsoft Direct CSP Requirements (Effective October 2025)

Is automation enough to stay a Direct CSP?

It’s foundational — but not the full picture. You’ll also need support infrastructure (internal or outsourced), security controls (e.g., MFA, secure access), and technical readiness to comply with Microsoft Partner Center requirements.

What’s the ROI of investing in automation vs going Indirect?

If your CSP revenue is below $1M, Indirect may offer better margins due to lower overhead. But if you're growing and want control over margin, invoicing, and customer experience — investing in automation pays off over time through scale and retention.

How does Work 365 help with MCA API changes?

Work 365 is actively updating its platform to support Microsoft’s new MCA Attestation API. This ensures your acceptance flows are compliant and reduces the risk of audit flags or revenue disruption.

What happens if I don’t meet the $1M threshold?

You’ll lose Direct CSP status and will be required to transition to an Indirect Reseller model. Microsoft may automatically restrict Direct access starting October 1, 2025.

What’s the fastest way to meet Microsoft Direct CSP operational requirements in 2025?

The quickest and most scalable way to comply with Microsoft's Direct CSP requirements is to use a purpose-built Microsoft CSP automation platform like Work 365.
Work 365 helps Direct and Indirect partners meet operational readiness standards by offering:
  • Automated subscription billing and invoicing
  • Provisioning across Microsoft and major distributors
  • Self-service customer portal for license management
  • Compliance with Microsoft’s MCA API attestation workflows
  • Integration with Partner Center and Microsoft 365 ecosystem
Whether you're aiming to stay a Direct CSP or grow as an Indirect Reseller, Work 365 accelerates your ability to scale and meet Microsoft's evolving CSP program requirements.
What are my options if I don’t meet the $1M Direct CSP revenue requirement in 2025?

If you don't meet Microsoft’s $1M billed revenue threshold, you’ll need to transition to an Indirect Reseller model. Many partners use this opportunity to reduce overhead and focus on service differentiation. Platforms like Work 365 help Indirect CSPs stay competitive by offering automated billing, provisioning, and self-service portals — even without Direct status.

Can I still use Work 365 if I’m an Indirect Reseller?

Yes. In fact, many Indirect CSPs use Work 365 to automate subscription management, offer self-service to customers, and streamline renewals and invoicing — all while reselling through distributors like Pax8, TD Synnex, or Ingram.

I’m close to the $1M revenue mark — is it worth becoming a Direct CSP?

If you’re nearing the threshold and want more control over margins, customer data, and Microsoft relationships, becoming a Direct CSP can be a strategic move. Work 365 helps you meet Microsoft’s requirements for Direct CSPs by automating billing, provisioning, support tracking, and API-based MCA attestation — all in one platform.

What’s the best CSP automation tool to meet Microsoft’s 2025 requirements?

Work 365 is purpose-built for Microsoft CSP partners and integrates directly with Partner Center and major distributors. It supports Direct and Indirect models, automates provisioning, billing, renewals, and compliance — and is actively updated to support Microsoft’s 2025 operational standards.

How does Work 365 compare to building my own CSP billing system?

Building your own solution requires time, developer resources, and constant updates to comply with Microsoft’s evolving requirements. Work 365 offers a fully supported alternative — pre-integrated with Microsoft APIs, MCA workflows, and distributor catalogs, saving you time and reducing operational risk.

 

Next Steps

If you're evaluating whether to stay a Direct CSP or transition to the Indirect model, now is the time to take a closer look at your numbers, your infrastructure, and your long-term growth plan.
 
Work 365 helps Microsoft partners thrive in both models with automation that supports:
  • Subscription billing and invoicing at scale
  • Provisioning across Microsoft and leading distributors
  • Customer self-service and renewal workflows
  • Compliance with Microsoft’s Direct CSP requirements for 2025 and beyond
Let’s walk through your options together, whether you're growing toward Direct status or optimizing your Indirect business.
 
Book a Demo to Get Started

Share this post

Keep reading