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

Written by Amar Paatil | Jul 2, 2025 1:18:31 PM

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.

$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.
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
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.

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.

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%

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

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.

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.

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.

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