Microsoft’s New Azure: the Consequences for New Azure Billing
In September 2019, Microsoft released additional information about the introduction of New Azure. This will be available in the Microsoft Partner Center from 1 November, 2019. This has a number of important implications for New Azure billing.
Consequences of New Azure on Billing for Microsoft Partners
- For New Azure, Microsoft only uses a price list in US Dollars.
- Microsoft invoices partners in the currency of the country of their end customer, based on exchange rates that are published each month in advance by Microsoft.
What Consequences does the New Azure have on Billing for Microsoft Partners?
If you have customers in different countries with different currencies you will receive multiple New Azure invoices. You will receive a separate invoice for each currency from Microsoft for New Azure, with each invoice representing the local currency of your customer. Microsoft bases the currency per customer based on the geographical location of your customers.
You have 4 customers in different countries:
- Client A (United Kingdom)
- Client B (The Netherlands)
- Client C (Belgium)
- Client D (Switzerland)
When these 4 customers all use New Azure you will receive 3 invoices from Microsoft:
- Invoice X, this contains the Azure expenses for customer A, the invoice is in GBP
- Invoice Y, this contains the Azure expenses for customer B & C, the invoice is in EUR
- Invoice Z, this contains the Azure expenses for customer D, the invoice is in CHF
Each invoice amount is based on the Azure price list in US dollars, each with its own pre-published exchange rate. This rate is published one month in advance by Microsoft.
New Azure will not immediately replace the existing Azure offering. This will remain available for a year after the introduction of New Azure. However, Microsoft has also announced that the incentives that apply to existing Azure transactions will decrease over time, while higher incentives will apply to New Azure.
Status 2 October
Microsoft has not yet published any information about how they publish relevant information that is required for billing. This includes a price API and the publication of the applicable exchange rates. There is also much uncertainty about the use of New Azure versus the existing Azure and its impact on invoicing during the transition period.
Microsoft has already announced that they will offer tools that will streamline the transition from current Azure users to New Azure. According to Microsoft, these tools and options will be available in the second quarter of their fiscal year 2020.
As a Microsoft Partner, what do you have to take into account yourself
- Check if you have internationally established customers with a different currency. The customer’s currency is based by Microsoft on the address configured in the tenants / customer Partner Center.
- Please note that for new tenants it may only be possible to start New Azure subscriptions, which are calculated in US Dollars.
- Assess the agreements with your customers and determine the impact of possible currency changes.
- Assess the incentives that apply to your existing Azure purchase and how they will change over time.