This page was created as supporting material to help customers understand changes surrounding the acceptance of the Microsoft Cloud Agreement and refreshed documentation we are requesting in support of that goal.
Q: What's the Microsoft Cloud Agreement?
A: Starting November 7, 2018, all customers of Microsoft cloud services such as Office 365 and Azure are required to certify their consent to the "Microsoft Cloud Agreement", which establishes terms for accessing and using Microsoft 365 and other cloud offerings. We're required to obtain your acceptance as part of Liquid Mercury Solution's partnership with Microsoft, the MCRA (Microsoft Cloud Reseller Agreement).
On March 22, 2019, Microsoft will be locking plan changes until we have the customer's MCA acceptance on record. This requirement exists globally for all Microsoft partners and all customers - whether direct, indirect resellers, and CSPs. Unfortunately there's no mechanism in place to extend this deadline. So, it is very important that we update the records now.
Q: I am a new customer in 2019; do I need to agree to the MCA?
A: Yes, as if the beginning of December 2018, all our paperwork and documentation includes acceptance of the MCA as part of our Client Services Agreement which spells out the terms of doing business. Only customers who came onboard prior to this need to be concerned about re-authorization described in this FAQ.
Q: Why is Microsoft pushing the MCA?
A: It's impossible to know all the reasons, but we suspect there are three issues at play. #1 is the GDPR, which gives expensive privacy rights to end users and may become the law-of-the-land in some parts of the US soon. #2 is the Cloud Act, which became law recently and governs how your data can be shared with global law enforcement agencies. And #3 is concern over how Microsoft partners interact with customers; a "customer bill of rights" is a big part of the MCA.
Specifically, Microsoft says:
"Proper execution of the MCA protects Microsoft, its partners and customers by ensuring mutual alignment on many important topics including but not limited to security, privacy and data protection. The confirmation process ensures transparency and alignment and allows Microsoft to better assist customers who need to promptly respond to regulatory inquiries."
We interpret this to mean that when they say "security, privacy and data protection" Microsoft is primarily concerned about complying with Cloud Act, GDPR, and other similar regulations that may arise. When they say "transparency and alignment" they mean that they do not want Microsoft CSP providers to each be doing something completely different and that they do not want them to obfuscate the customer's rights and abilities - such as owing their own data, getting global admin rights to their own tenant, or switching to a different Microsoft partner.
Q: Didn't we already agree to Microsoft's terms when we signed up with Office 365?
A: Yes, but someone in legal decided that recent changes needed to be more explicit that regular cloud click-wrap agreements. In recent months, you may have already clicked something on the Microsoft site acknowledging the MCA, but we don't have access to this information and we're required to verify and acknowledge your acceptance independently.
Q: We buy services from Liquid Mercury Solutions, but we buy licenses elsewhere; do we still need to do this?
A: Unfortunately, yes. Getting acceptance to the MCA is a requirement and it takes a lot of manual effort on our part, which is passed down to us from Microsoft and our distributor partners. It would be onerous to adjust the process for those who buy licenses through different vendors (e.g. Microsoft, other CSP, TechSoup, LARs, etc.) and we can't easily account for existing customers who may be buying Service Plans but not licenses now - but who may change their license provider later. So, we uniformly require all clients to accept the MCA regardless of whether you have done do with another provider.
Q: We don't buy Office 365 or other Microsoft cloud services at all; do we need to accept the MCA?
A: If you have purely on-premises software and engage with us to receive support for SharePoint or other products, you may be exempt from this requirement to accept the MCA. These cases are very rare and we do not pursue re-authorization in such cases. However, since the MCA is now woven through our business process, accepting it may be part of any boiler-plate Agreement provided to you. It is our opinion that MCA does not apply to you if you are not buying any products hosted in the Microsoft Cloud, and these provisions would be rendered moot. If you have any serious objections to this, you should raise this concern during contract review and negotiation.
Q: What's the easiest way to accept the MCA?
A: Re-authorization of your credit card auto-pay is the easiest way by far to accept the terms of the MCA, because this also gives us a change to ensure that other updates needed to satisfy our credit card processors are also accepted at the same time.
Q: What exactly does the MCA have to do with my credit card?
A: Nothing at all. However, by pure coincidence, Microsoft is not the only entity updating their contract requirements in response to recent changes in the law. Aas a result, we also need to update the terms and conditions for credit card processing. The result of these two things coming together at the same time is that the easier path, by far, is to kill two birds with one stone by updating the CC authorization and getting MCA acceptance at the same time?
Q: If I re-authorize my credit card billing, will my monthly / yearly cost change in any way?
A: No. Your charges will remain the same as they were prior to re-authorization.
You may use this as an opportunity to update your card on file, request plan changes, or adjust your billing cycle in others ways (such as switching to/from yearly/quarterly/monthly). If you make changes, your costs will likely change as a result.
Q: Why is Microsoft requiring the partner to confirm customer consent to the MCA instead of obtaining it directly from the customer?
A: The customer is buying from the CSP partner, not directly from Microsoft. For using the services that Microsoft provides, Microsoft provides terms that are documented in the MCA. The MCRA (MS Cloud Reseller Agreement) requires CSP partners to have customers review and accept the MCA prior to placing an order.
Q: Why am I now required to sign a form acknowledging my responsibilities as a Global Administrator?
A: Prior to November 2018, Liquid Mercury Solutions did not have a process in place to deal with the need to grant special permissions (e.g. Global Administrator) to our Client's users. Our policy was to uniformly grant this when requested.
The terms of the MCA and updated MCRA make it apparent that privileged users are in a unique position which can make it challenging for us to fulfill our obligations to Microsoft within the CSP program unless we are able to verify that all Global Administrators understand and accept these terms as well. Thus, we established a process for privileged users to follow in order to be granted such access. Thus we made signing the acknowledgement for privileged users, which includes an acknowledgement of the MCA, a part of this process and a requirement for being granted access.
Our Acknowledgement of Administrative Privileges and Responsibilities is a non-binding memorandum of understanding. It's provisions are common sense and non-controversial, and it helps to educate administrators about how the MCA affects them and how they have an impact on the relationship between Microsoft, partners like us, and you the customer. Nevertheless, it is now a requirement for all privileged users of customers under our Client Services Agreement. If you have legitimate objections to signing this document, please bring these to our attention so we can come to a mutually acceptable alternative.
Q: What am I giving up by agreement to the MCA?
A: Nothing much, really. In fact, we hate to say it, you're giving up the right to let Microsoft kick you off their servers for not accepting it. In fact, Microsoft says "For any reason, if the customer no longer agrees with the MCA, then the partner must cancel the subscriptions associated with this customer."
We've reviewed the MCA, and we found it to be uniformly positive for customers, and generally even handed with respect to partners. It's not rocket science, folks, so please don't make a big fuss over it.
Q: Where can I learn more about the MCA?
A: Microsoft has their own FAQ, which we have drawn from to provide some of this information:
Q: Can't you guys just do this for me?
A: No. Microsoft is very clear that we do not have the right to accept the MCA on your behalf, so even if you tell us it's OK in e-mail or over the phone, we're still going to collect a signature from you.
Q: How often will we have to do this?
A: Microsoft seems to think you'd be crazy not to accept the MCA, no matter how it may change. Since there is really no choice about accepting it if you want to use the Microsoft cloud, we're adjusting our agreements to allow you to accept the MCA as it changes with each month that you continue to receive subscriptions. Technically speaking, we're supposed to obtain acceptance of the MCA on annual renewal or any time a plan change is made. So, you can safely assume we will incorporate this language into our Client Services Agreement and SLA going forward.
Q: Which version of the MCA applies to me/my company?
A: Assuming that you're a Liquid Mercury Solutions' client, most likely you are under the North American commercial cloud version of the MCA. If you have employees or users outside the United States (especially Germany, the EU, or China) you'll need to sign additional paperwork for those regions, agreeing to terms beyond those in the agreement(s) below.
Common versions of the MCA are listed here for your convenience:
US / North American Commercial
Microsoft Cloud Agreement for North America Commercial Customers
US Govt. Customers (in GCC)
Microsoft Cloud Agreement for US Government
Microsoft Cloud Agreements by region and language
Q: How do the entities referred to in the MCA map to entities referred to in Agreements and contract language provided by and specific to Liquid Mercury Solutions?
A: For purposes of the MCA, the term "Customer" in MCA refers to your organization, which is "Client" in our Agreement(s). The terms "Customer Reseller" and/or "Reseller" in MCA refers to Liquid Mercury Solutions, which is ("Company") in our Agreement(s).
Q: Who in my organization should authorize the MCA and/or payment re-authorization?
A: Microsoft says it's up to the customer to determine who this should be. We tend to believe that it should be someone in your organization who has the authority to enter the organization into binding agreements.
Some companies are structured in a way to allow delegation of responsibilities such as accepting software agreements or delegating credit card purchases - but verifying that a person has such privileges is problematic. Added to this is the fact that MCA is fairly new and that many aspects of its enforcement are a work in progress.
So, our official policy is that the MCA authorization needs to be made by the credit card holder whose name is on the card. In the highly unlikely case that Microsoft comes knocking on our door to get an MCA out of someone else, we'll just have to burn cross that bridge when we get there.
Q: On a side tangent, what's all this noise about interstate sales tax?
A: As re-authorization affects billing processes, we do want take this opportunity to advise customers that due to SCOTUS decisions in 2018, how interstate sales tax is handled is changing in many states. If you're based in AZ, CA, CT, DC, or NY this affects you. We're aware of this and have already implemented solutions to handle state taxes with respect to Office 365 and professional services. Please ask us if you have questions about applicable taxes in your area.
Up until recently, Microsoft's position regarding Office 365 and Azure was that these are services - not products. Services are not taxed in many states (CT and DC are exceptions), and interstate sales were not subject to tax. A case brought before the Supreme Court last year changes this. We are now directed to accept a states' interpretation of what is taxable, what is a product or service, and pay the tax accordingly. Some states have legislation in place that defines software-as-a-service as a taxable product.
This patchwork of rules creates some logistic issues for us selling Office 365. For example, some states tax SaaS, hardware, and professional services at different rates. Some states charge a different rate depending on your county. And most states do not make it clear exactly how they expect foreign corporations to remit the tax, because they never expected this in the past. In short, the current situation is somewhat of a mess.
However, until such time as congress chooses to draft new legislation addressing these problems, we must do our best to comply.