The Microsoft Customer Agreement is the new Agreement between customers and Microsoft with terms of use on cloud subscriptions and software licenses. The Microsoft Customer Agreement replaces the Microsoft Cloud Agreement, which will be retired within the Cloud Solution Provider (CSP) on January 31st 2020. There is a deadline and here are the most important subjects you need to know.
Read time: 10 minutes
Sense of urgency
There has been a lot of communications around the Microsoft Customer Agreement (MCA, available October 1, 2019) but we have heard that some Microsoft Cloud Partners didn’t inform their customers until recent days. We received numerous questions about time pressure. We cannot foresee how (some) Microsoft partners communicate to their customers and in what timeframe, but we do know that January 31st 2020 is the hard deadline. Any customer which doesn’t accept the MCA on or before January 31st 2020 may not be supplied with cloud subscriptions after that data.
Signing
You cannot accept the Microsoft Customer Agreement online. As a cloud consumer you must agree to the terms through your Microsoft partner (Need help or advise? Please contact us). The Microsoft Partner is responsible for collecting the signatures. Important to know is that an authorized person of your organization has to agree and sign, it is an official legal document. Please make sure the right person signs the Agreement.
Good to know
There isn’t much difference between the Microsoft Cloud Agreement and the ‘new’ Microsoft Customer Agreement. Having written this, there are some important subjects to be aware of. We present you the most important subjects below.
Affiliates
As a customer you are allowed to sign the Microsoft Customer Agreement for your organization and any affiliates. An affiliate is an organization affiliated to your organization, mostly a subsidiary, localized office or sister-company of which your organization holds at least 50.1% shares. Though you may accept on behalf of your affiliates, the singing organization is responsible an liable for the affiliate(s).
Verifying compliance
The Agreement holds a chapter on verifying compliance where you can read that you are obliged to cooperate with a verification and consequences when you are proven to be incompliant. In the case you are unlicensed use is over 5% of the total use, you as a customer must pay the verification / audit and must acquire sufficient licenses to cover the shortfall at 125% of the than current list price (so no discounts). Furthermore – and this is important to have compliance verified – you as a customer must keep record of licenses, subscriptions and assignment of those licenses and subscriptions.
Privacy
Because the Agreement covers Microsoft cloud subscriptions, there is a technical need to record and process personal data (think about an users name/account to which an Office 365 subscription is assigned). The Agreement states that personal data ‘may’ be transferred and processed in the United States of America (for EU countries, personal data is primarily processed within the EU). It also states that Microsoft complies with the EU General Data Processing Regulation.
Warranty
Warranty on cloud services are according to the respective Service Level Agreements (SLA). For all other products the warranty is limited to one year (12 months) after the customer has bought the license and only for ‘current at the time’ products (so no older versions).
Liability
Liability – back and forth – is limited to the purchasing price of the product. For online services this is 12 times the monthly price and for other products the licensing price. This limited liability is not applicable when the non-disclosure or intellectual property rights are violated.
Partner
Customer is free to choose an authorized Microsoft Cloud Solutions Provider to help them and place orders on customer’s behalf. When a partner is selected, customer may give partner administrative rights to their (cloud) environment and the partner is responsible for support. So it is important to choose your partner (supplier) carefully!
Payment
When you have selected a partner, payment has to be made to the partner. Are you buying at Microsoft directly, it is good to know that you have to pay within 30 days after the date of invoice. Are you late by 15 days, Microsoft has the right to add a 2% of the outstanding payments, each month.
Duration
The Microsoft Cloud Agreement is an evergreen Agreement with no end date. However, both parties have the right to terminate the Agreement without any reason with a 60 day notice. At the same time, Microsoft is allowed to make adjustments to the MCA and require you to agree to the new agreement before any new order may be processed.
Order of precedence
The Microsoft Customer Agreement has precedence over any conflicting terms in other agreements, except for the use rights for applicable products (read: Product Terms and Online Services Terms). More specific is written that the Online Services terms prevail over the Product Terms.
Read carefully
We presented only the highlights in – more or less – understandable language. We strongly advise that you read the Microsoft Customer Agreement carefully before agreeing to the contents by signing.
Didn’t hear from your partner?
Didn’t you receive any communications from your Microsoft Cloud Partner or a request to agree to the terms of the Microsoft Customer Agreement? Than you might be at risk. Your cloud services may be interrupted after January 31., 2020. Please do contact us for assistance. Might you have any additional questions or need consulting on your software license or cloud subscription agreements? Please let one of our licensing and cloud experts help you.
Links
Microsoft Customer Agreement (multiple languages)
Product Terms and Online Services Terms
Service Level Agreements for online services