If you run a UK IT reseller turning over less than £5 million a year, the Microsoft Cloud Solution Provider programme has a message for you: go indirect or go home. Microsoft's October 2025 changes raised the bar for direct-bill partners to $500,000 in trailing twelve-month CSP revenue — a threshold that puts direct billing out of reach for the vast majority of small UK channel businesses. That is not a penalty. It is, frankly, a favour. The indirect model lets you sell Microsoft 365, Azure, Dynamics, and the full Microsoft cloud stack without managing billing infrastructure, navigating Microsoft's partner portal bureaucracy, or meeting escalating revenue thresholds. Your distributor handles the back office. You handle the customer. The margin is tighter than direct billing, but the operational overhead is a fraction of what direct partners carry. This guide walks through how the indirect model works, compares the four UK distributors worth talking to — Pax8, TD Synnex, Giacom, and Westcoast — and sets out a 30-day plan to get your first customer live. Whether you are transitioning from direct billing or entering CSP for the first time, the indirect route is the pragmatic choice for partners who would rather spend time selling than wrestling with Microsoft's back-end systems.
What the Indirect Model Actually Means
The Microsoft CSP programme operates on two tracks. Direct-bill partners have a direct contractual relationship with Microsoft, handle their own billing, manage customer tenants through Partner Centre, and access Microsoft's full incentive structure. Indirect resellers work through an authorised distributor — called an indirect provider — who holds the Microsoft relationship, processes billing, and provides the provisioning platform.
For small UK resellers, the indirect model means you sign up with a distributor, gain access to their cloud marketplace, provision Microsoft licences for your customers through that marketplace, and the distributor handles the monthly billing cycle with Microsoft. Since October 2025, Microsoft raised the direct-bill threshold to $500,000 in trailing twelve-month revenue, which effectively locked out every UK reseller turning over less than roughly £400,000 a year in Microsoft licences alone. The indirect model exists precisely for firms below that line. You bill your customer at whatever margin you choose. The distributor bills you at a discounted rate. The difference is your gross margin.
The critical distinction: in the indirect model, your customer's Microsoft tenant is linked to your distributor, not directly to you. This means moving customers between distributors requires a tenant migration, which is administratively painful but technically straightforward. Choose your distributor carefully at the outset.
Microsoft's minimum requirement for indirect resellers from October 2025 is $1,000 in trailing twelve-month CSP revenue — roughly £800. If you have even one customer on Microsoft 365 Business Basic, you clear that threshold. The bar is deliberately low because Microsoft wants small partners in the indirect channel, not out of it entirely.
Why Indirect Is Not a Consolation Prize
There is a persistent myth in the UK channel that indirect CSP is the lesser option — something you settle for because you cannot afford direct billing. That framing is wrong, and it costs small resellers time and money when they try to maintain direct status they do not need.
Direct billing requires infrastructure: a billing platform capable of handling Microsoft's monthly reconciliation files, staff who understand Microsoft's constantly shifting licence terms, and the operational bandwidth to manage escalations through Partner Centre. For a reseller with five staff and 200 Microsoft seats under management, that overhead eats into margin faster than the slightly better wholesale pricing compensates for it.
The indirect model strips that overhead out. Your distributor's platform handles provisioning, billing reconciliation, licence changes, and first-line Microsoft support escalation. You get a single monthly invoice from your distributor rather than managing Microsoft's billing complexity directly. The time you save goes into winning and serving customers — which is where a small reseller's margin actually lives.
The margin difference between direct and indirect is typically 2–5 percentage points on Microsoft 365 core licences. On a 200-seat customer paying Business Premium at roughly £19 per user per month, that difference amounts to £76–190 per month. Against the cost of a billing platform (£200–500 per month), reconciliation staff time, and Microsoft relationship management overhead, indirect is the more profitable model for partners below a certain scale.
Comparing UK Distributors: Pax8, TD Synnex, Giacom, and Westcoast
UK CSP Indirect Distributor Comparison
Comparison of UK CSP indirect distributors across key criteria for small resellers under £5m revenue.
Source: CTC Editorial Research 2025
Four distributors dominate the UK CSP indirect market. Each has a different heritage, a different marketplace model, and a different sweet spot in terms of partner size and capability.
Pax8 entered the UK market from a US base and positions itself as a born-in-the-cloud distributor. The Pax8 marketplace extends beyond Microsoft to include security vendors (SentinelOne, Proofpoint), backup (Datto, Veeam), and productivity tools. Pax8's strength for small UK resellers is the breadth of that marketplace — you can consolidate your entire cloud stack onto a single billing platform rather than managing separate relationships with each vendor. Pax8 provides 24/7 support from UK-based teams and has invested heavily in onboarding automation. The trade-off is that Pax8's Microsoft-specific margin may be marginally thinner than a traditional distributor, because their commercial model assumes you are buying multiple products through the marketplace, not just Microsoft licences.
TD Synnex is the largest global technology distributor by revenue and brings the deepest Microsoft relationship of any indirect provider in the UK. TD Synnex operates the SureStep programme, which pairs new CSP partners with trained ambassadors who walk you through Microsoft's portals, incentive structures, and funding options. For resellers who want to build an Azure practice alongside Microsoft 365, TD Synnex's Azure enablement resources are the strongest in the UK market. The trade-off is complexity — TD Synnex's portal and ordering systems reflect the scale of a global distributor, and smaller partners sometimes find the interface less intuitive than cloud-native alternatives.
Giacom is the UK-specific distributor that acquired intY in December 2023 to become the country's largest provider of Microsoft licences to SMBs. Giacom's Cloud Market platform serves over 4,000 UK partners and is built around simplicity — a self-service portal designed for resellers who want to provision licences, add security products, and manage billing without a steep learning curve. Giacom's sweet spot is the micro-reseller: partners with 50–500 Microsoft seats who want a straightforward platform without enterprise-grade complexity. The trade-off is that Giacom's marketplace is narrower than Pax8's and its Azure enablement is less developed than TD Synnex's.
Westcoast is a UK-headquartered broadline distributor that added CSP indirect distribution to its existing hardware and software business. For resellers who already buy hardware through Westcoast, adding CSP through the same distributor simplifies vendor management and may unlock combined volume benefits. Westcoast's Microsoft practice is smaller than TD Synnex's and its cloud marketplace less mature than Pax8's, but the relationship simplicity appeals to traditional resellers transitioning from hardware-led to cloud-led models.
Margin Structure: What You Actually Keep
CSP Indirect Margin Stack — Microsoft 365 Business Premium
Typical margin breakdown showing how the list price flows from Microsoft through distributor to reseller to end customer.
Source: Cloudmore / CTC Editorial Analysis 2025
Margin transparency in CSP is imperfect, but the general structure works as follows. Microsoft sells to your distributor at a wholesale discount off list price. Your distributor sells to you at a margin above that wholesale price. You sell to your customer at whatever price you set.
The typical margin stack for a small UK indirect reseller on Microsoft 365 Business Premium (list price roughly £19 per user per month) looks like this: Microsoft's wholesale discount to distributors sits at approximately 20 per cent off list. The distributor takes 3–6 per cent of that as their margin. You receive 12–18 per cent margin as the reseller, depending on your volume, your distributor relationship, and whether you have negotiated preferential terms.
On a practical basis, if you are managing 500 Microsoft 365 Business Premium seats through an indirect distributor, your monthly gross margin on the Microsoft licences alone sits somewhere between £1,140 and £1,710. That is licence margin only — it does not include the managed services, security add-ons, migration projects, or consultancy that should sit around every Microsoft engagement.
The real commercial opportunity in CSP indirect is not the licence margin. It is the services margin built on top of the licence relationship. A customer buying Microsoft 365 through you needs someone to configure Conditional Access policies, manage Intune device enrolment, run phishing simulations, handle Defender for Office 365 alert triage, and provide ongoing user support. That services layer is where margins of 40–60 per cent are achievable, and where small resellers differentiate from competitors who just provision licences and send an invoice.
Getting Started in 30 Days
The path from zero to first customer on indirect CSP is shorter than the average reseller expects. Here is a 30-day plan that assumes you have not previously held CSP status.
Week one: choose your distributor and enrol. Compare Pax8, TD Synnex, Giacom, and Westcoast against the criteria that matter to your business — marketplace breadth, Azure capability, portal usability, and UK support quality. Apply to your chosen distributor. Enrolment typically takes 3–5 business days, with ID verification and credit checks forming the main bottleneck.
Week two: set up Partner Centre and complete security requirements. Register for Microsoft Partner Centre as an indirect reseller (free, no revenue threshold to register). Configure multi-factor authentication across all admin accounts — Microsoft enforces a Partner Centre security score of 80 or above, and MFA is the quickest way to hit that threshold. Your distributor will guide you through this; Pax8 and Giacom both offer automated security configuration wizards.
Week three: provision your first customer. Start with an existing customer if possible — migrating a customer from direct licensing or another distributor to your indirect CSP tenancy. If you are starting fresh, provision a trial tenant and walk through the full ordering, provisioning, and billing cycle using your distributor's portal. Understand how licence changes (adding seats, upgrading SKUs, cancellations) flow through the system before you have a live customer depending on it.
Week four: build your services wrapper. The licence is the foot in the door. Build a standard services package around Microsoft 365 that includes tenant configuration, security baseline setup (Conditional Access, MFA enforcement, DLP policies), user onboarding, and ongoing helpdesk support. Price this as a per-user per-month fee on top of the licence cost. This is where your margin lives and where you become difficult to displace. Pay close attention to currency exposure: Microsoft prices CSP in US dollars, and your distributor converts to sterling at their own published rate. Some distributors lock the exchange rate monthly, others weekly. A two-pence swing on the dollar over a quarter can eat a full percentage point of margin on a 200-seat account if you bill clients in fixed GBP.
Five Mistakes Small Resellers Make with CSP Indirect
First, choosing a distributor based solely on margin. A distributor offering half a percentage point more on Microsoft 365 but providing weak support and a clunky portal will cost you more in wasted time than the margin difference is worth. Evaluate the full relationship, not just the price list.
Second, treating CSP as a licensing-only play. If all you do is provision licences and bill the customer, you are competing on price against every other indirect reseller in the UK. Build services around the licence to create margin and stickiness.
Third, ignoring the security requirements. Microsoft's Partner Centre security score is not optional. Partners who fail to maintain an 80+ score risk having their CSP privileges suspended. Configure MFA, review admin access regularly, and treat Microsoft's security baseline as a business requirement, not a compliance exercise.
Fourth, spreading licences across three or four distributors simultaneously. Some resellers split their CSP business across two or three distributors to hedge risk. This fragments your volume, complicates billing, and makes it harder to negotiate preferential terms. Pick one primary distributor and commit.
Fifth, failing to plan for customer growth. A customer who starts with five Microsoft 365 Business Basic licences may grow to 50 Business Premium seats with Azure hosting and Dynamics CRM within two years. Choose a distributor and build a practice model that scales with your customers, not one that forces re-platforming when requirements outgrow your initial setup.
The Checklist Before You Sign Up
Before committing to a distributor, confirm these points. Does the distributor support GBP billing, or will you be invoiced in USD and carry exchange rate risk? Does the portal allow you to set your own retail pricing per customer, or does it force standardised margins? What is the escalation path when a Microsoft technical issue exceeds your capability — do you raise a ticket with the distributor, or are you directed back to Microsoft's generic support? Can you provision Azure subscriptions alongside Microsoft 365 through the same platform, or does Azure require a separate relationship? What notice period applies if you want to move your customer base to another distributor, and what data portability commitments are in writing?
Before signing anything, confirm that the distributor assigns you a dedicated UK-based partner manager rather than routing queries through a shared EMEA support queue. Ask for their standard SLA document upfront, not after onboarding. Verify in writing that customer relationships and billing data remain yours if you later migrate to another distributor or qualify for direct billing.
These questions sound administrative, but the answers determine whether your distributor relationship is an enabler or an obstacle as your cloud practice grows.
