Azure Marketplace’s Big Bet For FY2026: Agentic AI
As summer kicks into full gear, so does Microsoft begin its next fiscal year. On July 15, 2025 – two weeks after the tech giant’s fiscal year officially began – Microsoft held its partner kick off, MCAPS FY2026. And the major focus? Azure’s big bet on Agentic AI.
Like every tech company, Microsoft is undergoing seismic changes. The AI boom has prompted Microsoft’s cloud division, Azure, to adjust course accordingly. With nearly 4% of the workforce being laid off earlier this month, Microsoft has ambitious goals in mind: drive revenue, cut costs, and outwit the competition with AI. Part of that strategy is doubling down on Azure Marketplace and strategic partnership motions.
Here’s what Azure ISVs need to know.
Azure’s Agentic AI Push
Like Salesforce and the other hyperscalers, Microsoft is doubling down on agentic AI and LLMs (OpenAI has run largely on Azure since the beginning), with the goal of empowering businesses from fresh new startups to centuries-old enterprises to become AI-first organizations.
But what does this mean in practice?
As the fiscal year kicks off, Microsoft is doubling down investments in ISVs building AI agents that improve products such as Bing, SharePoint, Fabric, and Azure Search, as well asLogic Apps, Functions, OpenAPI tools and most importantly, Azure AI Foundry.
A Renewed Interest in Software Designations
At the same time, Microsoft recognizes that despite all of the buzz, agentic AI is a new term, even for the established Microsoft shops. As part of the solution, Microsoft is investing more resources than usual in up-skilling Azure partners.
For ISVs, this means completing the Solution Designation is more important than ever. In the AI business category, that means:
- AI Business Solutions
- Cloud & AI Platforms (Frontier AI solutions, Migrations and Modernizations)
- Security (Securing the Cyber Foundation)
Check out our guide to learn more.
For Microsoft, a huge push is helping legacy businesses weighed down by old tech such as monoliths, microservices, .NET applications, and Java drive cloud adoption faster through Agentic AI. If you can build solutions that drive more results for legacy businesses and (and increase overall Azure adoption), Microsoft will be eager to co-sell it.
For big tech companies, the battle for top AI talent has been and will always be fierce, as best exemplified by Meta’s recent string of acquihires, most notably spending $15 Billion for full access to Scale AI’s Alexandr Wang. Microsoft, however, sees its partnership program as another route towards reaching AI excellence. Azure incentives are up 70% year-over-year for partners expanding workloads, driving user growth, and deepening cloud adoption. They also launched the Azure Accelerate program, combining elements of Azure Migrate and Modernize, Azure Innovate, and Cloud Accelerate Factory.
Doubling Down on Solutions Designations
Solution designations matter more than ever in the Azure Marketplace because they signal credibility, technical depth, and proven customer impact. As Microsoft phases out legacy competencies, designations have become the new standard for standing out and earning trust. They not only drive visibility with enterprise buyers but also unlock co-sell opportunities, Marketplace Rewards, and access to larger budgets. For customers selling agentic AI solutions, designations validate innovation and help position these offerings as enterprise ready. In today’s Marketplace, designations are not just badges, they are the fastest path to growth.
Azure’s Future
Earlier this year Microsoft celebrated its 50th birthday, making it the oldest company with a cloud marketplace. With Microsoft’s storied history comes the challenge of helping Windows 1.0 customers become AI-driven Azure ones. For ISVs, the co-sell opportunities remain in finding ways to migrate legacy applications to the cloud, uncovering new business use cases to leverage Agentic AI, and driving compute that generates value for customers.
