What’s New with the Azure Marketplace and Microsoft Partner Program?

In July, Microsoft announced a number of changes to their Microsoft Partner Program. To help you navigate these changes,  what they mean for you and your team’s success in the Microsoft cloud ecosystem, we’ve brought together our own in-house Microsoft experts, Frank Artale and Jont Kingsepp, to answer the most common questions around these new changes and why they are valuable to you.

In 1-2 sentences can you each tell me what you think the most impactful change is to the partner program coming out of this summer’s announcement?

Frank: The biggest impact is the emphasis on marketplace transact over IP co-sell referrals from a Microsoft field engagement perspective.

Jont: While a ton of content highlighted the successes and potential of intelligent, learning platforms like Co-Pilot, the most notable change to me was the high bar set for top-tier status. This status brings extraordinary benefits, but will require many ISVs to re-imagine the structure of a meaningful co-sell relationship with Microsoft.

What changed around how ISVs are measured?

Frank: In the past, a partner could fully engage the Microsoft field without being transactable. This is no longer the case.

Jont: Historically, co-selling with the Microsoft field by registering deals in Partner Center was a key benchmark used in the measurement process (among other attributes). Going forward, co-sell will remain important but the unit of measure of SaaS transactions through the commercial marketplace, instead of registrations in the Partner Center.

The term Top-Tier partner  – what does that mean and how does a partner become Top-Tier? How can you become IP co-sell eligible?

Frank: Top-Tier has actually existed for 2 years. In the past, the Microsoft field compensation accelerated for top tier partners. Now, for the Microsoft field to be compensated on partner sales at all the partner must be top tier. The requirements for IP co-sell eligible are the same as the old IP co-sell. Top Tier has a set of requirements based on marketplace place transact volume in addition to the IP co-sell eligibility.

Jont: Frank is spot on, particularly with regard to marketplace. As stated in this Microsoft blog, marketplace is the foundational platform to earn IP co-sell benefits. It’s as straightforward as can be – if Microsoft is or can be an important channel for any ISV, your first step is marketplace.

What are the additional partner levels and can you clarify the benefits of each?

Frank: Top-tier is the new premier level and largely takes the place of the FY23 IP co-sell tier. The primary benefit is that the Microsoft field will retire quota for the full value of the partner’s marketplace transactions. In addition, the partner can optionally allocate their own Azure spend to specific customers which also strengthens field engagement.

What has changed with the Microsoft Azure Cloud Commitment (MACC)?

Frank: The MACC has not changed radically from a customer POV.

Jont: I was encouraged to hear Microsoft’s intent to retain the 1:1 deprecation of a buyers MACC commitment by transacting partner ISV products through marketplace. Microsoft leads the industry here.

A transactable commercial marketplace offer is now required for Azure IP co-sell eligibility in FY24, what does this mean?

Jont: As stated at Inspire and in subsequent blogs, marketplace is the “foundational platform” to earn IP co-sell benefits and reach higher partner status. ISVs should begin planning (or accelerate existing plans) to activate this motion. Not just land a transactable offer on marketplace, but incorporate this mechanism into GTM activities.

What has changed around how the Microsoft reps are compensated?

Jont: Anyone will be hard-pressed to find anything from Microsoft on this topic. More details will leak into the public corpus, but every indication shows this motion is one that many field-facing teams at Microsoft will actively support.

What do you think the biggest opportunity is for ISVs who are in the Azure marketplace in 2024?

Frank: The biggest opportunity is Multi-party offers. MPO allows a partner to allocate margin to referral or reselling partners without requiring the partners to buy the offer on behalf of the customer.

Jont: The opportunity to achieve more from investing in the Microsoft partnership requires a transactable offer in the marketplace, that much is clear. To realize the most from the opportunity for the next year, ISVs should quickly establish and execute a plan to introduce this motion into every GTM aspect of it’s business. Direct sellers need enablement, “channels” are now “ecosystems” capable of using MPO to more efficiently deliver customer value.

Is there anything software companies should do today to prepare for the partner program changes?

Frank: All ISVs should become transactable.

Jont: Become transactable AND become familiar with the various ways the marketplace motion will impact business processes. Top of my list is getting in front of your revenue teams, direct and indirect, and educate them on this motion. Marketplace is selling in a slightly different and modern way. GTM planning and enablement execution is key.

For software vendors who are not yet on the Azure marketplace, is it too late to see the benefit in 2024?

Frank: It’s a perfect time.

Jont: This is a new motion for everyone. During the 5+ years I’ve been directly engaged in hyper-scale cloud marketplaces, Microsoft’s marketplace has become ‘the’ thing for ISV Partners, instead of “a” thing a handful of years ago.

Still have questions or not sure how to move forward with these changes? Invisory is here to help. Reach out to our team and we can make sure you are on the most successful path.,