This blog is part three of a four-part series on maximizing the marketplace opportunity. This edition is focused on selling through Microsoft partners. Be sure to read part one and part two.
Cloud marketplaces are a fast-growing opportunity for software development companies and channel partners alike. The cloud marketplace opportunity is expected to reach $85 billion, with over half of those sales expected to be channel led1. Microsoft is—and always will be—a partner-centric organization. Through the Microsoft marketplace, we’re helping partners sell together through a variety of custom deal mechanics while getting access to pre-committed cloud budget with multiparty private offers.
As a global business platform, the Microsoft marketplace brings partners and customers together in one place—software companies can scale their solutions to new markets through channel partners who help customers get the cloud and AI solutions they need. By leaning on a commerce engine that offloads the overhead of global commerce, all partners benefit from simplified selling, reaching enterprise customers and unlocking growth by selling to customers with pre-committed Microsoft Azure Consumption Commitment (MACC) cloud spend.
“With multiparty private offers, we recognized the channel as a whole as one of our key growth strategies to reach the most customers globally.”
— Dynatrace (Microsoft software partner)
“Cloud marketplace is going to have a huge impact on the way that our customers want to buy and spend. We project that in the next two years, 25-40% of our clients’ procurement is going to be through the Microsoft marketplace or cloud marketplaces in general.”
— Trace3 (Microsoft channel partner)
Building strong partner relationships
There’s a powerful symbiotic relationship between software partners and channel partners. With over 100% year-over-year growth in marketplace sales and the average value of channel-led deals being double the size of deals without a channel partner, the marketplace is the center of gravity for how partners go to market together.
As Azure IP co-sell eligible solutions from software providers have grown by 43%, channel partners have a comprehensive catalog to help meet their customers’ technology needs. With advances in AI, there’s added pressure to innovate. Software and channel partnerships have the benefit of empowering software partners to focus on their products while channel partners act as the customer’s trusted advisor for their technology investments. Embedding partner-to-partner co-selling into your marketplace strategy is a crucial step toward accelerating growth and achieving scale through the marketplace.
Best practices for software partners
For software partners, selling your solution in the marketplace potentially places it in front of millions of Microsoft customers—and selling through channel partners helps it reach the right audiences. The Microsoft partner ecosystem is diverse, ranging from niche specialists to large enterprises, with each partner bringing a unique market focus and customer relationships. Working with the right partner can extend your customer base and accelerate sales opportunities. Follow these phases for success:
Phase 1: Sell your solution through the marketplace
If you don’t already have a solution on the marketplace, this is a prerequisite to participating in any through-channel sales opportunities or co-selling. You can use ISV Success for step-by-step support or to list your solution on your own. Details are available in our documentation.
Phase 2: Find partners to sell with
Any Microsoft partner can participate in multiparty private offers after they enroll (details below), but if you need help finding channel partners to sell with, use the eligible channel partner list, which is updated monthly. If you have partners you’d like to sell with that are not listed, they can easily be enrolled. Additionally, software partners have access to campaign-in-a-box resources to recruit new channel partners. Once you’ve identified an ideal partner, make sure they’re enrolled in the marketplace and learn how to send private offers.
Phase 3: Get Azure IP co-sell eligible
Having an Azure IP co-sell eligible solution allows you to sell to customers with MACCs, with 100% of the purchase counting toward their cloud commit. Since 80% of customers with MACCs buy from the marketplace, helping customers use their MACC when purchasing your solution can help unlock enterprise deals with multiparty private offers. View the requirements to become Azure IP co-sell eligible here.
Best practices for channel partners
Channel partners are increasingly using the marketplace to deliver greater value to their customers, including access to differentiated solutions and the latest AI technology, a more efficient sales process through multiparty private offers, and streamlined procurement—all leading to stronger customer relationships and retention. Any partner can access these benefits by taking three easy actions:
1. Enroll in multiparty private offers
Before selling software solutions through multiparty private offers, all channel partners must first enroll in the commercial marketplace and complete business requirements in Partner Center. You can get assistance with enrollment by contacting channelready@microsoft.com.
2. Use Marketplace Rewards for channel partners pilot
Channel partners who are part of the Microsoft AI Cloud Partner Program and based in the US, UK, and Canada (MPO-eligible regions) can now use Marketplace Rewards for channel partners (in pilot) to accelerate growth. These no-cost go-to-market benefits provide access to best practices and guidance to drive repeatable success. Benefits grow as you sell more, and as a special perk for channel partners, Azure sponsorship is available upon enrollment.
3. Co-sell by selling to customers with Azure consumption commitments
By selling Azure IP co-sell eligible software solutions to customers that have a MACC, the entire purchase counts toward their commitment. This helps you maximize your sales, landing bigger deals while supporting a more streamlined procurement experience. Discover resources to help you drive growth through the marketplace.
Real-life success: How Presidio is thriving channel-first
Presidio, a Microsoft partner and channel-first business, is a great example of channel adoption through multiparty private offers. As an early marketplace adopter, Presidio has established relationships with many software partners, bringing the latest cloud and AI technology to their customers through the marketplace.
Through multiparty private offers, Presidio can sell third-party software that is aligned with their professional and managed services, offering their customers a more comprehensive set of solutions while strengthening relationships across customers, partners, and Microsoft. As customers request new software, Presidio continues to build new partner relationships, using the marketplace to transact with ease. Helping their customers buy through the marketplace creates a domino effect—one deal often sparks another, leading to repeat transactions that drive business growth.
“Once we help a customer understand how to use and purchase through the marketplace—we see that one deal turn into another, and another, and another. And each of those deals help them fulfill their MACC with Microsoft. Oftentimes customers come to ask about specific software to procure through the marketplace. And shortly after that, they're asking us for another one, and another one. Our team loves it. The customer loves it. And Microsoft loves it.”
— Rob Phillips, Microsoft Sales Director, Presidio
A business platform designed with partners in mind
Through the marketplace, we are committed to being partner-focused, maintaining a simple and transparent fee structure:
- 3% standard fee for transactions across all marketplace offer types.
- 50% reduced agency fee for customer renewals via private offer.
- 100% match on all marketplace purchases of Azure IP co-sell offers toward the customer’s cloud commitment—with no limit.
With more flexible deal options, including Cloud Solution Provider (CSP) private offers, we are continuing to improve the marketplace to streamline deal-making, improve financial operations, increase customer discoverability of your solutions, and accelerate your growth with AI. Discover CSP private offers and other deal types in our documentation.
In our next and final blog, we will dive into how you can maximize co-selling opportunities with Microsoft sellers.
1Canalys, Hyperscaler cloud marketplace sales to hit US$85 billion by 2028