Announcing changes coming to partner incentives and investments in fiscal year 2023
At Microsoft, we recognize that successful partners drive transformational customer solutions. In our upcoming fiscal year 2023 (FY23) that begins in July, we will continue to evolve our partner incentives and investments portfolio to provide a smooth and predictable partner experience that helps partners deliver exceptional value to customers. As we update our portfolio for the FY23 program term, we are focused on three design principles, aligned to our business priorities, partner opportunity, and customer needs.
Partners are invested in the cloud: Our incentives and investments portfolio aligns with our commitment to the cloud, with partner opportunity across our six cloud solution areas: Data and AI (Azure), Infrastructure (Azure), Digital and App Innovation (Azure), Business Applications, Modern Work, and Security.
Partner value extends across the customer lifecycle: Partners have tremendous opportunity when leading with value-added services, impacting initial customer demand through build intent activities, facilitating sales and transactions, and enabling post-sales consumption and business growth.
Simplicity is essential: We drive for simplicity and clarity. Our programs center on driving partner growth and equipping partners with the support needed to provide innovative, customer-centric, trusted solutions.
We remain dedicated to enabling partners to develop winning solutions, drive profitable businesses, and stay one step ahead of customer expectations. Below is a preview of our incentives and investment program updates coming in FY23:
- Overall effective rate maintained in Enterprise: We continue our investment commitment to partners who establish meaningful relationships with Enterprise customers to drive new, renewal, and true-up opportunities. The overall effective rate for the FY23 Enterprise program remains consistent with the FY22 program rate.
- Incentives for Cloud Solution Providers (CSP): We continue to invest in CSP partners through breadth earning opportunities in the Microsoft Commerce Incentives (MCI) program. The overall earning rates across core levers, strategic product accelerators, and customer add accelerators remain consistent with FY22. We are adjusting Modern Work and Security core program rates in the new commerce experience for Direct Bill and Indirect Reseller partners for consistency with the FY22 legacy CSP incentives program. We are redeploying the impact of this change through an increase to the customer acquisition lever, rewarding partners who drive new Modern Work and Security business. As previously announced, incentives support for legacy CSP seat-based subscriptions will retire in December 2022.
- Focused Azure incentives in Microsoft Commerce Incentives: We are rebalancing incentives on Azure consumed revenue through Partner Admin Link (PAL), rewarding partners who drive customer growth and showcase their expertise through specializations.
- Activity-based incentives: We continue to invest in pre-sales and post-sales workshops and assessments across our six cloud solution areas to drive customer acquisition and solution adoption. Partners will see new earning opportunities with Modern Work, Security, Business Applications, and Azure in FY23, as well as an improved operational experience for activities found in the Microsoft Commerce Incentives program.
- Cooperative Marketing Funds: We are launching cooperative marketing funds (co-op) to the Microsoft Commerce Incentives program in FY23. Once launched, partners earning incentives on breadth motion engagements in Microsoft Commerce Incentives will see incentives earnings split between standard rebate and co-op. More information on these co-op changes will be shared in the coming months.
- Microsoft Cloud Partner Program: As stated in the Microsoft Cloud Partner Program announcement, partners attaining legacy competencies by September 30, 2022 or renewing legacy competency benefits will continue to earn incentives in FY23 program terms as eligible. FY23 incentives programs will also support the new Microsoft Cloud Partner Program solutions partner designations.*
These changes are planned to take effect in October 2022 as part of our standard FY23 investments and incentives program launch. We are sharing updates now to help our partners plan ahead and will share additional details in the coming months. Visit the Microsoft partner website for more information about each incentive program and to learn more about how you can maximize your earning opportunity and accelerate digital transformation. Thank you for your partnership!
*Partners with solutions partner designations are unable to earn legacy CSP incentives for legacy seat-based CSP subscriptions which retire in December 2022.