Cloud marketplaces are growing due to customer demand. Industry analyst Canalys previously estimated enterprise software sales through hyperscaler marketplaces would reach $45 billion by 2025—they recently revised their estimate to $85 billion by 2028.1
Growth in the Microsoft commercial marketplace matches industry momentum, according to internal Microsoft data that shows:
- Billions in marketplace sales
- 100% growth in revenue
- 230% increase digital direct sales
As more customers look to the marketplace to centralize their cloud investments, Microsoft is dedicated to ensuring the marketplace is a partner-focused business platform. As part of that commitment, Microsoft is evolving the marketplace agency fee structure for renewals through private offers.
As of October 1, 2024, Microsoft will offer a 50% reduced agency fee for renewals sold as private offers through the marketplace. The fee reduction automatically applies when you claim either an existing marketplace agreement or an off-marketplace sale as a renewal in Partner Center. This change helps you maximize profitability while solidifying valued relationships with your customers.
The marketplace: connecting you to Microsoft customers
With cloud budgets increasing, customers are looking to increase the value of their investments. Microsoft lets customers count 100% of eligible purchases towards their Microsoft Azure cloud consumption commitment. This helps customers get more value for their investments, helps you get larger deals, and helps us grow the Azure business.
Now, with agency fees for renewals decreasing, your organization can scale faster to increase your profitability and deal economics. Through the marketplace, access to customers with Azure commitments has grown more than 100%.2 This gives your organization an opportunity to sell to every Microsoft commercial marketplace customer, including 95% of the Fortune 500 that use Azure.3
For partners who develop software, the marketplace is how we sell together. We’re doing more to make it easier for you to connect with our 35,000 global sellers for our shared success.
- Get visibility into customers with committed cloud budgets: You can now identify customers with Azure cloud consumption commitments. After you enter a lead in Partner Center, Microsoft will confirm within one week whether that customer has a commitment so you can move more quickly to close larger deals.
- Add professional services to your offer: We’re offering more ways for you to monetize through the marketplace. Bundle your professional services directly into your software sale for private offers or sell your professional services as a standalone private offer. These options are available to partners selling to Microsoft customers in Canada, the United Kingdom, and the United States.
- Differentiate with certified software designations: Solutions Partner* with certified software** designations make it easier for customers to confidently validate the quality, capability, reliability, and relevance of your software solution. When you become a Solutions Partner with certified software, your solution will receive a digital badge on the marketplace to help you stand out.
Bring your ecosystem to the marketplace
Previously, Canalys estimated 30% of cloud marketplace sales to flow through channel partners by next year.4 They recently revised their estimate to 50% by 20275—giving the Microsoft partner ecosystem of 500,000-plus partners an incredible opportunity to scale and sell together. Customers are continuing to centralize their cloud investments with hyperscalers and the ecosystem opportunity now extends to the marketplace.
Multiparty private offers, now available to customers in Canada, the United Kingdom, and the United States, empower channel partners to extend customer relationships to the marketplace.
Any channel partner can sell multiparty private offers to customers in eligible geographies. The process to onboard to resell applications is simple:
- Be a member of the Microsoft AI Cloud Partner Program.
- Sign the marketplace publisher agreement.
- Submit your tax and resale details for eligible geographies.
For partners who develop software, you simply need to sell your solution to a channel partner through the marketplace. For solutions that are Azure IP co-sell eligible, the purchase of the software counts toward the customer’s commitment—helping you land bigger deals. According to Microsoft internal data, multiparty private offer deals are two times larger than other private offers, on average. Get details on how to sell multiparty private offers here.
Because renewal fee adjustments apply for multiparty private offers, this creates more opportunity for channel partners to extend their customer relationships to the marketplace—saving time and effort with streamlined selling.
Get started today
The Microsoft commercial marketplace is the foundation of your success with Microsoft, helping you reach more customers, simplify sales, and unlock growth. If you’re a partner who develops software and you’re new to the marketplace, explore ISV Success for guidance to accelerate marketplace growth.
We’re keeping marketplace agency fees simple and transparent. The 50% reduced agency fee structure for renewals is automatically applied when you claim a deal as a renewal in Partner Center.
You can take the following key actions to tap into the opportunity today:
1 “Cloud marketplaces sales to hit US$45 billion by 2025,” Canalys, January 26, 2023.
2 Microsoft internal data.
3 Shah Arpan, “Microsoft Azure: The only consistent, comprehensive hybrid cloud,” September 25, 2018.
4 Alastair Edwards, “Are cloud marketplaces worth the hype?,” Canalys, September 17, 2021.
5 “Hyperscaler cloud marketplace sales to hit US$85 billion by 2028,” Canalys, August 15, 2024.
*“Solutions Partner” refers to a company that is a member of the Microsoft AI Cloud Partner Program and may offer software, services, and/or solutions to customers. Reference to “Solutions Partner” in any content, materials, resources, web properties, etc. and any associated designation should be not interpreted as an offer, endorsement, guarantee, proof of effectiveness or functionality, a commitment or any other type of representation or warranty on the part of Microsoft. All decisions pertaining and related to your business needs including but not limited to strategies, solutions, partner selection, implementation, etc., rests solely with your business.
**A certification is (1) specific to the solution’s interoperability with Microsoft products and (2) based on self-attestation by the solution owner. Solutions are only certified as of the date the solution is reviewed. Solution functionality and capability are controlled by the solution owner and may be subject to change. The inclusion of a solution in the marketplace and any such designations should not be interpreted as an offer, endorsement, guarantee, proof of effectiveness or functionality, a commitment or any other type of representation or warranty on the part of Microsoft. All decisions pertaining and related to your business needs including but not limited to strategies, solutions, partner selection, implementation, etc. rests solely with your business.