Microsoft Commerce Incentive Programs Overview

Microsoft Commerce Incentive (MCI) Programs reward partners for selling Microsoft solutions like Azure, Modern Work, Security, and Business Applications. These programs combine 60% rebates and 40% co-op marketing funds to provide immediate financial benefits and support long-term growth.

Key Highlights:

• Purpose:
  • Promote SaaS adoption.
  • Increase Azure usage.
  • Boost marketplace transactions.
• Eligibility:
  • $25,000+ in trailing 12-month revenue.
  • Solutions Partner designation.
  • CSP authorization (updated requirements effective October 1, 2025).
• Incentive Types:
  • Activity-Based: Rewards for customer-focused activities like workshops or migrations.
  • Transaction-Based: Incentives tied to license sales and billed revenue.
  • Usage-Based: Rewards based on customer consumption, especially for Azure.

Financial Benefits:

• Rebates offer unrestricted funds for operational needs.
• Co-op funds support activities like certifications, training, and marketing.
• Payments are processed monthly and follow a six-month cycle for co-op funds.

How to Get Started:

1. Enroll via Partner Center and meet eligibility criteria.
2. Use co-op funds strategically for growth.
3. Track performance and claims using tools like WeTransact.

MCI Programs help partners grow revenue, expand into new markets, and strengthen their Microsoft partnership.

Microsoft Incentives FY25: A Complete Guide for Partners || AlifCloud || Micorsoft

Main Types of Microsoft Commerce Incentives

Microsoft Commerce Incentive (MCI) programs categorize rewards into three main types, each designed to align with specific partner activities. Some focus on immediate sales, while others aim to promote ongoing customer success. To make the most of these programs, partners should identify qualifying activities and align their efforts with the incentives that best match their business goals. Below is a breakdown of each incentive type and how they can impact your operations.

Activity-Based Incentives

Activity-based incentives reward partners for carrying out specific customer-focused activities that encourage Microsoft product awareness and adoption. These activities often involve both pre-sales and post-sales support, which are crucial for successful product implementation.

Partners can earn these incentives across key solution areas, including Modern Work, Security, Business Applications, and Azure. Examples of qualifying activities include conducting security assessments, running proof-of-concept workshops, managing migrations, and providing technical consultations.

The reward structure for activity-based incentives is split into 60% rebate and 40% co-op earning for eligible engagements. This setup offers immediate financial benefits while also building cooperative marketing funds that can be reinvested into future growth initiatives.

"Cooperative (co-op) marketing funds are funds that you earn through Microsoft Incentive Programs by claiming reimbursement for activities that support Microsoft product awareness." – Samridhi Sharma, Digital Marketing Strategist, Maven Collective Marketing ^[3]

Co-op funds can be used to support readiness activities, such as earning certifications, developing specializations, or completing Microsoft training. This creates a continuous cycle where current activities help fund future capabilities.

To access co-op funds, partners must stay enrolled in the MCI program and ensure their bank and tax profiles are up to date in Partner Center. Claims require documentation that proves the partner’s involvement in customer engagements and shows how these activities supported Microsoft product adoption.

Transaction-Based Incentives

Transaction-based incentives focus on driving revenue through license sales. These rewards are tied directly to the volume of transactions processed across Microsoft’s product portfolio, with a particular emphasis on Azure, Microsoft 365, and Dynamics 365. Most of these transactions occur through the Cloud Solution Provider (CSP) channel, and rewards are based on billed revenue.

Incentive payouts can vary depending on geographic location, as Microsoft organizes markets into three categories - Markets A, B, and C - each with its own payout structure. This ensures that rewards are tailored to reflect local market conditions.

To qualify, partners must hold valid CSP Indirect Reseller Channel authorization.

Usage-Based Incentives

Usage-based incentives reward partners based on the actual consumption of Microsoft products and services, especially Azure. This model is designed to encourage long-term customer success by meeting Azure Consumed Revenue (ACR) targets and fostering sustained usage growth.

These incentives often include Azure credits and discounts, which help partners lower operational costs while deepening their expertise with Microsoft’s cloud platform. For Dynamics 365, the focus is on improving customer experience and support capabilities, with rewards tied to measurable enhancements in these areas.

This approach aligns incentives with performance, directly linking consumption growth to partner rewards. To qualify, partners must provide Proof of Execution (POE), documenting customer associations and usage growth to validate their contributions.

Financial Benefits and Payment Structure

Microsoft Commerce Incentive Programs provide meaningful financial rewards to SaaS publishers, offering a payment structure that supports both immediate revenue needs and long-term business growth.

Rebate and Co-op Fund Distribution

Incentive earnings are divided into 60% rebates and 40% co-op funds ^[4]. This structure allows partners to balance flexibility with strategic growth investments.

Rebates, which make up the majority, come with no restrictions. Partners can use these funds however they see fit - whether to cover operational costs, invest in product development, or support day-to-day business needs. Microsoft does not require documentation or approval for how rebates are spent.

On the other hand, co-op funds are earmarked for specific Microsoft-approved activities. These include initiatives like digital marketing campaigns, employee training, certification programs, and other growth-focused projects. Partners must provide documentation to claim reimbursements for these funds.

Co-op funds operate on a six-month cycle ^[4]. During one period, partners earn co-op funds, which they can then use in the following six months. Reimbursements can be claimed during a designated window. If a partner’s earnings fall below a set threshold in a given period, Microsoft converts the unused co-op funds into rebates at the end of the cycle.

This dual-earnings model also extends to marketplace transaction incentives, offering additional growth opportunities.

Marketplace Transaction Incentives

The Marketplace Transact and Grow Campaign rewards publishers with progressive rebate structures based on sales performance. These incentives are specifically designed to encourage SaaS publishers to create transactable offers on the Microsoft commercial marketplace and drive higher sales volumes.

Partners can track their marketplace performance through the Insights dashboard in Partner Center. This tool consolidates revenue and earnings data, making it easy to monitor progress. For example, the EstimatedPayoutMonth column indicates when to expect payments for specific transactions, while the invoiceid field helps identify transaction types, such as those tied to Enterprise Agreement (EA) or Microsoft Customer Agreement (MCA) transactions.

Microsoft enforces strict payment accountability. If a customer fails to pay for a marketplace transaction, Microsoft may recover the payout by deducting the unpaid amount from future payments or requesting a direct refund.

Azure-specific incentives further align rewards with usage growth, offering another layer of opportunity for partners.

Azure-Specific Incentives

The Azure Innovate program provides tiered rewards based on deployment size and customer engagement, emphasizing sustained Azure consumption growth. These incentives, part of the broader ISV ACR Growth Campaign, operate on a usage-based model. Rewards are tied directly to Azure Consumed Revenue (ACR) targets, encouraging long-term customer success over one-off transactions.

Payment timelines for all incentives follow a consistent schedule. Payments are typically processed by the 15th of each month and take an additional 3 to 10 business days to appear in the partner’s payout account ^[5]. Once claims are approved, payments are issued within the standard 45-day cycle of the MCI program ^[2]. All payments are issued from Microsoft Corporation’s US headquarters in Redmond, WA, ensuring compliance with international banking standards.

For SaaS publishers managing their Azure Marketplace presence, tools like WeTransact can significantly enhance ROI. WeTransact’s private offer management and ROI tracking features provide a clear view of incentive earnings alongside marketplace revenue, helping publishers maximize the value of their Microsoft partnership.

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How to Set Up and Optimize Incentives

To fully benefit from Microsoft Commerce Incentive Programs, it’s essential to handle enrollment and claims management effectively. These steps ensure you’re set up for success and can maximize the financial opportunities available.

Enrollment Process Through Partner Center

The enrollment process involves two key steps: managing users and completing enrollment tasks ^[6]. Start by assigning the Incentive Administrator role in Partner Center. This action triggers an enrollment invitation, allowing you to log in and review the necessary invites and actions in the Incentives workspace.

Make sure your tax and bank details linked to your MPN ID are up to date. These details are crucial for payout verification ^[6][7]. If updates are required, you’ll need to complete a verification form to confirm your company’s identity ^[2]. Keep in mind that enrollment typically expires at the end of the fiscal year. However, it is often renewed automatically if eligibility criteria are still met. Some programs are open to all partners, so it’s worth exploring your options.

Once your enrollment is confirmed, you’ll be in a strong position to manage claims and maximize your rewards.

Submitting and Tracking Claims

Submitting incentive claims involves a structured process that requires proper documentation and attention to detail ^[2]. First, ensure all customers are correctly associated with your Partner Center account - this step is essential for eligibility. Then, submit the required documents, such as invoices or surveys, along with brief comments, all within the specified engagement timeline.

Stay on top of submission deadlines and promptly respond to any requests from Microsoft. If a claim is rejected, you have up to 30 days to dispute it. In such cases, update your proof of execution and provide additional justifications to support your claim. Use the Partner Center dashboard to monitor the status of your claims, so you can take timely action and anticipate payment schedules.

Using Tools like WeTransact

For a more streamlined approach, tools like WeTransact can simplify incentive management. This platform helps with private offer management, ROI tracking, and marketplace entry. By offering a clear view of how marketplace transactions tie into incentive rewards, WeTransact allows you to focus on activities that yield higher returns. It also reduces the time it takes ISVs to publish by up to 75%, enabling faster access to transaction- and usage-based incentives ^[8].

For instance, one company boosted its marketplace billed sales by 320% in just four months, while another landed a major deal within days after receiving go-to-market guidance ^[8].

"Microsoft Azure provides the robustness needed to scale our operations, while Azure OpenAI Service opens doors to building new kinds of partnerships directly from the marketplace. Together, these technologies enable us to empower ISVs to innovate and thrive within the Microsoft ecosystem." – Johan Aussenac, CEO, WeTransact ^[8]

WeTransact also strengthens co-selling relationships with Microsoft and provides go-to-market advisory services. These services ensure your marketplace strategy aligns with available incentive opportunities, helping you grow revenue while making the most of incentive programs.

Business Benefits of Microsoft Commerce Incentives

Microsoft Commerce Incentives (MCI) programs go beyond just financial perks - they offer opportunities to expand your reach, strengthen your market position, and accelerate business growth. These programs are designed to help you engage more effectively in the market while optimizing your financial outcomes.

Access to Enterprise Procurement Channels

By participating in MCI programs, you gain access to Microsoft's vast enterprise customer network through co-selling opportunities. Achieving co-sell-ready status ensures your SaaS solution is visible to Microsoft’s sales teams, who work directly with enterprise clients. This visibility connects you to customers who might otherwise be out of reach ^[1].

Additionally, Azure IP co-sell eligibility boosts your offering by allowing it to contribute toward customers' Azure Consumption Commitments (MACC) ^[1]. Solutions that qualify also receive a Microsoft preferred solutions badge in the Azure Marketplace and AppSource, signaling trust and reliability to enterprise buyers ^[1].

Go-to-Market Support

MCI programs provide exclusive resources to help you scale your marketing efforts and enhance your credibility through joint initiatives with Microsoft. These resources include digital marketing assets, sales enablement tools, and technical documentation to position your solution effectively within the Microsoft ecosystem.

The program also offers cooperative marketing funds specifically designed for demand generation activities ^[7]. These funds can be used for digital marketing campaigns, lead generation, and customer acquisition efforts. This partnership often leads to co-branded campaigns, joint marketing initiatives, and participation in Microsoft-hosted events and conferences.

Improved Financial Returns

MCI programs deliver strong financial benefits through flexible rebates and targeted co-op funds ^[2]. Rebates come with no restrictions on how they’re spent, giving you the freedom to reinvest in areas like product development, sales team growth, or other business priorities ^[2].

For Business Applications partners, the financial incentives are particularly appealing. For example, there’s a 20% incentive for Dynamics 365 customer additions, and these earnings are uncapped ^[9]. Core Business Applications partners can also earn a 4.75% incentive on billed revenue, again without limits ^[9].

Other benefits include usage-based incentives like Azure credits or discounts, which can lower operational costs while encouraging deeper integration with Microsoft’s cloud platform. These savings can significantly impact your bottom line ^[2].

Partners who accumulate over $10,000 in co-op earnings within six months gain access to Microsoft’s co-op claiming tool, simplifying fund management ^[7]. Smaller accruals are automatically converted into rebates, ensuring no earnings go to waste ^[7].

Conclusion: Growing Your Business with MCI Programs

Microsoft Commerce Incentive (MCI) Programs provide SaaS partners with more than just financial rewards - they offer a chance to expand into new markets, scale operations, and gain credibility under the Microsoft banner. These programs are designed to accelerate growth and deepen connections with enterprise customers. Here’s what SaaS partners need to focus on to make the most of these opportunities.

Key Points for SaaS Partners

The first step is enrollment. Complete the onboarding process, sign the Partner Agreement, and ensure your business meets the $25,000 trailing twelve months (TTM) revenue threshold ^[7]. Meeting these criteria is essential to unlock the full range of program benefits.

The financial rewards from MCI programs are flexible and impactful. Rebates, which are unrestricted, can be reinvested into core areas like product development, expanding sales teams, or other priorities ^[7]. For co-op earnings over $10,000, fund management becomes more streamlined, while smaller balances are automatically converted into rebates for added convenience ^[7].

But the value of these programs isn’t limited to financial returns. Achieving co-sell–ready status connects you with Microsoft’s enterprise sales teams, giving you access to a broader customer base. Additionally, solutions eligible for Azure IP co-sell status contribute to customers' Azure Consumption Commitments, making your offerings even more attractive.

Staying informed about annual program updates is crucial ^[3]. Partners who adapt their strategies to these changes are better positioned to seize new opportunities as they arise.

Next Steps for Getting the Most from Incentives

To fully leverage the benefits of MCI programs, take these actionable steps:

• Enroll and meet eligibility requirements: Join the program through Partner Center and ensure you meet all criteria, including achieving Solutions Partner designations. Focus on Azure-related specializations, as Microsoft is increasing incentives for partners with demonstrated expertise in this area ^[3].
• Make strategic use of co-op funds: Use these funds for lead generation, brand promotion, and team training. Align your marketing efforts with Microsoft’s product awareness campaigns to extend your reach and strengthen your partnership with Microsoft ^[3].
• Leverage tools and resources: Utilize Partner Center tools and platforms like WeTransact to streamline your operations. The AI assistant in the Earnings workspace can help track trends and performance, while resources like the Partner Launch Calendar and CSP Bimonthly Update newsletter keep you informed about the latest opportunities ^[10].

For SaaS publishers, platforms such as WeTransact simplify the process of publishing and selling on the Microsoft Azure Marketplace. WeTransact offers tools for managing app listings, creating pricing plans, and connecting with Microsoft resellers. It also provides go-to-market support, private offer management, and ROI tracking - all of which complement MCI programs to boost your marketplace presence and earnings.

FAQs

What are the eligibility requirements for joining the Microsoft Commerce Incentive Programs, and how can partners ensure they qualify?

To participate in Microsoft's Commerce Incentive Programs, partners must fulfill specific criteria, which can differ depending on the program. Generally, this involves being fully registered in the Microsoft Partner Center and having all required agreements finalized. Some programs might also set performance goals or revenue requirements, such as generating over $10,000 in co-op funds within a specific timeframe.

Partners should regularly check their status in the Partner Center to confirm eligibility, stay updated on program rules, and meet all necessary conditions. Leveraging Microsoft resources and support tools can be a great way to remain aligned with requirements and make the most of the program's benefits.

How can partners effectively use co-op marketing funds to grow their business and strengthen their Microsoft partnership?

Partners have a great opportunity to maximize co-op marketing funds by channeling them into activities that align with Microsoft's goals while driving their own business growth. These funds can support a variety of initiatives, such as demand generation campaigns, co-branded marketing materials, webinars, or digital advertising aimed at attracting new leads and increasing conversions.

Smart use of these resources can help partners boost their visibility, connect with customers more effectively, and execute marketing strategies that deliver results - all without stretching their budgets. When used strategically, co-op funds not only improve return on investment but also strengthen the partnership with Microsoft, setting the stage for shared success.

What tools can SaaS partners use to track and manage their incentives in Microsoft Commerce Incentive Programs?

SaaS partners have access to several tools and resources to effectively track and manage their incentives within Microsoft Commerce Incentive Programs. The Partner Center serves as the central hub, allowing partners to view their incentive earnings, submit claims, and oversee payouts. To streamline operations, it’s a good idea to appoint an Incentive Administrator within your organization. This role ensures claims are handled efficiently and that all incentive activities are properly managed.

Microsoft also offers comprehensive guides and resources to help partners navigate the incentive structure, handle claims, and manage customer associations through models like the Claiming Partner of Record (CPOR). These resources are designed to make the entire process easier and help you get the most out of the program.

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