Microsoft Partners Get New Incentives — And Contract, Pricing Changes

Microsoft partners are in for some more billing and pricing conversations with customers — and also some new incentives.

On Tuesday, Nicole Dezen, chief partner officer and corporate vice president of global partner solutions, outlined some of the coming changes in a blog. The adjustments stem from Microsoft’s success in AI, largely due to partner expertise, according to the missive titled, “Accelerating Growth Through Partners in the Era of AI.”

First up, a looming promotion to help customers get AI-ready, per Dezen. 

As of Jan. 1 and running until June 30 of next year, Microsoft partners will get 15% off the net price of 365 E5 annual subscriptions for net-new and otherwise-eligible clients. The offer applies worldwide to buyers consuming anywhere from one to 2,400 licenses. Microsoft will release all the details to partners on Jan. 1. 

Next, recall Microsoft’s Copilot Copyright Commitment? That debuted for customers last year. The commitment promises that if the use of Azure OpenAI results in any copyright lawsuits, Microsoft will “defend these customers and pay for any adverse judgments if they are sued for copyright infringement for the use of the Azure OpenAI Service outputs,” as Brad Smith, vice chair and president, Hossein Nowbar, corporate vice president and chief legal officer wrote in a Sept. 7, 2023 blog updated early this year.

Related:Microsoft Azure Gets IBM's Apptio Product Portfolio

Microsoft now is extending those protections to include reseller partners, “both as partners and in support of their end customers,” Dezen noted on Nov. 12. 

“This means that our resellers can assure their customers that they will receive the same CCC protections as customers who purchase qualifying Copilot offerings directly from Microsoft,” Dezen added.

Microsoft partners will see their reseller agreements updated over the next several months to include the copyright commitment protection. Redmond also is simplifying the process for submitting and managing any copyright-infringement claims. Look for those details to come as well, according to Dezen.

Are All the Changes Rosy for Microsoft Partners?

Yet, as tends to happen with Microsoft, there are some changes on the horizon that might not sit so well with partners or their customers. 

For example, on Jan. 1, Dezen said “a small percentage” of cloud enterprise agreements in direct markets won’t be eligible for renewal under the existing framework. Those users will have to move to the Microsoft Customer Agreement for Enterprise, which Dezen called the “digital evolution” of the traditional enterprise agreement. 

Related:Microsoft Cloud Revenue Soars as Hyperscalers See AI Boost

That, she said, will provide “the optimal, streamlined solution” — to what problem, though, was not clear. The blog did not give Microsoft partners any details about why these policies are changing. We have reached out for more explanation.

Meanwhile, small, medium and corporate customers should opt for the Cloud Service Provider or MCA-E contracts, Dezen said. 

“Customers seeking a value-added services and support experience through a partner should choose CSP,” she explained. “Customers seeking a direct purchasing relationship with Microsoft or who prefer to manage their own per-user purchases should select MCA-E.” 

In either case, Dezen said, with Microsoft partners “leading the way, customers can navigate these changes with confidence, knowing they are fully supported in their path to growth."

Microsoft Partners Working with Enterprises, Public Sector Will See Updates 

Along those lines, expect some changes to incentives for Microsoft partners working with enterprises. 

“Partners play a very strategic role with our enterprise customers beyond the transaction of enterprise agreements,” Dezen said. “For partners to meet customers’ evolving needs in the era of AI, the focus must shift to a customer-centric approach with value-added services that enable customer growth and success.”

As such, she said, partners will continue to earn incentives when overseeing enterprise renewals and upselling. They further can “earn additional incentives through other outcome-based opportunities for strategic customer scenarios.”

Again, Microsoft gave no details and we have asked for more information.

Up next, Dezen said MIcrosoft partners soon will be enabled to serve public sector buyers — meaning, the company is changing its maximum resale price formula. That formula will be unveiled some time this month (likely during next week’s Ignite event). We’ve requested more insight in the meantime.

Higher Prices for Monthly Billing, More, in Store

Finally, Dezen said Microsoft is giving customers more “payment flexibility.” And yet, that comes at a cost. On Dec. 1, Microsoft partners may offer a new monthly billing plan option for annual subscriptions for 365 Copilot, 365 Copilot for Sales and 365 Copilot for Services. The caveat? Pricing will run 5% higher than upfront subscriptions. 

It looks as though more price increases are in store, too.

“We will standardize the billing structure by introducing a pricing update starting on April 1, 2025, for all other products with per-user monthly billing plans for annual subscriptions across all new commerce purchasing motions — direct online, through CSP or MCA-E,” Dezen said. “This price update will apply to all new and renewing monthly billing plans for annual subscriptions.”

What’s Driving Incentive, Pricing Changes for Microsoft Partners

Dezen attributes all of the activity to demand for AI, the craze Microsoft kicked off in early 2023 with its $10 billion investment in OpenAI.

“The magnitude of innovation in this era of AI is transforming organizations of all sizes,” Dezen said. 

Along the way, Microsoft partners are “key to driving exceptional outcomes across the customer journey, not just through a transaction, but with their value-added services and solutions that make those purchases come to life and create real business impact,” she said.

Overall, Dezen noted, “While technologies, buying paths and customer opportunities evolve, what remains true is the power of partnership. Our shared objective remains constant — enhancing the customer experience while delivering sustained value throughout the entire customer journey.”