Microsoft Multiparty Private Offers Now Available via Cloud Marketplace

Microsoft is making it easier for different types of partners to come together and collaborate on deals by now enabling multiparty private offers (MPOs). The new MPO program became generally available this week.

The MPO program, which Microsoft emphasized during this week’s annual Inspire partner conference, seeks to enable ISVs to bring selling partners such as systems integrators (SIs), VARs and MSPs into deals, and vice versa. Currently, the program is only available to partners enrolled in the Microsoft Cloud Partner Program with seller IDs in the U.S. However, Microsoft plans to launch it in Canada and the U.K. within the next few months.

Microsoft’s Julie Sandford at Inspire 2023.

“This is all about supporting our partners to work together and to enable them to work on custom deals and execute those through the marketplace,” Microsoft’s VP for partner GTM, programs and operations, Julie Sanford, told Channel Futures.

Microsoft’s commercial marketplace is core to providing partner growth because it can scale to bring solutions to market faster, Sanford emphasized during one of several sessions focused on MPOs at Inspire.

According to Sanford, sales through Microsoft’s commercial marketplace have grown by 138% over the past year.

“We’re seeing incredible growth,” she said. “Eight and nine-figure deals are becoming the norm.”

Customers Shifting to Marketplaces

Over 85% of Microsoft’s enterprise customers with Azure usage commitments actively buy solutions through the commercial marketplace to utilize their cloud spend, according to Sanford, noting that Microsoft automatically counts 100% of their purchases from the Azure Marketplace to their commitments.

“It’s a growing budget that customers have already committed,” Sanford said. “And as customers are using the marketplace to manage their entire cloud estate, deals are growing.”

During the past year, average deal sizes grew by 120%,” she said.

Microsoft director of commercial marketplace Jason Rook cited a Canalys forecast that software sold through cloud marketplaces is growing at an 84% CAGR and is expected to top $45 billion by 2025, with one-third of that expected to go through partners.

Microsoft’s Jason Rook at Inspire 2023.

“It’s a tremendous opportunity and a great time for you to get engaged with marketplace,” Rook said. “Customer momentum toward modern procurement is so strong: Customers want that simplified, highly secure, easy-to-govern transaction model. ISVs and selling partners like you love simplified transactions; everybody’s looking for the faster deal cycles that come with marketplace transactions.”

Expanding Co-sell Benefits

Sanford noted that Microsoft recently said publishing an offer on its commercial marketplace will entitle partners to co-sell benefits. Azure co-sell revenue from partners selling their IP grew 214% last year, she noted.

The new MPO program promises to accelerate co-selling across the spectrum. Microsoft commercial marketplace VP Jake Swenson told Microsoft Inspire attendees that multiparty private offers let any set of partners sell together.

Microsoft’s Jake Swenson at Inspire 2023.

“Lots of customers lean on partners to manage their entire cloud portfolio,” Swenson said. “With multiparty private offers, selling partners can differentiate and bring a SaaS solution into a deal while simplifying the sale and reducing overhead. And for our ISVs, this opens a whole new channel to reach customers, and they’re committed to cloud spend. With private offers and flexible deal-making features, you have the tools to reach customers to unlock budgets and fuel your growth.”

MPO Preview with Dynatrace and Trace3

ISV partner Dynatrace, which this week expanded its go-to-market partnership with Microsoft, and its systems integrator partner Trace3, told Inspire attendees that they just completed the private preview of Microsoft’s MPO program. Trace3 senior cloud partner manager Shalene Careau said multiparty private offers enable the system integrator to make it easier for its clients to procure software services.

“Before the private preview, SIs were limited by what we can transact through the marketplace,” Careau said. “Multiparty private offers provide us with an incredible opportunity to expand our reach and open our business to new clients.”

According to Careau, its clients increasingly prefer to push portions of their cloud spend through the cloud marketplace to fulfill their commitments.

“This is a meaningful benefit for Azure customers,” she said. “And we’re working on publishing our own offerings, as well as working with emerging partners to finalize solutions to co-sell on the marketplace.”

Dynatrace’s Microsoft alliance manager, Ayla Anderson, said nearly all of its customers have Azure spend commits, and MPO should help them maximize that spend. Further, Anderson said MPO provides a unified experience for customers while allowing them to streamline purchasing.

“I think in today’s economy, aligning with partners, both SIs like Trace3, and cloud partners like Microsoft, is more important than ever.”