top of page

Maximize Your Growth in FY25: A Deep Dive into Microsoft ISV Programs

Writer's picture: ALIF ConsultingALIF Consulting

Updated: Jan 30

Are you an Independent Software Vendor (ISV) looking to accelerate your growth and expand your reach? Microsoft is heavily invested in its ISV partners, offering a range of programs and incentives designed to help you succeed in today's competitive market. These programs provide not only financial incentives but also crucial resources for development, publishing, and go-to-market strategies. This blog post will provide a comprehensive overview of Microsoft’s FY25 ISV incentive programs, highlighting key resources and changes, ensuring that you are equipped with the knowledge to make the most of these opportunities.


Key takeaways 

  • Microsoft is heavily investing in ISV partners through various incentive programs in FY25, focusing on Azure consumption, the commercial marketplace, and digital transformation.

  • The ISV ACR Growth Campaign rewards partners for driving Azure consumption via SaaS and IaaS/PaaS solutions, with incentives based on quarter-over-quarter (QoQ) growth. The maximum earning potential is $500,000.

  • The Marketplace Transact and Grow Campaign incentivizes sales of transactable offers on the Microsoft commercial marketplace, with payouts at $100,000 and $4,000,000 in cumulative sales.

  • Azure Innovate and Azure Migrate and Modernize offers provide funding for building new AI apps and migrating/modernizing existing solutions, respectively.

  • The ISV Success Program offers resources, including AI services, consultations, and developer tools, to help partners build and publish apps faster.

  • Partners must enroll in the Campaigns program in the Partner Center to receive payments for the incentive programs.

  • Eligibility is assessed quarterly, and partners are invited to participate once requirements are met.

  • Both programs offer different incentive amounts based on whether the partner is in Market A or Market B countries.

  • AI-verified apps automatically get access to the ISV Success expanded package.



Table of Contents


Understanding the FY25 ISV Incentive Portfolio

Microsoft is dedicated to supporting ISVs throughout their entire solution development lifecycle. This commitment is reflected in a broad range of initiatives focused on key areas such as Azure consumption growth, the Microsoft commercial marketplace, and the acceleration of customer digital transformation and migration to Azure. Microsoft provides significant investment across the “build,” “publish,” and “sell & grow” phases, helping ISVs to develop innovative solutions on the Microsoft Cloud, publish them to the marketplace, and grow sales.


FY25 ISV incentives


ISV ACR Growth Incentive Campaign

The ISV ACR Growth Incentive Campaign is designed to reward ISVs for driving the consumption of Microsoft Azure services through their software solutions. This campaign encourages ISVs to invest their cash earnings back into go-to-market and demand-generation activities. The incentive structure has three key levers:



Core Incentive

Partners can earn 10% on quarter-over-quarter (QoQ) growth of eligible Azure Consumed Revenue (ACR), with a maximum cap of $100,000 USD in each half of the fiscal year (H1 & H2). To be eligible, an ISV partner must have at least $100k USD in eligible ACR and less than $20M USD in eligible ACR in the previous fiscal year.


Azure IP Co-sell Incentive

Similar to the Core Incentive, partners can earn 10% on the QoQ growth of eligible ACR, with the same maximum cap of $100,000 USD per half of the fiscal year. This lever requires the partner to have at least one Azure IP Co-sell Eligible Solution and less than $20M USD in eligible ACR in the previous fiscal year.


Strategic Workload Accelerator

Partners can earn a higher incentive of 15% on QoQ growth of eligible strategic workload ACR, capped at $50,000 USD per half of the fiscal year. Eligibility requires a minimum of $200 USD in eligible ACR in the previous fiscal year.


Eligible ACR includes revenue from SaaS solutions built on the partner's own Microsoft Azure subscription, as well as IaaS/PaaS solutions published as Azure Virtual Machines and Azure Apps on the Microsoft commercial marketplaceStrategic workloads that qualify for the accelerator include services such as Specialized Compute, Azure App Service, Azure Kubernetes Service, GitHub, Azure Cosmos DB, and others. It is important to note that enrollment in the Campaigns incentive program in the Partner Center is mandatory for participation.


Marketplace Transact and Grow Incentive Campaign

The Marketplace Transact and Grow Incentive Campaign aims to motivate partners to publish and scale their business through the Microsoft commercial marketplace. This campaign rewards partners for driving sales of their transactable offers. The incentive structure is tiered, based on cumulative marketplace billed sales achieved during the fiscal year:

  • Lever 1: A $20,000 USD reward is granted when a marketplace publisher achieves $100,000 USD in cumulative marketplace billed sales.

  • Lever 2: A $50,000 USD reward is granted when a marketplace publisher achieves $4,000,000 USD in cumulative marketplace billed sales.



These milestones are considered regardless of whether the partner achieved the same milestones in the previous fiscal year. Eligibility is determined at the Publisher ID level, requiring an active Partner Location ID and at least one offer on the Microsoft commercial marketplace. Cumulative billed sales include the total invoiced sales amount from the beginning to the end of the Microsoft fiscal year, calculated across all offers associated with the Publisher ID. Like the ACR Growth Incentive, enrollment in the Campaigns incentive program in the Partner Center is required.


Azure Innovate Partner-led for ISVs

Azure Innovate Partner-led for ISVs is designed to accelerate the design, testing, proof-of-concept (POC), publishing, and deployment of solutions utilizing Azure AI and Analytics services. This program provides cash incentives to partners, aiming to infuse AI into their solutions and advanced analytics capabilities and build custom cloud-native applications.



To participate, partners must have earned a Microsoft Certified Software Designation (Azure, Security, or Industry AI) or have had existing Azure Innovate ISV offer eligibility as of June 30, 2024. The program supports various scenarios, including Cloud Scale Analytics, building and modernizing AI apps, accelerating developer productivity, and innovating with the Azure AI Platform. It is important to note that the partner applying for the benefit is considered the end customer.

The incentive payouts are structured based on the project size (planned Azure consumption in year 1) and are divided into pre-sales and post-sales phases. For example, Proof of Value projects range from standard to extra-large, with payouts ranging from $10,000 to $100,000 for Market A countries and $8,000 to $80,000 for Market B countries. Publish offers vary from extra-small to large, with payouts ranging from $5,000 to $50,000 for Market A and $4,000 to $40,000 for Market B. There are no Azure credits available for these engagements. Partners are expected to document their AI solutions, ensure they pass the AI Fairness Checklist, and illustrate the full solution deployment architecture.


Azure Migrate and Modernize Partner-led for ISVs

The Azure Migrate and Modernize Partner-led for ISVs program provides funding to accelerate customer migrations and ISV application modernization to Azure. This program aims to help ISVs securely and efficiently move existing workloads to Azure while enhancing application and data experiences.

Similar to Azure Innovate, partners must have a Microsoft Certified Software Designation or have had existing Azure Migrate and Modernize ISV offer eligibility as of June 30, 2024. Eligible customers include strategics, majors, and SMC-Corporate, and select SMB customers with a valid TPID are also eligible. The program supports scenarios such as infrastructure and database migrations, virtual desktop infrastructure, and SAP migrations.

Incentives are provided based on planned Azure consumption in the first year. Payouts range from $5,000 to $50,000 for Market A countries and $4,000 to $40,000 for Market B countries, across project sizes from extra-small to large. Partner Reported ACR (PRACR) is a requirement for customer migrations to SaaS offerings, and Microsoft reserves the right to track consumption and may restrict partners who do not meet the minimum ACR requirements. There are no Azure credits available for these engagements.


Leveraging the ISV Success Program

The ISV Success Program offers a structured path for ISVs to build, publish, and grow sales of their applications through the Microsoft commercial marketplace. This program provides a range of technical and business benefits, making it an ideal starting point for ISVs looking to accelerate their growth. During the build and publish phases, partners receive technical benefits like cloud sandboxes, developer tools, 1:1 consultations, and Azure credits (either $5,000 for Core or $25,000 for Expanded packages). Once published, Marketplace Rewards benefits are unlocked based on performance, which includes listing optimization, seller webinars, and up to $400,000 in Azure credits to close deals.

ISV Success provides AI resources such as AI Tech Consults, access to Azure AI Foundry and OpenAI, and limited access to Azure AI features. Developers also benefit from tools including Azure credits, Dynamics 365 Sandbox, GitHub Enterprise Cloud, Visual Studio Enterprise, and Microsoft 365 E5 developer. The program offers different benefit packages, including the Core Package, Expanded Package, and Advanced Package, each offering a combination of resources, support, and Azure credits, with an annual fee for the expanded package. ISVs publishing transactable offers in the commercial marketplace also benefit from sales and marketing support, such as listing optimization, social promotion, and Azure Sponsorship. Eligibility requires building B2B applications on the Microsoft Cloud and publishing to the commercial marketplace.


Key Changes in FY25

Several key changes have been introduced in the FY25 programs:

  • ISV ACR Growth Campaign: The maximum earning opportunity has increased from $350,000 USD to $500,000 USD. Eligibility has been broadened to include all ISV partners recorded in Microsoft’s system, regardless of Azure IP Co-sell status.

  • Marketplace Transact and Grow Campaign: The measurement of billed sales has shifted to the publisher ID level rather than the offer level. Eligibility is no longer dependent on the previous fiscal year’s marketplace billed sales.

  • Azure Innovate and Migrate & Modernize Offers: Expanded eligibility to include partners with a Microsoft Certified Software Designation. Additionally, a new scenario, “Innovate with Azure AI Platform,” has been added to the Azure Innovate program.



Partner Expectations and Requirements

To successfully participate in these programs, ISVs must meet several key requirements:

  • Maintain an active Microsoft Cloud Partner Program membership and agreement.

  • Provide valid identification, tax, and banking information.

  • Ensure alignment with customers before submitting requests to the MCI Portal.

  • Avoid using funding for the same project across multiple sources.

  • Report Partner Reported ACR (PRACR) for customer migrations to SaaS solutions.


Enrollment and Payment Timelines

Eligibility for the incentive programs is assessed quarterly. Eligible partners will receive an invitation to enroll in the Campaigns Program within the Partner Center. It is crucial for partners to enroll by the specified quarterly deadlines to receive payments. Payments are made quarterly. The specific timelines for eligibility checks, enrollment deadlines, and payment periods are provided in the source documents and should be carefully reviewed.


Conclusion

Microsoft's FY25 ISV programs offer unparalleled opportunities for ISVs to grow their businesses, accelerate innovation, and expand their reach. By taking advantage of the financial incentives, technical resources, and go-to-market support provided, ISVs can achieve significant success. These programs emphasize the strategic priorities of Azure, the Microsoft commercial marketplace, and digital transformation, aligning partner success with Microsoft's broader goals. Don't miss out on these opportunities. Start your journey today by exploring these programs and enrolling in the Microsoft AI Cloud Partner Program.

Comments


bottom of page