Future-Proof Partner Earnings: Key Microsoft FY26 MCI Changes

Microsoft is unwavering in its mission to empower every person and organization, and partners are undeniably essential in accelerating global digital transformation. To reward this vital ecosystem and help partners meet evolving customer needs, Microsoft continuously refines its incentive programs. The upcoming Fiscal Year 2026 (FY26), effective July 1, 2025, brings significant updates to the Microsoft Commerce Incentives (MCI) program. These changes are part of a multi-stage journey towards simplification, aiming to make it easier for partners to collaborate with Microsoft and maximize their earning opportunities.

This blog post will delve into the key changes, helping you understand how to best leverage MCI Microsoft in the new fiscal year.

The Drive Towards Simplification in MCI FY26

A core theme for MCI Microsoft FY26 is simplification, streamlining the partner experience and making incentive participation more transparent.

Firstly, Microsoft has consolidated and updated the terms and conditions that govern all investments in the guide into a central, external document. This move aims to reduce redundancies within the guide itself, converting the former terms and conditions section into "Additional Terms and Glossary". This means a more streamlined set of rules for partners to navigate.

Secondly, a significant simplification comes in the Proof of Execution (POE) requirements for pre-sales engagements. For FY26, Security, Azure, and Business Applications pre-sales engagements will generally require only three components: a customer survey, a partner survey, and a partner invoice. For Azure post-sales engagements, partners now only need to provide Azure Pricing Calculator output and Azure Subscription IDs in the POE template for monitoring. This simplification aims to align with partner delivery flexibility, easing the administrative burden.

Finally, Microsoft Commerce Incentives is expanding to include more earning opportunities, creating a single, consolidated incentive platform for partners. New additions include Azure Innovate, Modern Work & Security usage incentives, and Biz Apps Presales Advisor incentives engagements, all designed to enable partners to accelerate and drive customer value through this unified system.

Expanding Earning Opportunities with New and Refreshed Engagements

FY26 brings a refresh to all activity-based engagements. This includes updated opportunities in areas like Azure Migrate & Modernize, Copilot Accelerate, Security engagements, Business Applications Partner Activities, and Biz Apps Presales Advisor.

Beyond these refreshes, several new earning opportunities are notable:

New ISV Engagements

The guide introduces specific incentives tailored for Independent Software Vendors (ISVs). These include:

ISV Success Advanced: Build & Publish Designed to accelerate digital transformation and support ISV partners in designing, piloting, and publishing innovative applications, particularly those leveraging Azure AI.

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  ISV Marketplace Rewards Advanced

  Migration Assessment and POV" and "ISV Marketplace Rewards Advanced: Customer Migrate & Modernize" – These help ISVs securely and efficiently transition existing end-customers to modern SaaS applications and data platforms, or migrate from competitive platforms. These post-sales engagements require ISV partners to report PRACR (Partner Reported Azure Consumed Revenue) for one year after delivery.

  

  

  
  
  
  

  Expansion of Azure Accelerate

  Azure incentives include multiple ways for partners to earn on customer Azure consumption, ranging from pre-sales assessments to post-sales migration and modernization projects, including specialized areas like SAP migration, data platform, AI apps, and virtual desktop infrastructure.

  
  

  

Updated Eligibility and Compliance Requirements for Partners

Understanding the updated eligibility and compliance criteria is crucial for maximizing your earnings with Microsoft MCI incentives.

A significant new requirement is the $25K USD Trailing Twelve-Month (TTM) revenue threshold for CSP Indirect Resellers. This is a mandatory eligibility criterion for CSP indirect resellers to earn M365 and D365 new commerce and legacy CSP incentive engagements. This threshold is assessed monthly, looking back 3's also important to note the retirement of Modern Work usage incentives in FY25.

While compensable incentives for this area have ceased, partners are still encouraged to claim for non-compensable Modern Work usage recognition for Solutions Designations and Specializations.

For Biz Apps Presales Advisor incentives, the High-Water Mark (HWM) principle has shifted. Starting in FY24, the HWM is established at the tenant and workload level rather than the subscription level. This change aims to prevent overpayment in renewal or recurring revenue scenarios by providing a less detailed, higher-grain tracking of growth, making the incentive calculation more precise.

Azure Accelerate Partner Nominated engagements 

Also come with new performance measurements and caps. Partners are now required to maintain a 3:1 ratio of pre-sales to post-sales engagements. Additionally, they must meet Azure Consumed Revenue (ACR) targets in over 60% of individually measured claims. Partner earnings from these engagements are also capped at $3 million. Partners should only nominate net new engagements that have not yet started and each engagement submitted must be unique with its own scope of Azure consumption; multiple engagement types should not be nominated together for the same opportunity.

Compliance is paramount. A stricter subcontracting policy has been put in place, strictly prohibiting the subcontracting of any engagement or workshop activities to third parties. All claimed activities must be executed directly by the eligible partner to qualify for approval and payment. Furthermore, a new Customer-Partner Geographic Claiming Policy mandates that the claiming partner's location must match the customer's headquarters area or market rate. Non-compliant claims may result in cancellation or pausing from Microsoft Commerce Incentives. For example, a partner in a Market A country (e.g., Australia) cannot claim a customer in a Market B or C country (e.g., Vietnam).

Enhancing Partner Experience with Automated Referral Management

To foster tighter collaboration and improve the partner experience, Microsoft is introducing Automated Referral Management. Select MCI Microsoft claims now automatically generate standard Partner Center referrals when specific conditions are met. This process serves multiple benefits:

• Ensures notification: Microsoft account teams are automatically alerted to partner engagements, fostering better alignment.

• Streamlined Co-selling: The system manages referral status, supporting co-sell configurations and notifying relevant Microsoft teams when partners engage with customers. This aims to align Microsoft sales teams with partner-led activities and automate joint engagement.

• Automated Status Updates: Referral status automatically updates to "Won" or "Lost" based on Proof of Execution (POE) completion status, providing clear progression insights.

This new feature ensures that partners' qualified deals are effectively communicated within Microsoft, facilitating joint opportunities and improved partner experience.

Maximizing Your Earning Potential in the New Incentive Landscape

These changes to Microsoft Commerce Incentives for FY26 underscore Microsoft's commitment to simplifying partner experiences, enhancing collaboration, and driving digital transformation globally. The consolidated terms, simplified POE, expanded earning opportunities, and updated compliance requirements are all designed to empower partners to achieve more.