Microsoft Azure has become a cornerstone for businesses seeking scalable, secure, and innovative cloud solutions. The Microsoft partner ecosystem plays a vital role in driving this adoption, empowering businesses with the expertise and support needed to thrive in the cloud. This blog post is designed to provide a comprehensive overview of the earning opportunities available for Microsoft Azure partners in FY25, ensuring you are well-equipped to maximize your potential. We'll delve into the various incentive programs, explore key focus areas, and provide actionable insights to help you succeed.
Key Takeaways
Migration and modernization incentives are significant: The Azure Migrate and Modernize program offers substantial incentives, encouraging partners to drive customer migrations to Azure.
AI and innovation are key focus areas: Microsoft is heavily investing in AI, providing lucrative incentives for partners who develop and deploy AI-driven solutions through Azure Innovate.
CSPs have great potential for increased earnings: Microsoft CSPs can stack incentives for up to 26% earnings, particularly by adding new customers and leveraging workload and AI accelerators.
Hosting provides a unique opportunity through the SPLA program, with incentives for core hosting and SQL products.
Customer skilling and FastTrack for Azure are optional for some offers.
There are no Azure credits available for these engagements.
Incentives are generally targeted toward Majors, SMC-Corporate and select SMB customers, with Strategic accounts not eligible.
Table of Contents
Key Priorities for Microsoft Azure Partners in FY25
For FY25, Microsoft has outlined several key priorities under the Microsoft Cloud and AI Partner Solutions (MCAPS) framework, offering substantial earning potential for partners. These priorities include:
Copilots on every device across every role
This emphasizes the integration of AI-powered copilots into daily workflows, making AI accessible and practical for every user. Partners should focus on solutions that seamlessly integrate these copilots into various applications and roles.
AI design wins with every customer
The focus here is on implementing successful AI solutions that drive tangible results for customers. Partners are encouraged to showcase their expertise in designing and deploying innovative AI applications.
Securing the cyber foundation of every customer
Cybersecurity remains a top concern. Partners must prioritize solutions that secure their clients' digital assets and data, building a strong cyber foundation.
M365 core execution
This involves the core Microsoft 365 services, highlighting the continued importance of these products for business operations. Partners should ensure they are offering the best M365 experience to clients.
Migrations, migrations, migrations
A clear directive to accelerate the migration of customers to Azure. This is a major area of focus, providing ample opportunity for partners specializing in migrations.
Microsoft is backing these priorities with significant investments:
10x YoY increased investment: A substantial increase in overall investment.
$150M AI investment: A dedicated investment in AI technologies and solutions.
$90M incremental investment: Additional funding to support growth initiatives.
50% YoY increased investment in AMM: Highlighting the importance of Azure Migrate and Modernize initiatives.
Double-digit incremental investment in SMC shows commitment to the Small, Medium and Corporate market segments.
The Azure Partner Incentive Programs
Microsoft's incentive programs are structured to reward partners for driving Azure consumption and adoption. These programs are built around solution plays, which are strategic areas of focus designed to guide partners in their customer engagements. The solution plays include: Listen & consult, Inspire & design, Empower & achieve, Realize value, and Manage & optimize.
Key incentive programs include
Azure Migrate and Modernize
This program focuses on migrating existing workloads to Azure, providing significant incentives for partners who facilitate this process.
Azure Innovate
This program encourages partners to build and deploy innovative solutions leveraging Azure's AI and cloud capabilities.
Custom Deal Frameworks
Microsoft provides custom deal frameworks for specific scenarios, including AI Envisioning for ISVs led by Advanced Specialization System Integrators (SIs), as well as Azure Sponsorship programs, including AI Hackathons.
Marketplace Transact & Grow
Incentives were designed to help independent software vendors (ISVs) expand their reach and sales.
Deep Dive into Azure Migrate and Modernize Incentives
The Azure Migrate and Modernize program offers a variety of incentives to partners who help customers migrate their workloads to Azure.
Assessment Incentives
Partners can earn up to $5,000 USD per assessment. These assessments help customers understand their existing infrastructure and plan for a smooth migration to Azure.
Deployment Incentives
Deployment incentives vary based on the size of the deployment, ranging from $15,000 to $100,000 USD per deployment.
Azure Migrate and Modernize Deployment XS & Small: Up to $15,000 USD per deployment.
Azure Migrate and Modernize Deployment: Up to $100K USD per deployment.
Specifics for SAP RISE Migrations
Partners migrating SAP workloads to Azure using SAP RISE can also earn significant incentives. Incentive tiers are based on planned Azure consumption and the SAP RISE Annual Contract Value (ACV).
For example, a Migrate & Modernize Large project with >$250K–$500K/year in planned Azure consumption ($750K -$1.5M SAP RISE ACV) can earn a partner $85,000/$80,000.
The maximum earning opportunity for SAP RISE migrations is $115K USD.
Microsoft Defender for Cloud Incentive
Partners who include Microsoft Defender for Cloud in their infrastructure and database migration projects can receive an additional 15% funding. This can increase the maximum payout up to $57.5K.
For example, a Migrate & Modernize Large project with Defender for Cloud can earn a partner $57,500/$46,000.
Supported Scenarios: The program supports the migration of various workloads, including Windows Server & SQL Server, Linux, VMware, Desktop Infrastructure, and SAP to Azure.
There are no limitations in Azure Migrate and Modernize Partner-led for different licensing types.
Partners with repeatable commercial IP can nominate customers for Azure Migrate and Modernize through a self-service workflow.
Azure Innovate Incentives
The Azure Innovate program is designed to incentivize partners to develop cutting-edge solutions leveraging Azure's AI and cloud capabilities.
Proof of Value (POV) Incentives
Partners can earn up to $8,000 USD per standard Proof of Value (POV) engagement.
There is also a new AI Envisioning + POV for ISVs, which offers $15,000/$12,000 for projects >$25K/year.
For larger projects, there are additional incentives: $50,000/$40,000 for projects >$500K/year and $100,000/$80,000 for projects >$1M/year.
Deployment Incentives
Partners can earn up to $50,000 USD per deployment.
For example, an Innovate Large project with >$250K–$500K/year in planned Azure consumption can earn a partner $50,000/$40,000.
The maximum earning opportunity for stacking pre and post-sales is $65K.
For ISVs the maximum earning opportunity is $150K USD for stacking Pre & Post Sales.
ISV Self-Nomination for Azure Innovate: Qualified partners can now directly nominate themselves for Azure Innovate through a self-service workflow, speeding up time to market.
Supported Scenarios: The program supports building and modernizing AI apps, Azure analytics, innovating with the Azure AI Platform and accelerating developer productivity.
There are no limitations in Azure Innovate Partner-led for different licensing types.
Earning Potential for Cloud Solution Providers (CSPs)
Microsoft Cloud Solution Providers (CSPs) play a crucial role in delivering Azure services to customers. Microsoft has designed a robust incentive structure to reward Microsoft CSP partners for their efforts.
CSP Incentive Stacking: Microsoft cloud partners can stack various incentives to maximize their earning potential.
The basic incentive is 4% of Azure consumption revenue (ACR).
CSP Customer Add: Partners can earn an additional 15% of ACR for adding new customers.
Provisioned throughput Units (PTU), Azure Reserved Instance (RI) and Savings Plan (SP): An additional 10% of ACR for these.
Workload and AI Accelerators
These offer additional incentives for specific workloads and AI services.
Workload Accelerator
Earn an additional 3% for specialized compute, Azure App Service, Azure Container Apps, Azure Kubernetes, GitHub, Azure Cosmos DB, Azure Database for MySQL, Azure Database for PostgreSQL, Microsoft Defender for Cloud and Sentinel.
AI Accelerator
Earn an additional 7% for Azure Applied AI Services, Azure Cognitive Search (Incl. AI Search), Azure Databricks, Cognitive Services (Incl. AOAI) and Microsoft Fabric.
These incentives can result in up to 26% incentive earning potential on associated ACR.
Maximum Earning Opportunity
For CSPs, the maximum earning opportunity varies, but they can earn up to $80K USD on the Azure CSP core motion and Azure RI & SP, $25K USD on Workload accelerator, $25K on AI Accelerator and $250K USD on Azure customer adds.
The Microsoft Hosting Incentive: A Unique Opportunity
The Microsoft Hosting Incentive is designed to promote deeper market penetration of the Microsoft platform through third-party hosting scenarios, specifically via the Services Provider License Agreement (SPLA).
SPLA and Third-Party Hosting: This incentive promotes the deployment of Microsoft solutions through hosting partners utilizing the SPLA offering.
Incentive Structure for Hosting Partners
Hosting: Core
4% incentive, split 50% indirect rebate and 50% co-op. This excludes revenue from Remote Desktop Services (RDS), Microsoft Hosted Exchange, Microsoft Office (plus Microsoft Office Standalone products), and High Volume Services (HVS).
Hosting: SQL Product Accelerator
4% incentive with 100% indirect rebate. SQL Product Families include SQL Server Standard, SQL Server Web, SQL Server Enterprise Core, and SQL Server Standard Core.
Partner Eligibility
Partners must have an active Microsoft Cloud AI Partner Program membership, valid identification, tax and banking information, and a Microsoft Services Provider Licensing Agreement (SPLA). They must also have a Partner Location ID in the same location as the PCN on or before August 31, 2024. Partners must also have one of four Solutions Partner designations or legacy competencies.
Performance Threshold
Partners must meet a performance threshold of SPLA revenue measured from January 1, 2023 – December 31, 2023: USD 2.0 million for mature markets; USD 1.0 million for emerging markets.
Exclusions: Hyperscale Service Providers are not eligible for this incentive.
Conclusion
The opportunities for Microsoft Azure partners in FY25 are vast and varied. By leveraging the incentive programs and focusing on key priorities, partners can achieve significant earnings and drive substantial growth. Whether you are a system integrator, an independent software vendor, or a Microsoft cloud solution provider, understanding these opportunities will be crucial for success.
Now is the time to take action! We have a dedicated Alliance team that assists Microsoft Azure Partners in maximizing their incentives from Microsoft. Learn more by visiting the Microsoft Alliance.
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