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A seismic shift is reshaping enterprise software procurement: By 2027, channel partners will facilitate at least half of all cloud marketplace transactions, according to Canalys. This prediction would hardly surprise Microsoft veterans.
Since its earliest days, Microsoft has understood that sustainable growth comes through partner ecosystems. This partner-first philosophy helped transform Microsoft from a small software company into a global technology leader, where partners directly or in collaboration influence over 95% of the company’s commercial revenue.
Today, as organizations increasingly commit to cloud spending through Microsoft Azure Consumption Commitments (MACC), Multiparty Private Offers (MPOs) emerge as the natural evolution of this partner-first philosophy. MPOs on the Azure Marketplace enable ISVs and channel partners to collaborate on customized enterprise deals while maintaining the simplicity of marketplace procurement.
Understanding MPOs: Modern channel sales on Azure Marketplace
MPOs enable eligible partners to create personalized deals with custom payouts and sell directly to Microsoft customers through the marketplace. This evolution marks a significant shift from traditional channel sales - instead of managing complex reseller agreements and separate procurement processes, partners now collaborate within Azure Marketplace's unified framework. The process starts with ISVs, who create and configure the offer, setting base pricing and terms. Channel partners then customize these offers for specific customers, adding their services and expertise before extending the final proposal.
This marketplace-led delivery model fundamentally changes the game for both ISVs and channel partners in two critical ways:
First, it makes channel partnerships more 'elastic' - enabling quick deployment and seamless integration with customers' existing cloud infrastructure. Gone are the days of lengthy procurement cycles and complex integration projects. When an MPO is accepted, software deployment happens directly through the Azure Marketplace, integrated with the customer's cloud environment.
Second, MPOs directly address a pressing customer need: cloud cost optimization. According to CloudZero's 2024 State of Cloud Cost Report, 51% of businesses believe their cloud costs are higher than optimal. By enabling purchases to count toward Microsoft Azure Consumption Commitments (MACC), MPOs offer a compelling advantage over traditional procurement methods. Channel partners can position this benefit to strengthen their value proposition, while ISVs benefit from faster deal closures.
How to create MPOs on the Azure Marketplace
The creation of an MPO follows a structured workflow that ensures transparency and control for all parties involved. While ISVs initiate and own the offer creation process, successful execution requires careful attention to eligibility requirements, offer configuration, and stakeholder management. Understanding these elements and their relationships is crucial for maximizing the value of MPOs in your channel strategy.
Step 1: Meet eligibility requirements for MPO creation
Before initiating an MPO, ISVs must ensure they meet Microsoft's foundational requirements for marketplace transactions. The offer you plan to sell through an MPO must already exist as a published, transactable listing on the marketplace - this ensures that all basic commercial and technical validations are complete before entering private negotiations.
Key eligibility criteria include:
- Access control requirements: Only users with marketplace developer, manager, or account owner roles can create MPOs
- Geographic limitations: Currently available in the United States, United Kingdom, and Canada
- Partner requirements: Channel partners must maintain completed tax profiles in either the US or UK
Note: ISVs wishing to transact through MPOs should be actively enrolled in the Microsoft AI Cloud Partner Program and should maintain a commercial marketplace account in Partner Center.
Step 2: Understand eligible offer types for MPOs
Microsoft has designed MPOs to work with specific types of transactable marketplace offerings, ensuring these private deals maintain the same robust infrastructure as public marketplace transactions. This standardization helps maintain consistency in deployment, billing, and support processes across both public and private offers.MPOs currently support four primary offer types:
- Software as a Service (SaaS): Complete software solutions available on a subscription basis
- Azure Virtual Machines: Software licenses for deploying your applications on Azure VMs, including both bring-your-own-license and pay-as-you-go options
- Azure Applications: Complex solutions that can span multiple Azure services
- Azure Containers: Containerized applications for flexible deployment
Important limitations to note: Professional services cannot be bundled into software offers, and hardware costs must remain separate from software pricing. Additionally, products listed on AppSource are not eligible for private offers. While channel partners have flexibility in adjusting software charges within the MPO, they cannot modify underlying Azure infrastructure costs.
Step 3: Configure and launch your MPO
The actual creation of an MPO involves careful configuration of various elements - from basic offer details to pricing structures and stakeholder management. The process begins with gathering essential information: your channel partner's seller ID and your customer's billing account ID. These identifiers ensure the offer reaches the right stakeholders while maintaining the security and specificity of your private offer.
Key configuration elements include:
- Offer structure: Choose between customizing public plans, SaaS-specific plans, or VM software reservation offers
- Plan and pricing: Configure either existing public plans with custom partner pricing or create new customized plans. For public plans, you can set absolute prices or percentage discounts (up to 10 offers/plans per MPO)
- Stakeholder details: Configure customer billing information and channel partner specifics
- Timing parameters: Set offer validity periods and customer acceptance deadlines
- Custom terms: Upload relevant terms and conditions (up to 5 attachments permitted)
- Notification setup: Add up to 5 email contacts for status updates
When configuring partner pricing, you have two options to structure reseller margins. You can either set an absolute price for your partner (overriding the public listing price) or specify a percentage discount off the list price. With absolute pricing, you directly control the partner's cost basis, while percentage discounts automatically adjust with any changes to your public pricing. Partners can then add their markup when extending the offer to customers, giving them flexibility in their go-to-market strategy while maintaining your control over the base pricing.
Important process notes: Once submitted, the MPO locks for edits but remains withdrawable while pending partner action. Your channel partner receives access within 15 minutes, after which they can customize and extend the offer to the customer. While Microsoft handles the underlying marketplace infrastructure, communication with partners and customers remains your responsibility.
While creating an MPO establishes the foundation for channel partnerships on the Azure Marketplace, long-term success depends on effectively managing these offers throughout their lifecycle. Understanding how to handle renewals, upgrades, and offer management is crucial for maintaining healthy, growing channel relationships.
Managing MPOs through Partner Center: Understanding the challenges
The long-term success of channel partnerships often depends on effectively managing renewals and upgrades through MPOs. Microsoft streamlines this process by offering specific pathways for both scenarios, each designed to maintain continuity in partner relationships while ensuring proper governance of marketplace transactions.
Renewal benefits on private offers with Microsoft
Microsoft actively encourages the renewal of existing MPOs by offering a 50% reduction in marketplace fees for renewal transactions. This significant cost advantage makes MPOs particularly attractive for maintaining long-term customer relationships through channel partners.
Upgrading MPOs
MPO upgrades provide a structured way to modify existing offers while maintaining core product integrity. Upgrades are only available for MPOs in 'accepted' or 'ended' state and must align with renewal timing - no overlap is permitted between existing and upgraded offer dates.
Through the upgrade process, ISVs can modify partner pricing, customer offer dates, terms and conditions, notification contacts, and sales notes. Similarly, channel partners have the flexibility to adjust their customer pricing percentages, contact information, terms and conditions, and notification preferences. However, core elements like product plans or product terms cannot be modified through upgrades - such changes require creating a new MPO entirely.
Additional offer management options for greater control
Microsoft provides several tools to efficiently manage MPOs throughout their lifecycle:Cloning Capabilities: To streamline the creation of similar offers, you can clone existing MPOs and modify specific elements such as customer details, partner information, or pricing structures. This feature is particularly useful when scaling successful offer structures across multiple partners or customers.
- Cloning capabilities: To streamline the creation of similar offers, you can clone existing MPOs and modify specific elements such as customer details, partner information, or pricing structures. This feature is particularly useful when scaling successful offer structures across multiple partners or customers.
- Offer withdrawal: ISVs maintain control over their offers through a structured withdrawal process. However, this option is only available while the offer is in 'Pending partner action' status - once an offer moves to 'Pending acceptance' or 'Accepted' states, it cannot be withdrawn. This ensures stability in active negotiations and accepted deals.
- Draft management: For offers still in development, ISVs can delete draft MPOs that are no longer needed. This helps maintain a clean, organized view of active and potential offers in the Partner Center dashboard.
Note on statutory offer lock-in: If changes beyond standard upgrade parameters are required, such as modifications to product plans or core product terms, ISVs must create an entirely new MPO rather than pursuing an upgrade path.
The various lifecycle management options available through MPOs provide powerful flexibility for channel partnerships. However, executing these capabilities through Partner Center introduces operational complexities that organizations need to navigate effectively.
Creating MPOs with Clazar: Streamlining channel sales
Clazar transforms the MPO creation process by enabling sales teams to work directly from their familiar CRM environments. Instead of navigating between multiple platforms, teams can create and manage MPOs through a simplified interface that automatically handles the complexity of Partner Center interactions.
Through this streamlined approach, Clazar eliminates the need for manual updates and cross-platform navigation, allowing sales teams to focus on what matters most - building and maintaining successful channel partnerships.
The future of channel partnerships: MPOs as the bridge to marketplace success
MPOs are particularly powerful in the context of the changes we see in enterprise software sales. Consider Nerdio, winner of the 2024 Microsoft Partner of the Year Award for Commercial Marketplace. Their approach is 'marketplace-delivered but channel-first' - meaning while they transact through the Azure Marketplace, they primarily focus on reseller and channel-focused deals via MPOs. This strategy has proven successful because:
- It enables scale through an extensive distribution ecosystem built on reseller and channel advocate relationships
- It leverages their Azure-specific solution expertise through trusted partner networks
The beauty of MPOs lies in their ability to preserve traditional channel dynamics while modernizing the transaction process. ISVs can continue working with partners who have deep customer relationships and market expertise while gaining the efficiency and transparency of marketplace transactions. Channel partners maintain their crucial role in the sales process, accessing strategic buyers within key accounts and often growing contract values through their industry expertise.
But all of it only pays off when your sellers are enabled to move with agility, without needing to spend hours training themselves on a new tool or sales medium and moving beyond traditional management approaches.
Modern tools like Clazar are essential for scaling channel operations efficiently. By enabling MPO creation directly from familiar CRM environments, automating cross-platform synchronization, and providing unified visibility into channel revenue metrics, Clazar helps businesses focus on growing partnerships rather than managing marketplace complexity.
As organizations increasingly embrace marketplace-led delivery models, those who can successfully combine the efficiency of MPOs with the power of channel relationships will be best positioned for sustained growth in the cloud era.
