'We wanted to make sure that it's very clear to our partners that we're making clear bets with them to help them deliver on customer expectations,' says Microsoft Chief Partner Officer Nicole Dezen.
A "small percentage" of Microsoft direct market cloud Enterprise Agreements that won't be eligible for renewal under the tech giant's EA framework--potentially opening an opportunity for Cloud Solution Provider partner program members--plus an upcoming monthly billing plan for certain subscriptions of its Copilot artificial intelligence products are part of a slate of changes Microsoft revealed this week ahead of its annual Ignite conference.
The EA change means that affected enterprise customers will have to move to the Microsoft Customer Agreement for Enterprise (MCA-E) for direct purchases or to the Cloud Solution Provider (CSP) program, Nicole Dezen, the vendor's chief partner officer and corporate vice president of Global Partner Solutions, told CRN in an interview.
To help solution providers meet rising small and midsize customer (SMC) demand, Microsoft instituted incentives in fiscal year 2025 for partners serving these customers.
"We wanted to make sure that it's very clear to our partners that we're making clear bets with them to help them deliver on customer expectations," Dezen said when asked about the EA change. "This year, we boosted 70 percent of our total partner incentives into SMC demand. And so I think this is a very, very clear action and call to action to our partners that we want them to have all of the support they need from Microsoft in order to be able to deliver on these customer needs."
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The Redmond, Wash.-based tech giant detailed some of the changes in a Tuesday blog post on licensing and billing changes. The post came a week ahead of Microsoft's annual Ignite customer conference happening in Chicago and online Nov. 19 to 22. This year's Ignite will also feature content aimed at Microsoft's 400,000-plus member partner ecosystem.
Other changes unveiled in the blog post include an upcoming new maximum resale price (MRP) formula aimed at helping partners sell to public sector customers, a new promotion for E5 licenses and an expanded Copilot Copyright Commitment.
The tech giant puts the fiscal year 2025 total addressable market for the SMC segment, much of which use solution providers, at $661 billion. About $467 billion of that--71 percent--is in cloud solutions.
The SMC total addressable market is expected to have a compound annual growth rate of 15 percent over the next four years for companies with fewer than 3,000 employees, according to Microsoft. The compound annual growth rate is 20 percent for cloud.
In July, Microsoft said its fiscal year 2025 partner investment plans include more than $150 million in presales and post-sales investments for its Azure Innovate offering, an incremental $90 million "to accelerate security growth" with partners and a tenfold increase to its Copilot partner investment.
Microsoft plans to start notifying customers that can't renew EAs in January, the vendor said Tuesday.
The vendor bills its MCA-E as the digital evolution of traditional EAs and better suited for customers that want to buy licenses directly from Microsoft or manage per-user purchases. But some smaller EA users will likely look to the Microsoft CSP partner program, which has more than 90,000 members, according to the vendor.
Dezen said that customers that buy licenses directly from the vendor can still use solution providers.
"For customers that want a partner to manage the entire life cycle of their solutions, offer value-added services and support--particularly in the SMC business--we believe that CSP is a great choice for those customers," she said. "Our CSP partners are the hero motion for our SMC business."
Partners can still get incentives when transacting EA renewals and upselling customers, according to Microsoft. They can also receive incentives through outcome-based opportunities.
On Dec. 1, Microsoft will add a monthly billing plan for certain annual Copilot subscriptions, according to the vendor. The plan will cost 5 percent more than annual billing with up-front payment.
The plan will be available for subscriptions of Microsoft 365 Copilot, M365 Copilot for Sales and M365 Copilot for Services. Starting April 1, Microsoft will have a pricing update for other products that use per-user monthly billing plans for annual subscriptions. The vendor said it would update pricing as a way to standardize billing structure.
In "the next several months," Microsoft will update existing and new reseller agreements to include Copilot Copyright Commitment protection for qualifying claims.
Microsoft started the Copilot Copyright Commitment for customers last year, giving Microsoft "responsibility for the potential legal risks involved" if users are challenged on copyright grounds related to Copilot's output.
Copilot Copyright Commitment for resellers will cover them as customers and in support of end customers. Microsoft is also at work on a simpler experience for partners and customers to submit and manage qualifying Copilot Copyright Commitment claims. The vendor expects to release details on the updated process "in the coming months."
"The magic around the engagement on Copilot, it's phenomenal," Dezen told CRN. "I'm particularly proud to see so many partners embracing this concept of being their own customer zero--and what that means is a partner that is adopting Copilot in their own environment."
On Jan. 1, Microsoft will introduce 15 percent off the net price of M365 E5 annual commitment subscriptions, according to the tech giant.
The promotion will apply to new-to-offer customers and subscriptions of less than 2,400 licenses. Microsoft will offer the promotion through June 30.
November marked the start of a pricing discount for certain nonprofit customers. The customers can access M365 Copilot for $25.50 per user, per month when bought for an annual subscription and billing cycle on Microsoft's new commerce experience (NCE), according to Microsoft's Partner Center.
Users must have or buy a separate license for a qualifying M365 plan. Existing M365 Copilot users can't use the new pricing until renewal.
Meanwhile, Microsoft didn't divulge details on the new MRP formula meant to aid solution providers that sell to the public sector.
Instead, the vendor said that the new formula will come in the Channel Partner Agreement this month.