Exciting times lay ahead for ISVs, partners, and customers as the preview for Microsoft’s Multi-Party Private Offer (MPO) officially launched on 8th May. It’s set to dramatically change the landscape of cloud procurement as we know it, but are you ready to get on board with this latest innovation?
Think simplicity, think modernisation. It goes against the norm, but MPO, alongside Azure Marketplace, is without a doubt the future for application and service purchasing, and it’s important you don’t get left behind.
Gartner agrees, predicting that 80% of B2B sales will take place in digital channels by 2025 and this is why the digital marketplace is the place to be. None more so, now that MPO has been announced.
For Independent Software Vendors (ISVs), MPO opens a new avenue for growth, faster time to value and repeatability. ISVs now have the ability to build out an ecosystem of partners to expand their reach, better serving customers with joint solutions and offerings sold through Marketplace.
For partner sellers, it’s time to enjoy front-side margins on Azure Marketplace transactions, creating customised offers and the ability to sell directly to Microsoft customers via Marketplace.
Finally, for the customer, a streamlined, one-stop marketplace experience awaits, enabling them to strategically allocate their IT budgets against their Microsoft Azure Consumption Commitment (MACC).
But what even is MPO? Let’s take a closer look at Microsoft MPO in more detail and consider how you can earn your slice of the pie as an ISV or partner.
What is Microsoft MPO?
Multi-Party Private Offers empower ISVs and Microsoft’s global partner ecosystem to collaborate, reaching a wider customer base and driving revenue for both parties.
Example
An end-user reaches out to a partner wishing to replace their outdated accounting software. The partner has aligned with an ISV specialising in ERP systems on Azure Marketplace and relays the offering (which 100% contributes to MACC) to its customer, adding its own mark up for services and profit.
Let’s start with the basics…
The essence of MPO’s is the enablement of Microsoft partners and ISVs to come together, create custom offers and sell directly to Microsoft end-users, all with simplified procurement. And the best bit? This all takes place on the Azure Marketplace.
Unlike the old model where, as they neared the end of their contract, end-customers would have thousands of unspent dollars left over from their MACC, this new model enables customers to actually spend this committed fundings on products and services they actually want – which partners may not have been able to get hold of before! In this framework, the wholesale price is set by the ISV, with Microsoft partners applying a markup of their choice when creating the private offer (more on this later). Notably, partners incur no fees when participating in MPO transactions.
It’s a move that is set to be a popular one amongst end users. Gone are the days that customers want to build their own solutions; they want to buy from one place and get value quicker. MPO delivers this, offering the customer a single pane of glass with a simplified process and consolidated transactions – they can buy whatever Microsoft product they need, the services from a partner they require, all on the same platform – which is not only easier and more profitable for the partner and ISV, but importantly easier and more streamlined for the customer.
Impact on MPO for ISV’s
Microsoft MPO is all about empowering the partner ecosystem to sell together while unlocking cloud consumption benefits.
For Microsoft ISVs, MPO presents a unique opportunity to leverage the extensive relationships and trust that channel partners have established amongst their customers.
Through this collaboration, ISVs can enhance their overall value proposition and expand their reach to better serve customers. In a nutshell, MPO unlocks those all-important deals for ISVs when the partner owns the customer relationship and needs to be included in the transaction.
The major benefits of MPO to an ISV are the ability to:
- Unlock another revenue stream – plentiful opportunities for end-users to spend their unspent MACC on your products and services.
- Increase awareness & promotion
- Monetise and unlock growth opportunities including Marketplace rewards
- Reduce cost and time to market (free trials, flexible deals, and customer pricing)
Impact on MPO for Channel Partners
Similarly, for partners, MPO represents a game-changing opportunity to work with ISVs to create customised offers before selling directly to Microsoft customers. Unlike the previous models reliance on ‘bring your own license’ (BYOL) transactions, MPO enables partners to generate immediate, front-end revenue by facilitating transactions. They also aid customers in reducing their Microsoft Azure Consumption Commitment (MACC), something that is sure to accelerate the purchase and purchase intent.
By serving as trusted advisors, partners can unlock new avenues for growth. By next year it is predicted that 33% of Azure Marketplace will transact through partners – it’s exciting times in the channel.
The major benefits for partners include:
- Ability to sell and contract without friction
- Simplified transactions with elastic and sustainable margins
- Faster deal cycles aligning to Cloud Centre of Excellence (CCOE) with MACC
- Modernised Partner application portfolio
- Delivering governance and guardrails
- Accessing both enterprise and SMB buyers with ease
Creating an MPO
Whether you’re an ISV, partner, or customer, you’re all set to benefit from a streamlined and speedy process
Let’s take a look at what a typical MPO deal could look like.
Step 1: ISV creates an offer that includes partner: Partner price example = £100
Step 2: Partner extends offer to customer: Example price increase = 10%
Step 3: Customer buys through Marketplace
Step 4: Microsoft bills the customer and issues payment to both ISV and selling partner
To initiate an MPO, partners require the billing account ID of the customer, which can be found in the Azure portal under Cost Management + Billing > Settings > Properties or within subscription details. With this information, partners can seamlessly craft personalised offers tailored to the needs of their customers, without the complexities of dealing with the ISV and partner separately.
How to Get Involved with Microsoft MPO
Participation in MPO requires partners to be members of the Microsoft Cloud Partner Program and actively utilise the Microsoft commercial marketplace as a go-to-market and sales channel.
ISVs or partners seeking to join must have transactable offers with public plans available, although assistance is available through the ISV Success program for those new to Microsoft or lacking a transactable offer. You must also:
- Review Microsoft Partner Agreement and the preview terms and conditions including Addendum
- Contact channel@microsoft.com to get assistance for enrolment (expect at least 10 days to complete)
- Select target ISVs and align on deals to transact. Ensure ISVs offer is publicly transactable and MACC eligible (optional)
- Complete preview registration
- During the MPO you must set up UK Tax and Payment Profile requirements.
In Summary
Channel Partners are building application modernisation practices with Azure Marketplace as the mechanism of transformation – and the business value to both ISV and channel partner is far from just about MACC decrement.
Customers are looking to get better value from their software assets, be more agile and innovative, and yet strike a balance of applying governance and guardrails. That’s why building a strategy around a cloud marketplace platform that not only allows search and discovery of new digital native solutions but also enables implementation of modern cloud procurement workflows (ie, private marketplace and RBAC) offers everyone better outcomes.
Managing a customers software contracting lifecycle through Azure Marketplace and Multiparty Private Offers is the new baseline for a highly efficient and cost optimised ecosystem that customers are looking to build.
What’s Next?
Whether you’re a vendor looking to educate your partners on MPO and the potential it holds, or a channel partner wanting to activate your sellers, this is an exciting announcement and we’re here to help.
We have a number of free assets coming to market very soon, designed with YOU in mind. Keep an eye on our socials and sign up to our newsletter for all the latest and greatest MPO assets.
