Microsoft plans new eligibility rules for resellers, distributors

‘This is all designed to fuel growth in the small and medium enterprise customer segment through our partners,’ says Microsoft Chief Partner Officer Nicole Dezen.

Microsoft has published plans for increasing some of the eligibility and authorization requirements for a variety of partner types Oct. 1, notably more than tripling revenue rules for direct bill partners and starting to enforce revenue demands for indirect resellers.

Along with the eligibility changes, Microsoft plans to launch three-year subscription offers for its E3 and higher-priced E5 licenses on June 1, with three-year subscriptions becoming available July 1 for Microsoft 365 E5 Security and E5 Compliance mini suites—and promotions to incentivize customers to adopt the offers.

“This is all designed to fuel growth in the small and medium enterprise customer segment through our partners,” Nicole Dezen, Microsoft’s chief partner officer and corporate vice president for the Global Partner Solutions organization, told CRN in an interview.

Microsoft Partner Program changes

On the eligibility requirements, Dezen said that “it’s fundamentally important that customers can trust the partners with whom they do business.”

“Part of that trust means having an incredibly high bar for quality and capability so that when customers make that choice of a partner of Microsoft, they can have the utmost confidence that they are selecting a partner and provider that can deliver all the value that they need for the entirety of their business, including AI transformation,” she said. “We very regularly look at our business requirements across the board. These new authorization requirements are part of that work to ensure that we have a very high bar for quality and capability.”

Eligibility updates

Starting Oct. 1, the revenue threshold for direct bill partners changes from US$300,000 TTM at the partner global account level to US$1 million.

These partners will now need to pass an annual, automated assessment measuring operational capabilities, sales capacities, customer support practices and compliance frameworks. The assessment has been active this Microsoft fiscal year for new and geographical expansion partners.

Direct bill partners will need at least one “solutions partner” designation to continue under this category. The six solutions partner designations for services providers are in business applications, Microsoft’s “modern work” suite, security, data and AI, digital and app innovation and infrastructure.

These partners will also need active Advanced Support for Partners or Premier Support for Partners plans. For the current fiscal year, Microsoft has enforced active plans at partners’ initial on-boarding. In the next fiscal year, plan status will be enforced annually.

Advanced Support for Partners, which starts at US$16,500 a year, brings resources for Microsoft cloud products, including cloud consults and optimization reports and pooled account management, according to the vendor.

Premier Support, which doesn’t have a starting price listed, adds in managed support across the full Microsoft platform, with resources for hybrid and on-premises products and services. On-site support is an added option, as is personalized time with a premier field engineer for deployment and migration and a designated account manager, among other benefits.

Microsoft also said that in fiscal year 2027, direct bill partners will need to achieve the “support services” designation, which will replace the support practice pillar of the annual assessment.

For indirect reseller partners, Microsoft will start enforcing a required US$1,000 in trailing 12 months (TTM) billed revenue at the tenant level, according to the vendor.

For newly enforced CSP requirements, Microsoft will conduct enforcement during the anniversary month of the partner’s first tenant authorized.

Microsoft will put the minimum TTM revenue requirement for distributors at $30 million per authorized region as part of the program requirements starting Oct. 1. Like with direct bill partners, Microsoft will also start enforcing an active support plan—either Advanced or Premier Support for Partners—and passing an annual assessment.

A Microsoft distributor designation that entered preview in the last quarter of the current fiscal year will become generally available in the first quarter of fiscal 2026.

Direct bill partners, resellers and distributors will need Partner Center security posture scores of more than 80 points as part of the changes.

Partners doing the following receive 20 points per action: enabling multifactor authentication for administrative roles, providing a security contact accountable to security issues in the partner organization, and requiring multifactor authentication for administrative roles in the customer tenant.

Partners putting a spending budget on all Azure subscriptions and responding to alerts within 24 hours of appearing in Partner Center receive 10 points per action.

Kathy Durfee, CEO of Lakewood Ranch, Fla.-based Microsoft partner TechHouse, told CRN in an interview that she is still going through the new requirements and what they mean for her business. But she suspects not every direct bill partner can meet the new eligibility requirements, meaning some will have to become indirect resellers.

“I believe we will survive as direct,” she said. “But wow, [US$1 million] is a big number.”

Three-year subscription term

Three-year terms will be available to Microsoft 365 subscription bundles without Teams, the stand-alone Teams Enterprise offer and M365 bundles with Teams customers were able to buy or renew before the package went end of sale to appease antitrust concerns in Europe. Buyers need to pay up front, once a year or once every three years, according to the vendor. And they need to buy at least 100 licenses.

In a document explaining the three-year term offer, Microsoft said that these terms should incentivize longer-term relationships for customers that want to leave on-premises, hybrid or Office 365. Partners should also find new upselling opportunities under these terms.

Three-year terms offset the costs of acquiring, adopting and administering larger customers with more complex IT environments. And partners should have the ability to make better pricing offers “to switch customers from competing cloud providers,” according to Microsoft.

The longer terms should also help partners with cross-selling, seat growth and other revenue opportunities, including project, advisory and managed services.

Customers leaving Enterprise Agreements (EAs) for CSP ones might like the option to maintain three-year terms, according to Microsoft.

To make the upcoming three-year subscription term offers more appealing to customers, on June 9, Microsoft will launch a 10 percent discount promotion for three-year terms selected by customers new to E3 or E5 on CSP. The discount applies to up-front and annual billing options and customers who buy at least 100 licenses but less than 2,400 licenses. The plan is for the promotion to run through Dec. 31.

The promotion for the E5 Security and E5 Compliance mini suites starts July 1 and runs through the end of 2025 as well. It applies to up-front and annual billing options and customers with at least 100 licenses but no more than 1 million licenses.