Azure IP co-sell updates

In FY27, Microsoft is making strategic changes to Azure IP co-sell to drive greater partner impact.

Impacted audience

Software Development Companies (SDCs)

Azure IP co-sell is Microsoft's joint go-to-market motion for qualified partner solutions. It empowers you to increase market reach, engage with Microsoft sellers, and accelerate customer success through collaborative selling and Microsoft Marketplace-driven growth.

As Microsoft continues to evolve the co-sell offering, it’s changing how partner-led deal impact is recognized to better align with current customer buying patterns and solution delivery models. While the Partner Reported Azure Consumed Revenue (PRACR) model operated as the co-sell mechanism in the past, Microsoft is moving toward a more automated, Marketplace-first approach.

In FY27, i.e. from July 1, 2026–June 30, 2027, Marketplace becomes the primary path for co-sell at scale, creating a more consistent, predictable, and auditable experience for both partners and sellers while better aligning incentives with Microsoft’s long-term strategy.

This evolution improves planning stability and establishes a more scalable foundation for future growth by better aligning incentives with Microsoft’s long-term strategy.

What you need to know about upcoming co-sell changes:

• What is the strategic direction? Co-sell is now Microsoft Marketplace-first. Going forward, Marketplace is the expected path for scalable, consistent co-sell execution because it supports verified transactions, clearer alignment between partners and Microsoft sellers, and more predictable outcomes.
• Is Partner Reported Azure Consumed Revenue (PRACR) being used in FY27? Microsoft is moving from legacy partner-reported approaches toward more scalable, consistent, and auditable models to recognize partner impact. In FY27, PRACR no longer operates as a broad co-sell mechanism, and partner engagement instead aligns to Marketplace-first execution. Marketplace becomes the primary path for co-sell at scale, providing a more transparent, automated, and verifiable transaction model for partners and sellers.
• What do I need to do now? Focus on Marketplace readiness and execution. If you already transact through Marketplace, continue scaling. If you have gaps that prevent Marketplace transactions in certain scenarios, work with your Partner Development Manager (PDM) on the path forward. Co-sell credit for Marketplace transactions continues to be recognized through Marketplace Billed Sales (MBS).

Is there a single location I can visit to find resources and helpful information on Marketplace? Visit the Microsoft Marketplace page for more information.

Microsoft will continue to communicate through official channels and partner resources. Refer to published guidance and your Microsoft contact team for updates.

Next steps

Familiarize yourself with the new model and how to prioritize transactions through Microsoft Marketplace.

For general or operational inquires, contact IPCosellDesk@microsoft.com.