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The hyperscaler will end a process that requires independent software vendors to self-report transactions.
As buyers gravitate to hyperscaler marketplaces, Microsoft is pushing partners to build out their presence on the platform and creating features and incentives to make that happen.
The company framed the marketplace-first move as a way to align partner incentives with its broader strategy of housing its partner ecosystem on the platform. For ISVs, it will create consistency, ensure better transaction verification and provide stronger automation capabilities, according to the announcement.
ISVs that transact through the marketplace have been eligible for Azure credits and go-to-market resources offered through a formal rewards program since 2022. Last month the company initiated an AI marketplace makeover for ISVs, previewing an intelligent discovery generative AI interface that lets customers search for software using natural language prompts.
“This is literally a customer looking for your app or software using the words that match,” VP of Microsoft Cloud and AI Cyril Belikoff told Channel Dive. “If you know your customer, then you’re going to know the words they’re using to search.”
Marketplace is the company’s preferred path for “scalable, consistent co-sell execution,” the company said last week. Sunsetting competing co-sell channels within its ecosystem is another step toward centralizing the role of its marketplace platform.
“This reflects a broader industry trend, with hyperscalers increasingly steering software sales towards their marketplaces,” Peter Woest, Cloud Marketplace Partnership Director at Westcon-Comstor, told Channel Dive. “We’ve seen a similar marketplace-first approach from AWS.”
The strategy, which ties third-party solutions to a hyperscaler’s infrastructure while giving customers the flexibility to use cloud credits to procure ISV products, is working, according to Omdia, a Channel Dive sister company. The analyst firm expects cloud marketplace transactions, which netted roughly $30 billion in 2024, to increase to $163 billion by the end of the decade.
For partners outside of the ISV sphere, the outlook is similarly sunny. By 2027, Omdia anticipates that more than half of cloud marketplace transactions will flow through the channel.
“Marketplace adoption is accelerating,” Edwards told Channel Dive. “As IT budget pressure intensifies for enterprises with rampant price inflation on IT products and solutions, the ability to burn down their pre-qualified committed cloud spend becomes even more attractive.”
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The reseller is taking hardware onto its books, betting that customers who are stuck in approval cycles will pay for price certainty.
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The reseller is taking hardware onto its books, betting that customers who are stuck in approval cycles will pay for price certainty.
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