To strengthen its investment in the ISV ecosystem and to simplify the go-to-market process, Microsoft has reduced its marketplace transaction fee from an industry-standard 20 percent to a flat three percent. This investment allows ISVs to unlock their customer base from the largest global enterprises to small and medium businesses, and it enables them to keep more of their margin while scaling globally. The Commercial Marketplace is leading the way in modern enterprise procurement and takes the complexity out of buying software while giving ISVs direct access to their customers. By shaving the transaction fee to just three percent, the Commercial Marketplace becomes the connector and driver for growth of ISVs.
Independent Software Vendors (ISVs) are a vital cog in Microsoft’s partner machinery. Recent Forrester studies have shown that when partners build with Microsoft, they are able to develop their solutions 50-75 percent faster and reduce their time to implementation by 85 percent. Forrester’s study also shows that partners who sell with Microsoft increase their deal size up to 400 percent and experience greater than 100 percent year-over-year subscription growth in the first three years. Microsoft relies on the deep expertise of its ISV partners to develop the solutions that its customers need most. Hence, it is Microsoft’s top priority to provide the platform, the tools, and the resources its partners need to be successful.
Businesses have dramatically increased their use of Teams to support work-from-home scenarios – and are integrating apps for Teams to help boost productivity and efficiency beyond the usual Teams gains. Partners that have either integrated with or extended Teams capabilities are seeing increased revenues, greater usage, and lower costs. To help partners build and market apps for Teams and Viva, Microsoft has introduced a new set of benefits, including access to Microsoft technology, one-to-one consults with Microsoft experts to help partners design, and build collaborative applications and employee experience solutions—marketing resources to scale to new customers, and support to achieve co-sell status to increase visibility with more than 15,000 Microsoft field sellers.
ISVs will also soon be able to sell their apps directly within Teams, offering new economic opportunities and providing a simplified experience for Teams IT admins to purchase apps and subscriptions directly from the Teams admin center on behalf of their organization.
Over 250,000 organizations are using Dynamics 365 and the Power Platform to run and transform their businesses, including 97 percent of the Fortune 500 companies. The momentum is equally strong in the ISV ecosystem, extending first-party apps, and building on the platform to create even more value for joint customers. To date, over 734 ISVs have enrolled in the biz apps ISV Connect program with over 1,472 apps certified. Key enhancements to the ISV Connect program ensure building on the shared success model that reinvests into partners with key technical, go-to-market, and co-sell benefits.
Starting this October, there will be significant reduction in revenue sharing fees for ISV Connect aligned to the new commercial market fees of three percent. This simplified program will enable ISVs to accrue benefits faster, all while continuing to reach customers at scale through Microsoft AppSource and leverage the value of Microsoft’s marketing and selling engines.
With over 90,000 Cloud Solution Providers (CSPs), this is a massive channel for ISVs to instantly scale their application to new customers. ISVs will be able to create new private offers to CSPs and extend the margin to resellers—incentivizing resellers to sell their applications. Through the channel, ISVs can grow their business by expanding into new markets, without requiring a local presence, and acquire new customers through CSPs.
In turn, CSPs can expand their catalog with new ISV solutions from the commercial marketplace and bundle their value-added services to provide customers end-to-end solutions to solve their business challenges. This creates stronger, better, partner-to-partner opportunities to help partners grow their business. This opportunity is in private preview and will be generally available for all ISVs and CSPs later this year.
Over 30,000 applications and services are included in the commercial marketplace catalog, with over four million shoppers engaging every month. The commercial marketplace is central to selling with Microsoft, whether that’s directly through the digital store fronts, AppSource, and Azure Marketplace, through the channel of 90,000 resellers, with the global sales force of over 15,000 sellers, or going to market jointly with IP co-sell. Since 2017, co-selling together has contributed to generating direct partner services revenue worth more than $22.1 billion. Microsoft’s unparalleled reach presents a real opportunity for ISVs. There are over a billion people using Microsoft technology around the world.
Microsoft 365 has over 300 million commercial Office 365 users, and 145 million daily active users on Teams. With 97 percent of the Fortune 500 using Microsoft Azure, Dynamics 365 and the Power platform to run their business, the Microsoft commercial marketplace is the channel to instantly scale ISV solutions to millions of customers.
