What are co-op benefits for Microsoft partners, and how do you use them in FY24?
Microsoft partners stand to gain substantial advantages through cooperative marketing funds (co-op) available in FY24 that contribute to business growth and customer success. These funds, earned through Microsoft Incentive Programs, provide reimbursement for activities aimed at boosting awareness of Microsoft products. Key incentive programs include the Cloud Solution Provider, Managed Reseller, Hosting, and Surface PC and Surface Hub Reseller incentives programs.
Microsoft partners can also leverage co-op benefits to tap into opportunities within the Microsoft commercial marketplace, creating a strong incentive for prospects and customers to explore and market third-party software. This strategic approach contributes to the expansion of the partner ecosystem, opening avenues to access new markets and create impactful partner engagements. As partners navigate FY24, these co-op benefits become integral tools in their arsenal to not only market effectively and get rewarded for the impact partners drive, but also to create and access new market segments.
Let's talk about what co-op funding is, how it is different from rebate, how it is calculated, who is eligible, what are the key focus areas, and how to maximize your co-op benefits in FY24.
What is co-op funding and how is it different from rebate?
Co-op funding serves as a mechanism for Microsoft to acknowledge and reward partners engaged in its ecosystem, fostering collaboration to meet customer needs effectively. Partners can utilize co-op funds to execute marketing initiatives, boosting brand awareness, and propelling the growth of your sales pipeline. Additionally, these funds can be invested in activities that enhance readiness, develop specializations, and attain Microsoft certifications, ultimately creating focused solution practices and Centers of Excellence.
Co-op funding is different from rebate, which is the portion of incentive earnings that you receive directly from Microsoft at the existing payout cadence for your individual program. Co-op funding is accrued by Microsoft and must be claimed by partners within a specific period.
How is co-op funding calculated?
Microsoft calculates eligible incentive earnings using a percentage split (such as 60% rebate, 40% co-op). The percentage split may vary depending on your incentive program, solution area, business type, or segment. We can help you figure out details of the percentage split applicable to your business.
Co-op funding is calculated based on your performance during a six-month earning period. The timeline for co-op funds is divided into two six-month periods, FY24 H1 and H2. H1 is the first half of the fiscal year, July 1 - December 31, 2023. H2 is the second half of the fiscal year, January 1 - June 30, 2024.
Funds earned in one 6-month period are subsequently used in the next 6-month period. For example, if your earning period is July 1 - Dec 31, 2023 (FY24 H1), your usage period is January 1 - June 30, 2024, and your claiming period is February 16 - August 15, 2024.
You also need to be mindful of proof of execution approval deadlines and ensure you obtain POE approval by September 30, 2023 for H1 and March 31, 2024 for H2.
Note that if your co-op earnings are below the threshold in the co-op earning period, your co-op earnings are converted to a rebate at the end of the semester. For details or to determine the threshold amount, contact us.
Who is eligible for co-op funding?
To be eligible for co-op funding, you must meet the following criteria:
- You must be enrolled in one or more of the Microsoft Incentive Programs that offer co-op funding. These include Cloud Solution Provider, Managed Reseller, Hosting, and Surface PC and Surface Hub Reseller incentives programs.
- You must have an active MPN ID and be in good standing with Microsoft.
- You must have a Partner Center account and assign the appropriate roles to access and manage your co-op funds.
- You must comply with the co-op fund policies and guidelines, such as submitting proof of execution documents and following the approved marketing activities.
What are the key focus areas for co-op funding?
Microsoft actively encourages partners to leverage co-op funds to enhance their business benefits and align with Microsoft's strategic priorities. The primary focus areas for co-op funding include:
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Generating business benefits by building demand through digital marketing campaigns, events, webinars, etc.
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Creating value and fostering customer loyalty and satisfaction via customer success services, adoption and consumption programs, etc.
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Developing partner capabilities and competencies by investing in training, certification, specialization, etc.
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Expanding partner offerings and solutions, fostering innovation, differentiation, co-selling and cross-selling, as the partnership progresses and the marketplace evolves.
How do you maximize your co-op benefits in FY24?
To make the most of your co-op benefits in FY24, here are some tips:
- Plan ahead and align your marketing activities with your earning period, usage period, and claiming period.
- Review your incentive program guide and co-op fund resources to understand the eligibility criteria, percentage split, threshold amount, approved activities, policies and guidelines for your co-op funds
- Monitor your co-op fund balance and status regularly
- Claim your reimbursement as soon as possible after completing your marketing activities
- Provide complete and accurate proof of execution documents to avoid delays or rejections of your claims
- Seek guidance and support from Partner1 if you have any questions or issues with your co-op funds.
Co-op funding is a valuable benefit for Microsoft partners that can help you grow your business and drive customer success. By understanding what co-op funding is, how it is different from rebate, how it is calculated, who is eligible, what are the key focus areas, and how to maximize your co-op benefits in FY24, you can leverage this opportunity to differentiate and build channel awareness and preference for Microsoft products.
TL;DR
In FY24, Microsoft partners can unlock significant advantages by strategically leveraging co-op funding to amplify their co-sell appeal with Microsoft sellers and enterprise customers. By aligning marketing activities with the earning, usage, and claiming periods, partners can effectively manage co-sell opportunities, ensuring a seamless process that includes shared activities with Microsoft sellers and co selling with Microsoft.
As marketplace-led commerce continues to evolve, co-selling and co-marketing with Microsoft become key drivers to increase transactional success and market penetration. Partners who understand the intricacies of co-op funding, including its calculation, eligibility criteria, and key focus areas, are better positioned to maximize benefits. Furthermore, as co-sell and Microsoft Commercial Marketplace adoption grows, collaboration engagement between SI partners and Azure IP co-sell eligible partners who can leverage MACC (Microsoft Azure consumption commitment) agreement benefits lead to more co sell opportunities, fostering innovation and differentiation while co selling to enterprise customers in particular.
Ultimately, this approach creates a win-win partnership that not only drives transactions but also strengthens market presence and preference for Microsoft products purchased through the Microsoft commercial marketplace and implemented by certified SI and services partners.
Not sure how to use your incentives and benefits as a Microsoft partner? We can guide you - contact us to get started.
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