Microsoft lowers marketplace transaction fee from 20% to 3%

The tech giant says it wants to show it is investing in its partner ecosystem

Microsoft has lowered its marketplace transaction fee from 20% to 3% in a bid to help partners get to market faster and build apps for every customer need.

Speaking at this year's Microsoft Inspire, the tech giant said it wants to demonstrate its commitment to the success of its partners on its platform and help them keep more of their margin to invest in their growth. The reduction in the fee applies to every transactable application published in the commercial marketplace, including its digital storefronts, Azure Marketplace and Microsoft AppSource. 

“This reduced transaction fee demonstrates our commitment to the success of partners creating value on our platform—and helps partners keep more of their margin to invest in their growth,” said Charlotte Yarkoni, chief operating officer of Microsoft Cloud and AI.

Microsoft is also expanding the payment instruments available in Microsoft AppSource, to give customers the flexibility to purchase using credit card or invoice, and independent software vendors (ISVs) can offer custom pricing using private plans.

Furthermore, ISVs will soon be able to sell their apps within Microsoft Teams. This aims to expand the ability for ISVs to monetise their offerings and provide a simplified experience for Teams IT admins to purchase apps and subscriptions directly from the Teams admin centre.

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Starting in the summer, customers will be able to buy applications within Microsoft Teams with either credit card or invoice, giving ISVs access to the platform’s 145 million daily active users.

From next autumn, publishers with transactable Microsoft commercial marketplace offers will also be able to set one price for customers and another for Microsoft Cloud Solution Provider (CSP) partners of their choice. This is meant to allow publishers to provide a margin to CSP partners upfront while CSP partners can also add a price markup when reselling to customers outside of the commercial marketplace. Essentially, publishers can develop their channel with partners in the CSP programme and compensate them for generating sales.

Microsoft hopes this new flexibility will create stronger connections among partners and incentivise ISVs to share margin with resellers. The overall goal is to make it more profitable for partners to engage and sell Microsoft commercial marketplace offers.

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