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Marketplace scale sees Microsoft slash ISV transaction fees

Marketplace scale sees Microsoft slash ISV transaction fees

Also being introduced are new benefits for ISVs that want to build and market Modern Work apps for Microsoft Teams and Microsoft Viva.

Lizelle Hughes (Microsoft)

Lizelle Hughes (Microsoft)

Credit: IDG (Maria Stefina)

After enjoying a 70 per cent year-on-year increase in transactable applications on its commercial marketplace, Microsoft has decided to reduce its fees for transactable offers to 3 per cent, a substantial drop from the industry standard fee of 20 per cent. 

“We see more ISVs on the platform, which is creating more investment,” Microsoft Australia’s director of independent software vendor (ISV) partnerships Lizelle Hughes told ARN. “We’re able to optimise that and pass those savings onto our ISVs, they can choose to reinvest that in two different ways, list a set price, or list a second price for CSPs [cloud solution providers], providing margins for CSPs.”   

Indeed, starting this northern hemisphere autumn, ISVs with transactable commercial marketplace offers will be able to set one price for customers and another price for Microsoft CSP partners of their choice. 

The announcements come during the company’s Inspire 2021 partner event this week, with the vendor revealing a number of fresh items of interest for ISVs, which are most likely to benefit from the marketplace fee cut.   

Also being introduced are new benefits for ISVs that want to build and market Modern Work apps for Microsoft Teams and Microsoft Viva, the company’s employee experience platform. 

Eligible ISVs will receive access to Microsoft technology, curated training, one-on-one consultations and marketing resources to help them reach the estimated 145 million people who collaborate on Teams daily.   

According to Microsoft, ISVs planning to build Teams or Viva apps for business-to-business scenarios are eligible. However, partners must be members of the Microsoft Partner Network.    

Charlotte Yarkoni (Microsoft)Credit: Supplied
Charlotte Yarkoni (Microsoft)

“There is an untapped opportunity to build productivity and collaborative applications in the new hybrid-work reality,” said Charlotte Yarkoni, Microsoft Cloud and AI chief operating officer. “With the incredible reach of Microsoft Teams and Microsoft Viva – Microsoft is investing in helping ISVs accelerate their success with new benefits.  

“Benefits include access to Microsoft technology, one-on-one consults with Microsoft experts to help 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 our 15K-plus Microsoft field sellers,” she added. 

Moreover, the company has announced the simplification of, and enhancements to, its Business Applications ISV Connect program, designed to help ISVs take advantage of the growing demand for line-of-business applications leveraging Microsoft Dynamics 365 and Power Platform. 

Specifically, Microsoft is reducing the revenue sharing fees required to receive benefits and aligning to the newly announced standardised 3 per cent transaction fee with the commercial marketplace.  

“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,” Yarkoni said.  

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