Microsoft FY27 Incentive Changes: What Partners Need to Know

As FY27 begins, Microsoft has introduced incentive and partner program changes that reshape how partners earn rebates and drive growth across AI, Security, Azure and premium Microsoft workloads.

At Ingram Micro, we’re helping partners understand what has changed, where rebates still apply, and how to focus on the highest-value growth opportunities.
 

Modern Work: Shift from Base Rebates to Growth-Led Incentives

A key FY27 change is the removal of the traditional Modern Work Core rebate. Partners will no longer earn a baseline rebate for managing Microsoft 365 licences under CSP; the focus has shifted to growth and strategic workload adoption.

The focus is now firmly on strategic product accelerators across two Modern Work tiers:

• Tier 1 accelerator – 2.5%: Microsoft 365 Business Premium, Microsoft 365 E3, Microsoft 365 Copilot Business, Microsoft 365 Business + Copilot Business bundles, Microsoft Defender Suite, Microsoft Purview Suite, Microsoft Defender Suite for Business Premium, and Microsoft Purview Suite for Business Premium.
• Tier 2 accelerator – 7%: Microsoft 365 E5, Microsoft 365 E7, Agent 365, Microsoft 365 Copilot and Copilot Studio.

Partners can still earn through accelerator and growth incentives by expanding customers into these strategic workloads. The Modern Work growth accelerator threshold has also increased from 7.5% to 12.5%.

Security, Compliance and AI Create New Revenue Opportunities

Microsoft has broadened strategic SKU eligibility, creating opportunities to offset the loss of core rebates through security, compliance and AI-led motions.

Partners should prioritise motions that:

• Upgrade customers from Business Standard to Business Premium.
• Attach Defender and Purview Suites.
• Drive Microsoft 365 Copilot adoption.
• Position E5 and E7 as part of a broader security and AI transformation strategy.

• Use Copilot Studio and agent-based solutions to support customer innovation.

Azure Remains a Strategic Growth Engine

Azure retains its 3% core rebate, providing greater predictability than other solution areas, while growth incentives now span multiple strategic workload tiers.

Azure growth accelerators are structured across three workload tiers:

• Tier 1 accelerator – 7%: All other eligible Azure workloads.
• Tier 2 accelerator – 10%: Foundry Models, Foundry Tools, GitHub, Microsoft Defender for Cloud, Microsoft Sentinel and Copilot Studio Platform, including Cowork.
• Tier 3 accelerator – 12%: SQL Managed Instance, SQL Database, PostgreSQL, MySQL, Cosmos DB, Managed Instance for Apache Cassandra and Microsoft Fabric.

For partners building cloud and AI practices, Azure remains a strong opportunity to drive customer value and incentive returns.

Business Applications: Incentives Continue to Reward Strategic Growth

Microsoft has also removed the Business Applications Core rebate in FY27, shifting the focus from licence management to strategic workload growth and customer expansion.

Tier 1 Business Applications Accelerator – Reduced from 7% to 6%

Microsoft has reduced the Tier 1 accelerator from 7% in FY26 to 6% in FY27, while still rewarding larger ERP and operational transformation opportunities.

Eligible solutions include:

• Dynamics 365 Finance
• Dynamics 365 Supply Chain Management
• Dynamics 365 Project Operations
• Dynamics 365 Human Resources

These remain strategic workloads for organisations modernising business processes and connecting operational data with AI and analytics.

Tier 2 Business Applications Accelerator – Reduced from 8% to 7%

The Tier 2 accelerator has moved from 8% in FY26 to 7% in FY27.

Eligible solutions include:

• Dynamics 365 Business Central

Growth Remains a Key Focus

Business Applications also now carries a 12.5% growth accelerator threshold, encouraging partners to expand workloads, users and services within existing customers.

COCP (Change of Channel Partner)

Microsoft has also designed a new FY27 COCP policy is designed to reward genuine customer growth rather than partner-to-partner transfers. Where a customer moves a solution area (such as Azure, Modern Work or Business Applications) from one partner to another, the new partner remains eligible for growth incentives but is ineligible for core rebates and strategic accelerators for 12 months. COCP only applies to the specific solution area being transferred, while net-new workloads remain fully eligible for incentives. The policy also applies to certain EA-to-CSP migration scenarios where an existing partner is displaced. In short, if a partner replaces another partner in the same solution area, COCP applies; if the workload is net new, full incentive eligibility remains.

FY27 Incentive Snapshot: Where Partners Earn the Most

Need help understanding how these FY27 changes impact your business?
Reach out to the Ingram Micro Microsoft team to discuss your growth strategy for the year ahead .

Join the upcoming webinar to learn more

Friday 31 July, 11:00 am - 12:00 pm