Microsoft is introducing significant updates to its partner program, increasing eligibility requirements for resellers and distributors while expanding subscription flexibility for enterprise customers.
These changes, set to take effect beginning in October 2025, reflect a broader strategy to drive partner-led growth in the small and medium enterprise (SME) segment.
Stricter Revenue and Support Requirements for Partners
Starting October 1, direct bill partners will see their revenue threshold jump from $300,000 to $1 million in trailing 12-month (TTM) earnings. To maintain their status, these partners must now complete an annual operational assessment and hold at least one Microsoft “solutions partner” designation. In addition, they will need an active support agreement—either Advanced or Premier Support for Partners—which will now be enforced annually instead of only at onboarding.
Indirect resellers will face a new minimum TTM billed revenue requirement of $1,000 at the tenant level, and Microsoft plans to verify compliance on the anniversary of a partner’s first authorized tenant. Distributors, meanwhile, will be required to meet a $30 million revenue minimum per authorized region and pass the same annual assessment as direct bill partners, along with holding a valid support plan.
Microsoft will also enforce a minimum Partner Center security posture score of 80. This includes actions such as enabling multifactor authentication, designating a security contact, setting budget limits for Azure subscriptions, and responding quickly to alerts.
Path Forward for Smaller Partners
These tightened rules could lead some smaller direct bill partners to reconsider their participation in that tier. Microsoft’s strategy appears to focus on ensuring that only partners with strong capabilities, infrastructure, and security standards remain in the direct program, while others may transition to working under indirect models. By FY 2027, direct partners will also need to secure a new “support services” designation, replacing the current support practice component of the assessment.
New Three-Year Terms for Microsoft 365
Beginning June 1, Microsoft will introduce three-year subscription terms for Microsoft 365 E3 and E5 plans. These extended terms will become available July 1 for E5 Security and E5 Compliance mini suites. The offer is intended to support long-term cloud adoption, particularly for customers transitioning from on-premises or Office 365 environments.
Eligible customers—those purchasing at least 100 licenses—can choose to pay upfront, annually, or every three years. These terms provide new pricing and upsell opportunities for partners, especially in scenarios involving cross-sell, seat expansion, and long-term service engagements. To support the rollout, Microsoft will offer promotional discounts. A 10% discount on three-year E3 and E5 subscriptions purchased through the Cloud Solution Provider (CSP) program starts June 9 and runs through December 31. A separate promotion for E5 Security and Compliance mini suites will begin July 1 and last through the end of 2025.
The updates aim to align Microsoft’s partner ecosystem with evolving customer expectations and compliance needs, while creating pathways for larger, more strategic engagements. At the same time, the increased thresholds may create hurdles for smaller partners who lack the scale or resources to meet new benchmarks.
