Microsoft to update ISV Connect with lower fees, new benefits, and commerce in AppSource

Microsoft is preparing to update the ISV Connect program with reduced revenue sharing fees, plans for new licensing and commerce capabilities for ISV applications, and new offers on development and pre-sales server resources.

ISV Connect launched in full about eighteen months ago and has grown to include over 740 ISVs and 1,400 apps in AppSource. Adjustments to the program that have been announced this week at Microsoft Inspire 2021 were developed based on feedback from partners and broader examination of the market, says Toby Bowers, Microsoft general manager for product marketing, who now leads go-to-market for Alysa Taylor's team. He told MSDW:

We've made continued investment in the overall user experience and partner experience with AppSource. But in that past year, we really focused on listening to how the program was landing, obviously, as a new thing. And we conducted extensive research with our ecosystem… And we listened and really heard some of the feedback and important areas for our partners, for us to focus on, to really deliver on the promise of that joint success between Microsoft and our partners.

The program will change in substantial ways, but it remains the central ISV model for engagement around Microsoft business applications, said Bowers. One significant change coming to the program is the elimination of the separate tiers of membership with fees of ten and twenty percent, respectively. Those tiers will be reduced to a three percent revenue share across all ISVs, with different benefits unlocked as vendors reach different revenue levels on a trailing twelve-month basis. The updates to the program will become operational in October 2021. Bowers noted that ISV Connect's changes will match Microsoft's broader commercial marketplace policies:

[A]s a company, we really saw an opportunity to build a much more consistent approach for ISVs building across the Microsoft cloud. So Azure, Teams, Dynamics 365, Power Platform, as well as our new industry clouds. We're working towards a much more consistent approach across our products, the way we build our products, our programs, the way we engage our people, all supporting our partners as one Microsoft, because we believe that's ultimately our opportunity to truly differentiate versus other players in the market who are more focused on alliances and acquisitions.