If you’ve worked with Microsoft co-op funds before, you already know they’re a brilliant way to get the extra marketing boost every business needs. With the new financial year now underway, Microsoft has made some changes you’ll want to know about.
Don’t worry—we’ve broken it all down in a way that’s easy to understand. Here’s what’s new and what you need to know.
There are four key updates in FY26 that could affect how much you earn—and how you use your co-op funds:
In the past, holding any Solutions Partner badge was enough to qualify for incentives across the board.
Now Microsoft is getting specific. You only earn co-op (and rebates) in the solution areas where you’ve proven your capability.
So, if you want incentives for Azure, you need either:
- A Solutions Partner badge in an Azure category, or
- At least 25 points in your Partner Capability Score for Azure.
Same for Modern Work, Security, and Business Apps.
Incentives are now reserved for partners who are actively selling.
- Indirect resellers must have at least $25,000 in annual CSP sales to be eligible.
- Direct-bill partners need $1 million in annual CSP revenue, plus at least one Solutions Partner designation.
If your numbers are below that, you might miss out on co-op this year.
Microsoft is clamping down on partners who try to move customers between partner IDs just to earn incentives. This refers to what’s known as Change of Channel Partner (COCP) abuse—where a customer is shifted between partner accounts without any added value, purely to trigger incentive payments. Microsoft is now actively monitoring this and may withhold or claw back funds if it detects manipulation.
Make sure:
- You’re adding real value in your engagements.
- Your marketing and sales activities are legit and customer-facing.
- No playing the system; it’s not worth the risk.
Co-op funding is still generous, but the rules around how you spend it have tightened.
Here’s what’s in:
- Demand-gen (digital ads, webinars, content syndication, LinkedIn campaigns, social media ads)
- Market development (PoCs, workshops, customer bootcamps, in-person demos)
- Skilling (certifications, training, internal enablement, technical upskilling days)
What’s out:
- TV and radio ads
- Microsoft event sponsorships (e.g. Ignite)
- Cash prizes or gift cards
- Specialisation audit fees
So, if you’re planning campaigns—check the FY26 Co-op Guidebook or ask us at Blacfox to help you structure a claim that ticks all the boxes.
Here’s the cycle, in plain terms:
- Sell Microsoft products. The more you sell (and the more areas you qualify in), the more you earn.
- Track your co-op earnings. These are calculated every 6 months and shown in Partner Center.
- Plan your campaigns. Think ahead: digital, events, training.
- Spend the money. You pay first, then claim.
- Submit your claim on time. You’ve got 45 days after the usage window closes.
If you miss the deadline, the funds will disappear. No rollovers.
Claims are due by mid-August for H1 funds and mid-February for H2 funds.
Final tips
- Check the Co-op Guidebook regularly. Microsoft updates activity guidelines from time to time—stay in the loop by reviewing Partner Center announcements and the latest guidance.
- Start early. Don’t wait until month six to plan your campaign.
- Track your designation and capability score. If you don’t have 25 points in a solution area, you’re not eligible for co-op there.
- Document everything. Invoices, screenshots, attendee lists—Microsoft wants proof.
- Use it or lose it. Co-op funds expire. Plan to use the full balance before it’s too late.
