CSP Partner Compliance & Incentives: Key Updates You Can’t Miss for FY26

11 July, 2025

In the rapidly evolving cloud ecosystem, staying informed is critical for CSP partners. Recently, Lee-Ann Diaz from Sabsri Consulting shared essential Microsoft updates from the past quarter, highlighting stricter security requirements and revamped incentive programs designed to protect customer data and drive partner compliance.

Starting October FY26, CSP partners must complete three key steps to maintain authorisation:

Complete business verification and vetting;
Sign the Microsoft Partner Agreement as an indirect reseller;
Meet a minimum trailing 12-month revenue of $1,000 at the partner location level.

Microsoft is also enforcing mandatory security requirements that all CSP partners must meet to stay active.

Next Steps: Meeting Microsoft CSP Security Requirements

Mandatory by October 1, 2025

Enable MFA for all admin accounts in your partner tenant.
Designate a single, accountable security contact in Partner Center (no shared mailboxes).
Respond to all Microsoft security alerts within 24 hours (1 hour recommended) and update alert statuses in the Partner Center Action Center.

Non-compliance leads to deauthorisation and a 12-month ban on reapplication.

If you don’t meet CSP authorisation requirements, you’ll be offboarded and locked out for 12 months.

Important Reminders

Vetting failures often arise from mismatches between business and legal names, unmonitored emails, or incorrect address and domain information. Ensure that all submitted details match official records exactly.
MFA is now required even for “break glass” emergency access accounts. Partners facing challenges should provide feedback via Synnex to their PDM.
Customer tenant MFA non-compliance (even just one) results in a zero score for that requirement due to Microsoft’s strict “all or nothing” scoring model.

You either get all of your points or none of your points – there’s no partial credit in the partner security score.

Recommended (Not Yet Mandatory) Actions

Start implementing these to future-proof your CSP compliance and boost your security score:

Enable MFA for all customer tenant admin users.

Incentive Eligibility Changes – Effective October FY26

Previously, holding any one Azure Solution Partner designation unlocked incentives across Azure, Business Applications, and Modern Work/Security, provided a USD 25,000 revenue threshold was met.

What’s Changing

Starting October FY26, this is no longer the case. Incentives are now split into three distinct buckets, each requiring specific qualifications:

Azure Incentives

Must have a Solution Partner designation in Azure Infrastructure, Digital App & Innovation, or Data & AI;
Or earn at least 25 points in one of these areas

Business Applications Incentives

Must have the Business Applications Solution Partner designation;
Or earn 25 points in the Business Applications categories

Modern Work & Security Incentives (Combined)

Must have a Modern Work or Security Solution Partner designation;
Or earn 25 points in either category

Key Takeaways

Azure no longer qualifies you for all incentives. You now need to qualify separately for each bucket.
Earning 25 points (down from 70) is enough to qualify for incentives without needing full designation.
The $25K revenue threshold remains mandatory for each solution area.
More incentive details are expected by the end of July.

Azure is no longer the golden child for everything.

What’s Changing with the CSP Program?

Microsoft is rolling out several updates to the CSP program starting now and into FY26.

Promotions and Transitions

The Diamond Launch Promo offers a 10% discount for new E3 or E5 customers who commit to a three-year CSP subscription.
Moving from Enterprise Agreements (EA) to CSP is now simplified with AI-powered automation that streamlines subscription cancellations and credits, partner and customer management.

Microsoft’s Strategic Priorities

Microsoft is guiding partners through growth and innovation with five key focuses:

AI Co-pilot on Every Device Across Every Role
Make AI co-pilot tools like Microsoft 365 Co-pilot widely available and help customers adopt them.
AI-Driven Innovation
Leverage AI technologies such as Azure AI Copilot and OpenAI models to create new business value across industries.
Secure the Cyber Foundations of Every Customer
Prioritise protecting data, devices, identities, and infrastructure by promoting upgrades to Business Premium and E5 Security.
Beyond Azure Migrations
Support migrations beyond cloud, including Windows 11 upgrades and Microsoft 365 co-management as Windows 10 reaches end-of-life.
Expanding Your Offering Set
Align growth with these priorities to tailor solutions and maximise partner incentives. Microsoft often tailors partner incentives around these strategic areas.

SMB Security Solution Partner Designation Update

Announced in April, this new designation makes it easier for channel partners to earn the SMB security partner badge.

Requirements are now more attainable
- Reduced net new tenant additions from 10 to 5.
- Protected seats range from 5 to 300 seats.
Skilling improvements
- Prerequisite certifications like Azure Security Engineer Associate and Microsoft Security Operations Analyst now contribute points (4 points each) toward the overall SMB security partner score.
Deployment and usage of critical security workloads (e.g., Intune, Azure AD Premium P1) and E5 Security workloads (e.g., Microsoft Defender for Identity, Defender for Office, Defender for Endpoint, and Information Protection) count toward designation.

MCAPS Start for Partners, 15 July

Register to gain deeper insights into Microsoft's strategic priorities, Microsoft AI Cloud Partner Program enhancements, and new business opportunities to scale your business.