What is the difference between MDF and co-op?

Co-op is earned by the partner as a rebate on qualifying revenue and held in the partner's Partner Center balance. MDF is discretionary funding allocated by Microsoft to specific partners for specific campaigns, usually tied to a solution area push.

Which is bigger for US partners, MDF or co-op?

Co-op is usually the larger, more predictable pot because it scales with revenue. MDF is smaller per partner but can be significant on specific solution area pushes and moves faster inside a quarter.

Can US partners use MDF and co-op on the same campaign?

Yes, provided the spend is not double-claimed. Partners often use co-op for the always-on baseline and MDF for the peak - for example co-op funds an ongoing Copilot content program while MDF funds a specific launch event or executive briefing series.

How do US partners get more MDF from Microsoft?

By operating in the solution areas Microsoft is pushing, building a strong PDM relationship, having ready-to-run campaign proposals, and reporting cleanly on past funded activity - reach, leads, MQLs, pipeline and learnings.

Do MDF and co-op both require proof of execution?

Yes. Both require proof of execution to release the funding. MDF typically carries heavier post-activity reporting because Microsoft uses it to justify the next round of allocation.

MDF vs co-op: what's the difference for US Microsoft partners?

The short version

Co-op is money you earn as a rebate on qualifying revenue, sitting in your Partner Center balance and waiting to be spent on approved marketing categories. MDF (Market Development Funds) is money Microsoft allocates to you from a channel or solution area team, usually tied to a specific solution push or campaign they want partners to help drive.

Co-op is yours to plan. MDF is Microsoft's to award. US partners who over-index on one and ignore the other usually leave half the available funding on the table.

Side by side: how MDF and co-op differ

Where the money comes from

Co-op is earned as a percentage of your qualifying billed revenue through Microsoft Commerce Incentives (MCI). MDF is allocated by Microsoft channel or solution area teams from a discretionary pool.

Who initiates

Co-op: partner-initiated. You plan the activity and submit for pre-approval. MDF: Microsoft-initiated. Your PDM or CPM tells you funds are available for a specific motion; you respond with a proposal.

Predictability

Co-op is predictable - if you know your revenue and rate, you know your balance. MDF is unpredictable - it moves each half and depends on relationships, priorities and how competitive your proposal is.

Speed

Co-op has structured pre-approval and claim windows. MDF often moves faster inside a quarter when Microsoft has a solution area to accelerate, but disappears just as quickly if unused.

Reporting expectations

Both need proof of execution. MDF usually carries heavier post-activity reporting - a scorecard on leads, MQLs, pipeline influence and campaign learnings that Microsoft will use to justify the next round of allocation.

What it typically funds

Co-op: your always-on demand engine, events, content, digital campaigns. MDF: a specific launch push - Copilot adoption, Azure migration, an industry play, a co-marketed webinar series or an executive dinner tied to a Microsoft priority.

When to use which

Use co-op to build the always-on marketing muscle - your SEO content, paid demand, nurture, monthly webinars, sales-enablement assets. It's your baseline budget and it should be planned six months out.

Use MDF for the moments where Microsoft is pushing hard behind a solution area and you can attach yourself to that motion - Copilot adoption programs, Azure migration campaigns, security modernization pushes, industry cloud plays. MDF rewards partners who can move fast, execute well and report cleanly.

The best US partners run both in parallel. Co-op keeps the pipeline accumulating. MDF adds the peaks that impress your Microsoft counterpart team and unlock more allocation next half.

Getting more MDF allocated to you as a US partner

Show up in the priority solution areas

MDF flows to where Microsoft is trying to move the needle. Copilot, security, Azure migration and industry cloud have been the big lanes recently. Position your practice against those.

Build a PDM relationship your Microsoft team can vouch for

MDF is discretionary. Your PDM has to sponsor you internally. That takes proactive updates, clean reporting on past funds and a proposal they can defend.

Have a ready-to-run play

The partners who get MDF are the ones who can say 'we can launch this campaign in 30 days, here's the plan, here's what it will deliver'. Vague ideas lose to shovel-ready proposals every time.

Report back like a professional

Send a post-activity readout even if Microsoft didn't ask for it - reach, leads, MQLs, pipeline influence, learnings. It's the single biggest driver of getting funded again next half.

The mistake most US partners make

Treating MDF and co-op as the same pot. They're not. Co-op is yours; MDF is on loan. Co-op should fund the marketing you'd run anyway; MDF should fund the marketing you couldn't otherwise justify. When partners blur the two, they either over-spend co-op on Microsoft's priorities or squander MDF on activity that would've happened anyway - and Microsoft notices both.

Run MDF and co-op like the two different tools they are

We help US Microsoft partners plan, execute and report on both MDF and co-op programs - so the funding actually turns into pipeline Microsoft sellers can point to.

Talk to our team US Microsoft MDF program marketing