Your co-op funding has a deadline, and most US partners will miss it
Microsoft has just told US partners exactly where to spend their marketing dollars, and roughly 75% of partners are about to ignore it.
First, the uncomfortable numbers.
The FY27 Commercial Partner Incentives Guide is a long read, and the co-op section sits well past the halfway mark. Which is a shame, because it's the part with money in it that you've already earned - money that expires if you don't use it.
of partners under-invest in demand generation
use less than half of their allocated vendor marketing investments
According to Omdia, 75% of partners under-invest in demand generation, and 43% of partners use less than half of their allocated vendor marketing investments. Not "spend it badly". Don't spend it at all.
Source: Omdia
Meanwhile Microsoft's own co-op ROI analysis - built on aggregated historical claims data - found partners who invest in the highest-performing activity types realize 2 to 5 times higher future earnings from Microsoft business than partners spending elsewhere. Paid media with multi-touch campaigns is the named example.
So Microsoft has run the numbers, found what works, published it in the guidebook, and told you which activities correlate with growth. That's about as helpful as a vendor gets.
And there's a margin argument too, which the guide makes explicitly in its own FAQ: because co-op can't be handed to customers as a discount, partners who start using it tend to see gross margin per sale go up measurably. Don't look at Co-op as just another marketing budget that you don't know what to do with. Think of it as a protected marketing budget that expires. Treat Co-op with the urgency it deserves.
Microsoft's approach to funding and incentives has changed - it's now all about growth, so partners should sit up, take a moment to review their existing GTM plans and start using their Co-op funding in this way - particularly if they want to keep receiving it.
The key dates you need to put in your diary today.
Co-op is earned and accrued semi-annually, then spent in the following six-month window. That's the whole mechanic, and it's where most of the waste comes from.
- Earned in
- FY26-H2 (Jan to Jun 2026)
- Spent across
- FY27-H1 (Jul to Dec 2026)
- Claim deadline
- February 15, 2027
- POE approval
- March 31, 2027
- Earned in
- FY27-H1 (Jul to Dec 2026)
- Spent across
- FY27-H2 (Jan to Jun 2027)
- Claim deadline
- August 15, 2027
- POE approval
- September 30, 2027
The small print details that catch people out
There's a window at both ends.
Claims can only be submitted from 45 days after the usage period begins, and should be made within 45 days of activity completion. It isn't just a deadline to beat - there's an opening date too.
Nothing rolls over, and nothing is half-paid.
Unclaimed funds are forfeited at the end of the period with no reinstatement and no rollover. Partial claims aren't permitted, so a claim that's short of documentation isn't half-paid - it's not paid.
Put both claim deadlines in the marketing calendar. Then work backwards and put the activity dates in too, because you can't claim for something you haven't run yet.
What's changed
Half the activities now have new names.
This is the bit that'll quietly break your planning spreadsheet if you built it last year. Several separate FY26 activities have been folded into one.
| FY26 activity | FY27 activity |
|---|---|
| Direct mail, email and SMS, multi-touch digital campaign, partner website and search engine, social media marketing | Paid media with multi-touch campaign |
| Tradeshows and expositions | Events (Customer) & Conferences |
| Telemarketing | Targeted Prospecting |
| Customer seminars and partner bootcamps | Customer Workshops |
| Migration services | Customer Solution Adoption |
| Solution building with third parties | Solution Co-Innovation |
Microsoft Syndicated Content, Proof of Concept, and Employee Purchase Web Setup are gone. If any of those were in your plan, they're no longer claimable.
The consolidation isn't cosmetic. Under the old names you could claim a standalone social campaign or a website refresh on its own. Under Paid media with multi-touch campaign, you can't.
The activity Microsoft rates highest is also the strictest.
Paid media with multi-touch campaign has a defined shape, and it's worth knowing before you brief anything.
Paid media is a required anchor
Everything now hangs off the need for a paid element - Microsoft is doubling down on its insistence that Co-op funds should be used to drive demand - and what better way to evidence that?
Plus at least one or two supporting activities
Pick at least two of the following:
- A partner website with a landing page
- Email or direct mail
- Blogs or videos
- Search optimization work including SEO, LLMO and GEO
The guide is blunt that these have to run as a unified campaign, not as independent tactics.
Organic social counts, but only in context
It's eligible where it's part of the wider campaign, and the claimable expense is localization and boosting posts, not the organic posting itself.
Case studies are supported
The activity also supports developing a customer case study, which Microsoft recommends you then use in the paid outreach.
Proof of execution is specific
You'll itemise a minimum of three lines on the CSR form: a screenshot of the paid ad, two optional activities evidenced with creative materials, and an execution report from the platform - Google Ads, LinkedIn, Meta - showing the date range with impressions, clicks or leads.
Read that requirement list again and notice what it's really asking for. A campaign with a paid anchor, supporting content, a landing page and platform-level reporting. That's not a co-op requirement so much as a description of a campaign that actually works. Microsoft has written good practice into the rules.
Nathan Selby, Founder, ResultfulWhere Microsoft suggests you point the money.
Recommended spend guidance by solution area for FY27.
It's guidance, not a rule - the guide says so. But it tells you where Microsoft is putting its investment, and aligning to it makes conversations with your Microsoft contacts considerably easier. If your plan is 80% Modern Work because that's where you're comfortable, you're now visibly out of step with the priorities those contacts are carrying.
Worth knowing too: the guide points repeatedly at ready-made assets - Campaign in a Box, Partner Marketing Center Pro, Cloud Ascent propensity data for targeting. If budget is tight, that's a lot of campaign scaffolding you're entitled to and probably aren't using.
New caps, and one that's about to get tighter.
FY27 introduces spend caps on several activities for CSP and Hosting.
| Item | Weighting |
|---|---|
| Allocated resourceCap unchanged for FY27, but expected to decrease in FY28. | 50% |
| Partner AI adoption | 5% |
| Customer solution adoption | 5% |
| Marketing automation | 3% |
| Partner organization incentives | 2% |
| SPIFFs | 2% |
| Internal incentives | 2% |
| Promotional branded merchandise | 1% |
Allocated resource is the most important one to watch. For now, the cap remains at 50%, but Microsoft has laid its intentions out clearly - this is expected to decrease in FY28, so partners should be planning now for that reduction.
If half your co-op currently funds a dedicated marketing head, you've got roughly a year to either build the case for that role standing on its own, or rebalance towards activities that'll still be fundable. Don't wait until the FY28 guide lands to find out by how much.
One more constraint on that role: an allocated resource must be directly employed or contracted by you, and explicitly may not be a third-party subcontractor. Agency retainers don't qualify under that heading - though agency fees are eligible under plenty of the campaign activities.
New restrictions on sporting venues and entertainment-led events.
One surprise announcement in FY27 is the restriction around event sponsorships and entertainment-focused costs. This year, Microsoft has introduced significantly tighter guidance around sporting venues, sporting hospitality, entertainment-focused events and premium hospitality experiences.
Microsoft wants funding to drive customer adoption, usage and growth, rather than simply reimbursing marketing spend.
Not sure your planned spend still qualifies?
If you've already booked venues, hospitality or event sponsorships for FY27, it's worth walking the plan through with your partner success contact before you commit. If you'd rather sense-check it with us first, send over the questions and we'll tell you straight whether it'll claim.
The claim rules that will trip you up.
The FY27 emphasis has moved firmly onto documentation quality.
Detailed invoices come first
The guide now prioritizes a detailed third-party invoice, and defines what "detailed" means: enough for an independent reviewer to identify what activity was performed, when it occurred, and where it took place. If your invoice doesn't carry that, you're into supplementary POE for every expense.
One line item per activity
On the CSR form, each activity or expense has to be a separate line item with its own investment amount, so Microsoft can track ROI properly.
One expense, one program
Anything claimed under Microsoft Commerce Incentives can't also be claimed under co-op.
Travel, meals and mileage
Travel is out except where an activity specifically allows it, and meals and mileage are always out.
Venue rules for workshops
Customer workshops have to be in business-appropriate venues with a clearly educational purpose. Stadiums, sports suites and entertainment settings are explicitly not allowed.
Branding rules
Activities must not appear to be conducted by or sponsored by Microsoft, and your own brand name plus contact details must appear on all demand generation and market development activity.
Creative preapproval.
You can submit creative by email before the activity starts, get a response within three business days, and receive a preapproval code to enter on the claim. Microsoft strongly recommends it. Three days to remove the risk of a rejected claim is a good trade.
What we'd do this month.
- 01
Find out what you've actually got
Log into Partner Center and check your accrued balance and when it expires. A surprising number of partners genuinely don't know.
- 02
Make a note of both claim deadlines
February 15 and August 15, along with the POE approval dates behind them.
- 03
Design proper multi-touch campaigns
Execute paid-first campaigns that utilize quality content, rather than three disconnected tactics. It's what generally works best and it's what the rules now require anyway.
- 04
Model allocated resource against a lower FY28 cap
Decide now what replaces the spend if the cap drops.
- 05
Consider preapproval on your first claim
Get the process right once and repeat it if you're unsure.
Co-op is the least glamorous part of the incentives guide and the easiest money in it.
You've already earned it. Nobody has to approve a business case. The only thing standing between you and the spend is a plan and some paperwork.
Yet it consistently gets treated as an end-of-period scramble - a rush of half-evidenced claims in the two weeks before the deadline, spent on whatever can be executed fastest rather than whatever works best. That's how you end up in the 43% who use less than half of what they're given.
The partners who get value from co-op do one simple thing differently. They plan the marketing first, then claim against it - rather than looking at the balance and asking what they can spend it on. Same money, completely different outcome.
Co-op spend ideas.
A few marketing tactics that qualify under the FY27 activity list and typically get paid out without any issues, if you'd like somewhere to start.
A paid-first campaign around one solution area
Pick the solution area you actually want to grow, then put a paid media budget against it with supporting content behind the click. It's the activity Microsoft rates highest and the easiest one to evidence.
Refresh the pages the campaign points at
Paid traffic lands somewhere. Fund the solution page, the proof points and the case studies at the same time, so the spend doesn't leak on a page that hasn't been touched in two years.
An account-based program into shared targets
Data, creative and targeted media into a named list you and Microsoft both care about, rather than broad awareness spend that nobody can attribute.
Customer proof you can reuse all year
Case studies, video testimonials and a launch push behind them. One shoot funds a quarter of content and gives Microsoft sellers something to pass on.
An event with a proper follow-up plan
Put on an event and resource the two months of nurture after it. Events claim well; unfollowed leads don't earn out.
Still stuck on more tactical things to push? Here are some suggestions to get you going:
Hero content
Whitepapers, eBooks, guides - educational content to help customers and prospects identify with a problem.
Webinars
Engaging sessions that allow customers to hear first-hand about your capabilities and experience - as well as how Microsoft solutions can help them.
Assessments
Ways for customers to understand how they stack up against best practice or benchmark data, highlighting key areas for improvement. Self service or human-led.
Product demos
Interactive sessions that show customers how things could work in their world.
Key takeaways.
Co-op is money you've already earned - the only blockers are a plan and clean paperwork.
Two claim deadlines matter: February 15 and August 15, plus the proof-of-execution approval dates behind them.
Paid media with a multi-touch campaign is the activity Microsoft rates highest, and the easiest to evidence.
Allocated resource stays capped at 50% for FY27, but Microsoft has signaled a drop in FY28 - model for it now.
Sporting venues, hospitality and entertainment-led events are out; funding has to drive adoption, usage and growth.
Get detailed third-party invoices with one line item per activity (no travel, meals or mileage).
Creative preapproval takes three business days and removes the risk of a rejected claim.
Plan your activities first, then claim the costs back - same money, far better outcome.