Your co-op funding has a deadline, and most US partners will let it expire
Microsoft has spelled out exactly where US partners should put their marketing dollars this fiscal year, and roughly three in four are about to leave that guidance on the table.
First, the uncomfortable numbers.
The FY27 Commercial Partner Incentives Guide runs long, and Microsoft tucks the co-op section past the halfway mark of the document. That placement undersells it - this is the part covering dollars you've already earned, sitting in your Partner Center balance in USD, with a clock quietly counting down toward forfeiture.
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
Microsoft ran its own numbers on historical claims data and found partners backing the top-performing activity types land 2 to 5 times more future Microsoft-sourced revenue than the ones spending elsewhere. Paid media anchored to a multi-touch campaign is the specific activity Microsoft calls out by name.
That's an unusually direct signal from a vendor: written proof of which activities actually correlate with pipeline. For US partners planning budgets against Microsoft's July-June fiscal calendar, that's worth building the next quarter's plan around instead of guessing.
The guide's own FAQ makes a margin case too: since co-op can't be passed on as a customer discount, partners who actually spend it tend to see gross margin per sale go up. Quit treating it like a line item nobody's responsible for. It's earmarked marketing budget with an expiration date, and it deserves a place on the same planning calendar as your Ignite prep or your Q3 pipeline review.
Funding is now more explicitly tied to growth outcomes, so before your next planning cycle, pull up the current go-to-market plan and check it against where this money is actually pointed - particularly if staying eligible next fiscal year matters to you.
The key dates you need on your calendar today.
Co-op accrues twice a year and gets spent in the six-month window that follows. That's the entire mechanic, and it's where most US partners lose money without noticing.
- 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 fine print that trips up US partners
There's a window at both ends.
You can't file a claim the moment a usage period opens - Microsoft holds submissions until 45 days in, then wants them filed within 45 days of the activity wrapping up. Miss the early window and you're just as stuck as if you'd missed the late one.
No rollover, and no partial payouts.
Funds you haven't claimed by the deadline are gone for good - there's no reinstatement and nothing carries into the next period. Microsoft doesn't pay partial claims either, so a submission that's missing documentation isn't paid at a discount. It's rejected.
Put both claim dates on the same calendar you use for Ignite prep and quarterly business reviews. Then work backward from them and schedule the actual activity dates - a claim for a workshop that hasn't run yet gets bounced.
What's changed
Half the activities now have new names.
Whatever spreadsheet your team built to track FY26 activities is about to be wrong in a handful of spots. Microsoft folded several separate line items into a single new one for FY27.
| FY26 activity | FY27 activity |
|---|---|
| Social media marketing, partner website and search engine, multi-touch digital campaign, direct mail, email and SMS | 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.
This isn't cosmetic. Under FY26 rules, a standalone social boost or a website refresh could carry its own claim. Under Paid media with multi-touch campaign, it can't stand alone anymore - it has to be one part of a connected campaign with a paid anchor.
The activity Microsoft rates highest is also the strictest.
Paid media with multi-touch campaign has a specific shape, and US partners should know it before briefing an agency or an internal team.
Paid media is a required anchor
Every qualifying activity now needs a paid component built in. Microsoft is pushing partners toward demand-generation spend it can actually track, and a paid line item is the clearest proof that spend happened.
Then add supporting activities on top
Choose at least two from this list:
- A dedicated landing page on your partner website
- Email or direct mail
- Blogs or videos
- Search optimization work including SEO, LLMO and GEO
Microsoft is direct about this in the guide: these elements need to run as one coordinated campaign, not a set of unrelated tactics.
Organic social only counts as part of the campaign
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 covers developing a customer case study, which Microsoft recommends feeding straight back into the paid outreach - a healthcare deployment or a financial services rollout tends to land well with US buyers.
Proof of execution is specific
You'll itemize a minimum of three lines on the CSR form: a screenshot of the paid ad, two optional activities backed by 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 FY27 spend split by solution area.
It's guidance, not a mandate - the guide is upfront about that. But it shows you exactly where Microsoft is putting its weight, and aligning to it makes your conversations with Microsoft counterparts a lot smoother. If your plan is still 80% Modern Work because that's the comfortable lane, you're visibly out of step with where the incentive dollars are pointing this year.
Worth knowing too: the guide repeatedly points at ready-made assets - Campaign in a Box, Partner Marketing Center Pro, Cloud Ascent propensity data for targeting. For a US partner working with a tight in-house marketing team, that's a meaningful amount of pre-built campaign scaffolding sitting unused.
As we move through the first half of FY27, many partners are seeing an increase in available co-op funding. Making the most of that investment is critical. With upcoming changes to the incentives program expected to impact funding levels for some partners in H2, now is the time to focus on activities that drive measurable demand, customer engagement and long-term growth. My advice to partners is simple: invest where Microsoft is investing. If your marketing strategy isn't aligned to strategic solution areas such as Premium SKUs, AI, Security and Azure, you could be missing opportunities to maximize both funding and future incentive earnings.
Sabrina Gosney, Microsoft GTM Business Manager, TD SYNNEXNew caps, and one that's about to get tighter.
FY27 introduces spend caps across several activities for CSP and Hosting partners.
| Item | Weighting |
|---|---|
| Allocated resourceFY27 holds this cap steady, though Microsoft has already flagged a cut for 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 one to watch closely. The cap holds at 50% for FY27, but Microsoft has already signaled where it's headed - a cut in FY28 - so US partners shouldn't wait for that guide to land before planning around it.
If half your co-op currently pays for a dedicated marketing hire's salary, you've got roughly a fiscal year to either build the internal case for that role funding itself, or start shifting spend toward activities that'll still qualify once the cap drops. Waiting until the FY28 guide publishes just means finding out the hard way.
One more wrinkle: an allocated resource has to be directly employed or contracted by you, not a third-party subcontractor. A retained marketing agency doesn't qualify under this heading - though agency fees are still eligible under most of the campaign-based activities.
New restrictions on sporting venues and entertainment-led events.
One of the bigger surprises in FY27 is the crackdown on event sponsorships and entertainment-adjacent spend. Microsoft has introduced much tighter guidance around sporting venues, sporting hospitality, entertainment-focused events and premium hospitality experiences - the kind of thing that used to slip through as an "events" claim.
Microsoft wants funding to drive customer adoption, usage and growth, rather than simply reimbursing marketing spend.
Chris Johnston-Leigh, Head of Partner Success, NoteworthyNot sure your planned spend still qualifies?
If you've already got venues, hospitality or event sponsorships booked for FY27, it's worth walking the plan through before you're locked into a contract that co-op won't cover.
The claim rules that will trip you up.
FY27 puts the emphasis squarely on documentation quality, and US partners who skip it will feel it at reimbursement time.
Detailed invoices come first
The guide now prioritizes a detailed third-party invoice, and spells out what "detailed" means: enough for an independent reviewer to tell what activity happened, when it ran, and where. Without that level of detail, you're stuck assembling supplementary POE for every single expense line.
One line item per activity
Every activity or expense needs its own line item on the CSR form, each with its own investment amount, so Microsoft can trace ROI back to specific spend.
One expense, one program
There's no double-dipping: an expense claimed under Microsoft Commerce Incentives can't be claimed under co-op as well.
Travel, meals and mileage
Travel doesn't qualify unless a specific activity says otherwise, and meals and mileage never qualify, no exceptions.
Venue rules for workshops
Workshops need a genuinely business-appropriate venue and a clear educational agenda. Stadiums, sports suites and entertainment venues are ruled out entirely.
Branding rules
Nothing should read as though it's run or sponsored by Microsoft. Your own brand name and contact details need to appear on every demand generation and market development activity.
Creative preapproval.
You can email creative in 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, and it's an easy call: three business days to remove the risk of a rejected claim is a good trade for any US partner working to a fiscal-quarter budget.
What we'd do this month.
- 01
Find out what you've actually got
Log into Partner Center and check your accrued balance in USD and when it expires. Plenty of US partners genuinely have no idea what's sitting there.
- 02
Put both claim deadlines on the calendar
February 15 and August 15, plus the POE approval dates that follow each one.
- 03
Build real multi-touch campaigns
Run paid-first campaigns backed by solid content instead of three disconnected tactics bolted together. It performs better, and it's what the rules require anyway.
- 04
Stress-test allocated resource against next year's lower cap
Work out now what replaces that spend if the cap comes down, rather than scrambling next fiscal year.
- 05
Try preapproval on your first claim
Get the process right once, then repeat it whenever you're unsure about a piece of creative.
Co-op is the least glamorous part of the incentives guide and the easiest money in it.
It's already yours. Nobody has to sign off a business case for it. The only thing standing between a US partner and that spend is a plan and some reasonably clean paperwork.
And yet it consistently turns into an end-of-period scramble - a burst of half-documented claims filed in the two weeks before the deadline, spent on whatever's fastest to execute rather than whatever actually works. That's exactly how a partner ends up in the 43% who use less than half of what they're allocated.
The partners who get real value out of co-op do one thing differently: they plan the marketing first, then claim against it, instead of staring at the balance and asking what it could theoretically cover. Same dollars, very different result.
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.
Lead with paid media on a single solution area
Pick the solution area you actually want to grow - security for a financial services book of business, say - and put a paid media budget behind it with supporting content on the click-through. It's the highest-rated activity and the easiest one to document.
Update the landing pages your campaign drives traffic to
Paid traffic has to land somewhere. Fund the solution page, the proof points and the case studies at the same time so the spend doesn't leak onto a page nobody has touched in two years.
An account-based program into shared targets
Data, creative and targeted media aimed at a named account list you and your Microsoft contacts both care about - state and local government accounts, or a set of regional manufacturers, for instance - instead of broad awareness spend nobody can attribute.
Build customer proof you can reuse for a year
Case studies, video testimonials and a launch push to promote them. One shoot with a US healthcare system or a manufacturing customer funds a quarter's worth of content and gives Microsoft's teams something concrete to point to.
An event backed by a real follow-up plan
Run an event and budget for the two months of follow-up after it, whether that's a regional user group or a presence at Microsoft Ignite. Events claim well; leads that never get a follow-up email don't earn their keep.
Still stuck on more tactical things to push? Here are some suggestions to get you going:
Hero content
Whitepapers, eBooks, guides - educational content that helps customers and prospects recognize a problem they have.
Webinars
Live sessions where customers hear directly about your capabilities and track record, and how Microsoft solutions fit into what they're trying to do.
Assessments
A way for customers to see how they measure up against best practice or benchmark data, surfacing where they need to improve. Works self-serve or with a person walking them through it.
Product demos
Interactive sessions showing customers how the solution would actually work inside their environment.
Key takeaways.
Co-op is money you've already earned in USD - the only real blockers are a plan and clean paperwork.
Two claim deadlines matter this fiscal year: February 15 and August 15, plus the proof-of-execution approval dates behind each.
Paid media with a multi-touch campaign is the activity Microsoft rates highest, and it's the easiest one to document properly.
Allocated resource stays capped at 50% for FY27, but Microsoft has flagged a drop coming in FY28 - start modeling for it now.
Sporting venues, hospitality and entertainment-led events are largely off the table; funding needs to drive adoption, usage and growth instead.
Get detailed third-party invoices with one line item per activity - travel, meals and mileage don't qualify.
Creative preapproval takes three business days and takes the risk of a rejected claim off the table entirely.
Plan the marketing first, then claim the costs back against it - same dollars, a much better outcome.