Microsoft Partner Chief Dezen Says Eligibility Changes Helps Build Customer Trust

‘These new authorization requirements are part of that work to ensure that we have a very high bar for quality and capability,’ Microsoft Chief Partner Officer Nicole Dezen says.

Nicole Dezen, Microsoft’s chief partner officer and corporate vice president for the Global Partner Solutions organization, sees upcoming eligibility changes for the vendor’s solution providers and distributors as building more customer trust in partners

“Part of that trust means having an incredibly high bar for quality and capability so that when customers make that choice of a partner of Microsoft, they can have the utmost confidence that they are selecting a partner and provider that can deliver all the value that they need for the entirety of their business, including AI transformation,” Dezen told CRN in an interview.

She continued: “We very regularly look at our business requirements across the board. These new authorization requirements are part of that work to ensure that we have a very high bar for quality and capability.”

Dezen spoke with CRN after Microsoft published plans for increasing some of the eligibility and authorization requirements for a variety of partner types Oct. 1, notably more than tripling revenue rules for direct bill partners and starting to enforce revenue demands for indirect resellers.

[RELATED: Microsoft Plans New Eligibility Rules For Resellers, Distributors]

Microsoft CSP Changes

Kathy Durfee, CEO of Lakewood Ranch, Fla.-based Microsoft partner TechHouse, told CRN in an interview that she is still going through the new requirements and what they mean for her business. But she suspects not every direct bill partner can meet the new eligibility requirements, meaning some will have to become indirect resellers.

“I believe we will survive as direct,” she said. “But wow, [$1 million] is a big number.”

Meanwhile, Dezen told CRN that the other major partner program change announced–three-year subscription offers for its E3 and higher-priced E5 licenses on June 1, with three-year subscriptions becoming available July 1 for Microsoft 365 E5 Security and E5 Compliance mini suites–was in high demand by partners working to switch customers from Enterprise Agreements (EAs) to the Cloud Solution Provider (CSP) program.

And when asked for advice for solution providers working with customers particularly hit by economic uncertainty amid global tariff negotiations, Dezen said that “it’s the perfect time for partners to have a holistic conversation with customers about their business needs.”

“Our CSP partners have the very best capability to address the full life cycle of customer requirements,” she said. “They can help them ensure that they have the most modern capabilities in their business, that they’re really maximizing the value of their IT investments through the portfolio of Microsoft’s solution areas.”

When asked if the changes are related to Microsoft CFO Amy Hood’s references on the past two quarterly earnings calls to issues with Microsoft’s partner sales motion eating into Azure revenue, Dezen said she is “thrilled to see the way that partners are contributing to Microsoft’s success.”

“The announcements that we made … are another set of investments we’re making to enable partners to continue to do that with us,” she said.

Here’s more of what Dezen had to say about the CSP changes, the changing economy and other subjects–edited for length and clarity.

What do you want partners to know about the upcoming program changes?

This is all designed to fuel growth in the small and medium enterprise customer segment through our partners.

It included the much-anticipated three-year CSP (Cloud Solution Provider) SKU (stock-keeping unit), which I’m really thrilled about. We had requests from partners to be able to do this.

(On the eligibility requirements), it’s fundamentally important that customers can trust the partners with whom they do business.

Part of that trust means having an incredibly high bar for quality and capability so that when customers make that choice of a partner of Microsoft, they can have the utmost confidence that they are selecting a partner and provider that can deliver all the value that they need for the entirety of their business, including AI transformation.

We very regularly look at our business requirements across the board. These new authorization requirements are part of that work to ensure that we have a very high bar for quality and capability. This will help our partners to continue to deliver very meaningful business outcomes. And it’s also a great way to ensure that the partners that are doing the very best work on behalf of Microsoft for our customers have meaningful TAM (total addressable market) capture opportunities in every market in which they operate.

Is Microsoft more focused on smaller customers or larger ones?

All of the investments that we’ve made, frankly, throughout this fiscal year are a reflection of our commitment to increase our focus on serving SMB and corporate customers through our partners and we continue to deliver a wealth of investment to service the enterprise. So it’s an ‘and,’ not an ‘or.’

I think about the investments that we’ve made that point to our commitment to delivering value to the small and medium enterprise customer segment through CSP partners. It’s things like the decision we made to move 70 percent of our partner incentives to the partners that are dedicated to serving this small and medium enterprise customer segment.

We want partners to be able to enjoy the right economics in order to be able to serve these customers. It’s a huge responsibility and really important to ensure that partners have healthy, durable, profitable businesses in their pursuits with Microsoft.

We’ve also pooled our incentives around Microsoft’s five priorities. And the thing I love about the five priorities is they apply to every customer segment, every partner type. And they’re enduring.

Copilots for every customer, AI design win, securing the cyber foundation for customers, delivering the core of M365 (the Microsoft 365 package of productivity applications) and, of course, cloud migrations.

Those things all work and complement one another. And I’m excited to say we’re continuing them in our fiscal ‘26. That’s a reflection of the benefit we’re seeing in the market to customers as well as to our partners.

It’s also a really good way that Microsoft and our partners can go to market together in harmony.

The reason that we’re making investments that are so focused on the small and medium enterprise segment is because there is a $661 billion TAM in this space.

That is a meaningful opportunity for Microsoft and our CSP partners to serve these customers.

I fundamentally believe that the CSP partners that we have are best equipped to deliver the entire life cycle of solutions that these customers need through a set of highly trusted, capable partners.

How should your reseller, services partners think about continued investment in distributors and external resources?

Our distribution partners are world class at delivering all of the capability on Microsoft’s platform and delivering meaningful value to help their resellers grow their business.

So what they do that I think is a mark of excellence is they ingest all of the enablement we provide to them through the Microsoft AI Cloud Partner Program–the benefits, the skilling, the designations and specializations, the go-to-market capability and our incentives–and they package that in a way that’s extraordinarily consumable for their reseller channel.

This, to me, is one plus one equals three. You will see us invest even more heavily in distribution and our fiscal ‘26. I’m very proud of what I see in the market. There are so many examples of distribution partners truly bringing the very best of Microsoft. They are their own customer zero.

(Arrow Electronics’ ArrowSphere life cycle management offer) is outstanding and is a great example of understanding the needs of their reseller partners.

It’s built on Azure. It’s built on Azure OpenAI. It enables Copilot. It enables (Copilot) Chat. It enables agents to help their partners deliver value to their Microsoft customers.

TD Synnex, Ingram Micro, Pax8. I could spend hours singing the praises of the way that our distribution partners are embracing new technology, embracing Microsoft’s AI platform and enabling their partners to deliver, really, the best of Microsoft through that distribution, partners capability, set.

What should partners do if they have concerns before Microsoft implements these changes?

Please keep the feedback coming.

The majority of capabilities that we introduced … are a reflection of how we’ve internalized partner feedback.

A great example of this are the SMB designations. Just in the last couple of months, we introduced SMB designations for Azure and security, all based on partner feedback. Partners are asking us to ensure that we can really distill and spotlight the partners that uniquely serve the needs of small and medium business customers.

This market segment is so important. And it was really important to us to be able to curate a set of capable partners that are deeply focused on the needs of SMBs. And these new designations are fairly recent in market. But the response and the momentum has been remarkable.

What our partners should expect to see is more curated work based upon unique customer segment and market service needs. We’ll continue to roll those throughout the calendar year.

For the three-year SKU, does this reflect what customers want?

The three-year SKU was much requested. And it’s really a reflection of introducing capability so that partners can meet customers needs, wherever they may be.

There are many customers that are comfortable and accustomed to making three-year commitments to Microsoft through the Enterprise Agreement. And so this made so much sense to be able to have a set of CSP SKUs that can also meet those customers’ needs.

The thing that’s really exciting about what the CSP partners are doing is they’re really pairing the work that they do with excellence on Microsoft’s platform with their own unique services, solutions and capabilities.

This allows them to deliver securely at scale and with differentiated offers. The partners that I see that are truly achieving excellence here are the ones that have embraced delivering the entire customer life cycle.

This is where you’ll see us continue to focus throughout this calendar year, making additional investments and incentives to support these partners to deliver this kind of value to customers.

How should partners work with customers especially hit by global tariff and economic impacts?

It’s the perfect time for partners to have a holistic conversation with customers about their business needs.

Our CSP partners have the very best capability to address the full life cycle of customer requirements. They can help them ensure that they have the most modern capabilities in their business, that they’re really maximizing the value of their IT investments through the portfolio of Microsoft’s solution areas.

These are partners that have the unique capability of delivering all of this as a managed service. And then, of course, they can deliver AI transformation.

The thing that’s really magical about what our partners are delivering through AI transformation is this is where you see them working with their customers to enrich employee experiences, enhance their customer capabilities, to optimize business processes, and then ultimately to bend the curve on innovation. And we see examples across all four of those dimensions.

The best way that any partner and customer can begin to experience the benefits of Microsoft’s AI platform is through Copilot Chat. It’s free.

You get all of the benefits of the Microsoft Graph, all of Microsoft’s investments in security and capability.

And then at the same time, our partners and customers can begin their capability building agents. And that spins the Azure meter when they do that.

It’s a very easy, very friction-free way to get started. It’s been really inspiring to see the ways that our partners are introducing that in their own environment to get capable and skilled and expert in building agents. And then they’re bringing that out to our customers around the world.

The AI assistant is a good example of Microsoft investing in Partner Center technical capabilities, right?

We are investing a ton of innovation in capability in our systems or tools and reporting.

It’s a great example of Microsoft being our own customer zero. We’re using our own technology to enhance the way that we work and as an extension the way that our partners work.

Anytime that we can add AI capability to streamline how we sell, how our partners sell, enable us to go to market together most effectively and enhance the overall experience for Microsoft, our partners and our customers, I think that’s a huge win.

The combination of the work that we do day in and day out with the partner ecosystem to enable them through the Microsoft AI Cloud Partner Program, giving them the full complement and portfolio of skilling benefits capabilities to ensure that they can meet the very, very high expectations of our customers–combining that with our authorization requirements should give customers very high confidence that Microsoft will continue to be a place that has the highest expectations of excellence, quality, security and capability.

Along with Microsoft’s AI products, what else do partners need to talk to customers about?

The very best thing that our partners can do immediately is talk to their customers about their security posture and ensure that customers understand the capabilities that Microsoft partners can deliver to them.

That is what creates the strongest foundation for cloud migrations, for all of the AI capability that customers need to enrich their own employee experiences, to deliver meaningful value to customers and shareholders, and then fully optimize their business processes. It all starts with a strong security foundation.

I’m incredibly proud of the work that we do with our partners that are true security experts. And we continue to pour investment and innovation into skilling and readying these partners to meet the expectations of the market.

Will partners have more to look forward to when Microsoft starts its next fiscal year in July?

Absolutely. I’m going to encourage all of our partners to stay tuned for registration to open for our MCAPS (Microsoft Customer and Partner Solutions) Start for Partners event on July 15.

This is where we will introduce all the new capabilities, offers, investments for our fiscal ‘26.

It happens at the exact same time that we do our own internal seller readiness. So it’s another example of the way that we view our partners as an extension of our sales force.

There are some very exciting things to come.

Any capability, skilling, product access that we provide to our sellers, we equally provide to our partners who work hand in glove, as an example, with our worldwide learning team to make sure that the skilling access is the same.

We’ve made record investments this fiscal year in partner skilling all around our technology–both through the lens of the business of the technology, being able to articulate the business value of Copilots, as well as the very deep technical expertise required to understand the customer’s environment, architecture, deploy it with excellence and deliver fast value realization to these customers.