May 2025 Microsoft Partner Center Announcement

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Critical Deadlines and Actions

• April 11, 2025: New, enhanced MCA attestation API available in sandbox.
• May 14-15, 2025: CSP Technical Training and Partner Q&A Community Call for POR changes.
• May 16, 2025: European Commission public market test initiated for proposed EU settlement.
• May 31, 2025: Microsoft Certified: Information Protection Administrator Associate certification retires.
• June 1, 2025:Three-year subscription terms for Microsoft 365 E3/E5 (no Teams) and Teams Enterprise GA in CSP.
• End of Sale (EOS) for Microsoft 365 E3/E5 (with Teams) three-year SKUs.
• June 2, 2025: Changes to Partner of Record (POR) assignment for CSP resellers implemented.
• June 9, 2025: Microsoft 365 E3/E5 (with and without Teams) 10% discount promotions go live.
• June 30, 2025: 15% discount promotion for Microsoft 365 Copilot in CSP extended to this date.
• July 1, 2025:Microsoft 365 Business Premium & Office 365 E1 grant discontinuation for nonprofits upon next renewal.
• MCA bulk attestation capability retired; tool becomes read-only.
• Three-year subscription terms for Microsoft 365 E5 Security and E5 Compliance mini suites available.
• E5 Security and E5 Compliance mini suite promotion goes live.
• October 1, 2025: New CSP authorization requirements and CSP incentive eligibility requirements go into effect.
• October 7, 2025:Blocking changes for net new customer orders unless MCA is accepted directly or via enhanced API.
• Existing MCA attestation API and Partner Center UX retired.
• December 31, 2025: End date for Microsoft 365 E3/E5 promotions and E5 Security/Compliance mini suite promotions.
• January 2026: MCA bulk attestation tool fully retired.
• March 31, 2026: Azure Data Engineer Associate certification remains valid until this date (for those who hold it).
• May 31, 2026: Information Protection Administrator Associate certificate remains valid until this date (for those who obtained it before retirement).

What are the key updates for Microsoft partners?

Microsoft 365 Business Premium and Office 365 E1 grants on CSP and Web Direct Channels will be discontinued for nonprofit customers upon their next renewal date on or after July 1, 2025. This means nonprofits will no longer receive these specific grants.

Beginning June 2, 2025, the PLA API and UI will be updated to ensure distributors assign only authorized, active, and compliant indirect resellers as Partner of Record (POR) on new CSP subscriptions. This aims to enforce compliance with CSP POR policies.

Beginning October 7, 2025, the MCA can only be accepted through a new, enhanced partner attestation API or direct customer acceptance. The current API and Partner Center UX will be retired, and the bulk attestation tool will become read-only after July 1, 2025, to improve compliance and security.

1. To support nonprofits during this transition, Microsoft will continue to offer up to 300 granted licenses of Microsoft 365 Business Basic and discounts up to 75 percent on many Microsoft 365 nonprofit offers, including the discontinued grant products. This aims to ease the financial burden for these organizations.
2. The European Commission's investigation concerns Microsoft's inclusion of Microsoft Teams with Microsoft 365 and Office 365 suites, and a public market test is underway for a proposed settlement. If accepted, this agreement would require Microsoft to adjust its pricing and discounting policies for these commercial offerings.
3. Partners are requested to take no proactive action at this time regarding the proposed settlement with the European Commission. They may refer customers to Microsoft’s official statement, but the terms are not yet final and may change.
4. Microsoft is enforcing multifactor authentication (MFA) for all users signing into the Microsoft 365 admin center portal. This is a crucial step to enhance security measures across the partner ecosystem.
5. The new three-year subscription terms for Microsoft 365 E3, E5, and Teams Enterprise in CSP aim to provide a more consistent experience across purchasing channels and support partners in driving renewals, upgrades, customer retention, upsell, and business scaling, particularly for small and medium enterprise segments.
6. Two new authorization requirements for direct bill partners beginning October 1, 2025, include transacting as an indirect reseller for at least 12 months before applying and having a minimum of $1 million USD in CSP billed revenue at the Partner Global Account (PGA) level. They must also pass an automated operational capabilities assessment.
7. Microsoft states that it does not pay incentives for revenue, tenant, and subscription movements between CSP partners, as incentives are not intended for CSP partner-to-CSP partner transfers. COCP activity is being monitored, and future policy updates may result in adjustment of incentive payments or termination of applicable incentives if not in line with shared goals.

What changes are being made to Microsoft 365 and Office 365 grants for nonprofit customers?

As of July 1, 2025, upon their next renewal, the Microsoft 365 Business Premium and Office 365 E1 grants on CSP and Web Direct Channels will no longer be available for nonprofit customers. To support nonprofits during this transition, Microsoft will continue to offer up to 300 granted licenses of Microsoft 365 Business Basic and discounts of up to 75% on various Microsoft 365 nonprofit offers, including Business Premium and Office 365 E1.

What is the proposed settlement with the European Commission regarding Microsoft 365 and Teams?

The European Commission initiated a public market test on May 16, 2025, for a proposed settlement with Microsoft concerning the bundling of Microsoft Teams with Microsoft 365 and Office 365 suites. If accepted, the agreement will require Microsoft to modify its pricing and discounting policies for commercial Microsoft 365 and Teams offerings.

Partners are advised against proactive action as the terms are not yet final and may change. Customers concerned about renewing or signing contracts before finalization are assured they will still benefit from the agreement's terms once it goes into effect.

What new security measures are Microsoft partners required to implement?

Microsoft is rolling out several security updates for partners. These include the deprecation of graph.windows.net audience tokens, requiring partners to update how they interact with Partner Center APIs.

Additionally, Microsoft is enforcing multifactor authentication (MFA) for all users signing into the Microsoft 365 admin center portal. Partners are encouraged to sign up for CSP Community calls and dedicated CSP Technical Training for more information and support.

What changes are being made to the Partner of Record (POR) assignment process for CSP resellers?

Beginning June 2, 2025, Microsoft will update the Partner Location Account (PLA) API and UI in Partner Center to ensure that distributors can only assign active, compliant indirect resellers as the Partner of Record for new Cloud Solution Provider (CSP) subscriptions.

To avoid disruption, indirect resellers must have a valid CSP authorization, an active tenant, be associated with a valid PLA ID, and be located in the same geographic region as their indirect provider CSP region. Distributors need to review CSP overviews, test POR assignments in sandbox environments, and work with resellers to ensure compliance.

How is Microsoft changing the attestation process for the Microsoft Customer Agreement (MCA)?

To improve compliance and security, Microsoft is changing the MCA attestation process for net new customer orders. Starting October 7, 2025, partners will only be able to attest to the MCA using a new, enhanced API or through direct customer acceptance. The current API and the Partner Center UX attestation options will be retired.

Additionally, the bulk attestation capability of the MCA bulk attestation tool will be retired on July 1, 2025, becoming read-only until its full retirement in January 2026. Partners not integrating the new API by October 7, 2025, will require net new customers to accept the MCA directly via the Microsoft 365 admin center.

What new billing flexibility options are available in Microsoft's commercial marketplace?

Microsoft's commercial marketplace now supports flexible billing schedules through private offers, allowing partners to align billing with their customers' budget cycles and purchasing preferences without impacting invoice cycles.

This new capability is available globally for SaaS products, VM software reservations, and Professional Services. Partners can utilize Microsoft's private offer submission API to create these flexible schedules.

What are the latest updates to the Microsoft AI Cloud Partner Program?

The Microsoft AI Cloud Partner Program has introduced several updates. SMB paths are now available for Solutions Partner designations in Data & AI (Azure), Digital & App Innovation (Azure), Infrastructure (Azure), and Security. European and Non-European versions of Microsoft 365 and Teams Enterprise benefits are now available on Partner Center.

A new Azure Specialization V.Next for Build AI Apps offers an alternative path to meet audit requirements by utilizing existing completed projects from the Azure Innovate partner-led program. Performance and skilling requirements for the "Infrastructure and Database Migration to Microsoft Azure" specialization have been updated, including the addition of the Azure Security Engineer Associate certification. Renewals for the MAICPP Training Services Designation are also open for eligible partners.

What new subscription terms and promotions are being introduced for Microsoft 365 E3 and E5 in CSP?

Beginning June 1, 2025, Microsoft will offer three-year subscription terms for Microsoft 365 E3, Microsoft 365 E5 (with and without Teams), and Teams Enterprise in CSP. These new terms require upfront or triennial/annual billing and a minimum purchase of 100 licenses.

From July 1, 2025, three-year subscriptions for Microsoft 365 E5 Security and E5 Compliance mini-suites will also be available. To encourage adoption, Microsoft is launching new 10% discount promotions for new-to-E3 or new-to-E5 customers on these three-year terms from June 9 to December 31, 2025, and a 15% discount for Microsoft 365 Copilot in CSP is extended through June 30, 2025.

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Details and Key Actions

1. Nonprofit Grant Discontinuation for M365 Business Premium & O365 E1

• Key Fact: "The Microsoft 365 Business Premium grant and Office 365 E1 grant on CSP and Web Direct Channels will be discontinued for nonprofit customers upon their next renewal date on or after July 1, 2025."
• Impact: Nonprofits currently on these grants will no longer receive them for free.
• Mitigation: Microsoft continues to offer "Up to 300 granted licenses of Microsoft 365 Business Basic" and "Discounts up to 75 percent on many Microsoft 365 nonprofit offers, including Microsoft 365 Business Premium and Office 365 E1."
• Action: Partners with nonprofit customers should prepare for this transition and inform affected clients about the alternative offers.

2. Proposed Settlement with European Commission: M365 and Teams

• Key Fact: "The European Commission initiated a public market test on May 16, 2025, for a proposed settlement agreement with Microsoft in its investigation regarding Microsoft’s inclusion of Microsoft Teams with Microsoft 365 and Office 365 suites."
• Impact: If accepted, "the terms of the agreement require Microsoft to make changes to pricing and discounting policies for commercial Microsoft 365 and Teams offerings."
• Current Status: The terms are not final and may change. There's no fixed timeline.
• Action: Partners should "take no proactive action at this time" but can "refer customers to Microsoft’s official statement."

3. Monthly Update: Important Actions Partners Need to Take to Secure the Partner Ecosystem

• Theme: Enhancing security posture across the partner ecosystem.
• Key Updates: Deprecation of graph.windows.net audience tokens: Requires partners to update their interaction with Partner Center APIs.
• MFA for M365 admin center: Microsoft is "enforcing multifactor authentication (MFA) for all users signing into Microsoft 365 admin center portal."
• Action: Partners must implement these security measures to maintain access and protect customer tenants.

4. Reminder: Changes to Partner of Record (POR) Assignment for CSP Resellers

• Key Fact: "Beginning June 2, 2025, we implement changes to the PLA API and UI to help distributors (formerly indirect providers) assign only authorized indirect resellers as Partner of Record (POR) on new Cloud Solution Provider (CSP) subscriptions."
• Compliance: Both the API and UI will "check if the reseller is in compliance with the reseller’s authorization terms."
• Action for Indirect Resellers: Must "Have a valid CSP authorization and an active tenant," "Be associated with a valid PLA ID," and "Be located in the same geographic region as the indirect provider CSP region."
• Action for Distributors: Review CSP overview, test POR assignments in sandbox, and use the Insights dashboard to identify and correct invalid PORs.

5. Microsoft Customer Agreement Partner Attestation Blocking Changes

• Key Fact: "Beginning October 7, 2025, Microsoft will block orders for net new customer purchases, unless the customer directly accepted, or the partner attested using an enhanced API."
• Reason: "Audit findings show that some partners struggle to provide proof that customers accepted agreements, which can cause regulatory, copyright, and security issues."
• Changes:Retirement of the existing API and Partner Center UX-based attestation on October 7, 2025.
• A new, "more compliant API-based attestation method" is available in sandbox since April 11, 2025.
• The MCA bulk attestation tool will become read-only after July 1, 2025, and retired in January 2026.
• Action: Partners must integrate the new, enhanced API by October 7, 2025, or their net new customers will need to directly accept the MCA via the Microsoft 365 admin center.

6. May Cloud Solution Provider (CSP) Monthly Updates and Community Reminder

• Theme: Ongoing communication and resource availability for CSP partners.
• Resources: Partner launch calendars, CSP Bimonthly Update newsletter, Partner Journey Maps, monthly CSP spotlight webinars.
• Engagement: Monthly CSP community Q&A sessions are available for operational questions.
• Action: Partners are encouraged to regularly review these resources and participate in community calls to stay informed.

7. Flexible Billing Schedules Through Private Offers are Now Generally Available

• Key Fact: "Microsoft’s commercial marketplace now offers flexible billing improvements through private offers to better align with customer needs."
• Benefit: Partners can "create private offers with flexible billing schedules to align with their customers’ budget cycles and purchasing preferences, enabling personalized billing without affecting invoice cycles."
• Applicability: Supported for SaaS products, VM software reservations, and Professional Services.
• Action: Partners can leverage this feature to enhance customer relationships and streamline purchasing.

8. Monthly Microsoft AI Cloud Partner Program Update

• Theme: Differentiation through technical expertise and expanded benefits.
• Key Updates: SMB Paths for Solutions Partner Designations: Now available for Data & AI (Azure), Digital & App Innovation (Azure), Infrastructure (Azure), and Security.
• European & Non-European Version for M365 & Teams Enterprise benefits: Partners must select the correct regional version for product benefits based on tenant location (EEA/Switzerland vs. Non-EEA).
• New Azure Specialization V.Next for Build AI Apps: An alternative path to meet Module B audit requirements using completed Azure Innovate Partner-led engagements (3 qualified engagements, post-sales, Medium/Large size, $300 per pillar).
• Updates to Infrastructure and Database Migration to Microsoft Azure Specialization: Revised requirements focusing on either Windows/Linux and SQL/OSS databases, increased certified individuals to four, and added Azure Security Engineer Associate certification. Azure Database Administrator Associate certificate replaces the expiring Azure Data Engineer Associate.
• Renewals for MAICPP Training Services Designation: Partners can renew their TSP Designations within their enrollment window.
• More Benefits with Solutions Partner Certified Software Designations: Top-tier benefits are available for certified software designations in Azure, Security, and Industry AI (Healthcare AI, Retail AI, Financial Services AI, Manufacturing AI, Sustainability AI). Subsidies are offered for third-party auditor assessments.
• Upcoming Skilling Changes: Expiring certifications in Analytics, Data Warehouse Migration, and Migrate Enterprise Applications specializations, replaced by Fabric Data Engineer Associate and SC-401 "Information Security Administrator" (for Security Information Protection and Governance Specialization).
• Action: Partners should review updated requirements for specializations and designations, assess new SMB paths, and plan for certification updates to maintain eligibility and benefits.

9. Three-Year Subscription Terms for Microsoft 365 E3 and E5 Coming to CSP

• Key Fact: "On June 1, 2025, we expect to launch three-year subscription terms for E3 and E5, with or without Teams, and Teams Enterprise in CSP."
• Billing Options: Only available for purchase with three-year upfront or triennial/annual billing.
• Minimum Purchase: 100 licenses (enforced at the SKU level).
• End of Sale (EOS): Microsoft 365 E3 with Teams and E5 with Teams on three-year terms will be EOS on June 1, 2025, but customers can change existing EOS subscriptions to new three-year terms.
• New Promotions:10% discount: For new-to-E3 or new-to-E5 customers on new CSP three-year subscriptions (June 9 - Dec 31, 2025; Min 100, Max 2,400 licenses).
• 15% discount: Extended for Microsoft 365 Copilot in CSP through June 30, 2025.
• E5 Security and E5 Compliance mini suite promotion: Starting July 1, 2025 (Min 100, Max 1M licenses).
• Action: Partners should understand these new terms and promotions to drive renewals, upgrades, and upsells, especially for enterprise customers.

10. Requirement Updates for CSP Partners

• Theme: Strengthening the CSP ecosystem through stricter authorization and incentive eligibility requirements.
• Effective Date: Beginning October 1, 2025 (may vary based on new applicant vs. existing partner).
• New FY26 Requirements: Direct Bill Partners: 12 months as indirect reseller, business vetting, $1M USD TTM CSP billed revenue, automated operational capabilities assessment, active Advanced/Premier Support, Partner Center security score, at least one Solutions Partner designation, accept direct bill MPA.
• Distributors: Microsoft nomination/approval, business vetting, $30M USD TTM CSP billed revenue per region, automated operational capabilities assessment, active Advanced/Premier Support, Partner Center security score, accept Distributor MPA.
• Indirect Resellers: Business vetting, $1K USD TTM billed revenue at reseller tenant level, Partner Center security score, accept Indirect Reseller MPA.
• Enhanced CSP Incentives Eligibility (FY26): Aligns incentives with Solutions Partner designations or partner capability scores and revenue thresholds.
• Direct Bill: CSP authorization, $1M USD TTM revenue, at least one Solutions Partner designation.
• Indirect Reseller: CSP authorization, Solutions Partner designation OR 25 partner capability points in each solution area, $25K USD TTM revenue for all solution area incentives.
• Change of Channel Partner (COCP) Activity: Microsoft will monitor COCP activity for incentive payments. "Microsoft doesn't pay incentives for revenue, tenant, subscription movements between CSP partners." This is an "early policy signal" with monitoring currently in effect, but no immediate impact on incentives.
• Action: All CSP partners must review and meet the new authorization and incentive eligibility requirements to maintain their status and continue earning incentives. Partners should also be aware of the COCP monitoring.

Recommendations

• Review and Adapt: Thoroughly understand the changes to nonprofit grants, EU settlement implications, and new CSP authorization/incentive requirements.
• Enhance Security: Implement mandatory MFA for M365 admin center and prepare for graph.windows.net token deprecation.
• Update Processes: Adapt to new POR assignment rules and the streamlined MCA attestation process by integrating the new API or preparing for direct customer acceptance.
• Leverage New Offers: Explore flexible billing options for private offers and new three-year subscription terms for Microsoft 365 E3/E5/Teams Enterprise, along with associated promotions.
• Invest in Skilling: Pursue new SMB paths for Solutions Partner designations, update specializations (especially Infrastructure and Database Migration), and plan for upcoming certification changes.
• Stay Informed: Regularly engage with Microsoft's partner resources, including launch calendars, newsletters, and community calls, especially for the CSP program and AI Cloud Partner Program.
• Monitor COCP: Be aware that Microsoft is monitoring Change of Channel Partner activity and how it might impact incentives in the future.

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