Check out the latest updates on what managed service providers (MSPs) and managed intelligence providers (MIPs) need to know about Microsoft in October 2026.
Program Updates
CSP Software Price Increase
Starting October 1, 2026, Microsoft introduced a 5% price increase for CSP software subscriptions with annual-term commitments billed monthly. For existing subscriptions on that billing structure, the increase takes effect at renewal on or after October 1, 2026, at midnight UTC.
Affected products include SQL Server, Windows Server, Client Access Licenses and System Center. Annual-term commitments billed annually or upfront, monthly-term commitments billed monthly and perpetual software licensing are outside the scope of the change. The update preserves monthly billing flexibility while aligning pricing across sales channels.
Introducing Growth Margin
This month, Microsoft has unveiled Growth Margin, which programmatically rewards partners whenever they drive qualifying customer growth. Eligibility is evaluated at the customer tenant level and can be earned through three scenarios: new-to-offer, seat expansion or strategic SKU mix.
Base margin remains the standard rate for renewals and ongoing subscriptions. Growth margin is a higher total margin for qualifying growth and already includes base margin, so the two are not stacked.
Eligible CSP license-based offers include select products such as Microsoft 365 Copilot, Microsoft 365 E5, Microsoft 365 E7, Microsoft Defender Suite, Microsoft Purview Suite and Windows 365 Enterprise. Nonprofit, Education and Government SKUs are not eligible. No partner action is needed at this time while Pax8 continues working with Microsoft on implementation.
Microsoft Incentives Refresher
To qualify for Microsoft incentives and rebates, you must be enrolled as a Microsoft CSP Indirect Reseller and in the Microsoft Commerce Incentives program. You’ll also need to meet a $25,000 trailing-12-month revenue threshold at the partner location ID and either attain a Solutions Partner designation, earn 25 capability points in the applicable solution area or hold a Specialization.
For FY27, Microsoft eliminated the core incentive for indirect resellers in Microsoft 365 and Dynamics 365 while retaining strategic and growth accelerators. The Microsoft 365 and Dynamics 365 Growth Accelerator increased from 7.5% in FY26 to 12.5% in FY27 for indirect resellers. Azure growth accelerator rates vary by workload tier at 12%, 10% or 7%.
Microsoft Change of Channel Partner Updates
Microsoft clarified that the following scenarios are no longer considered Change of Channel Partner events:
A customer changes resellers but remains with the same distributor
A reseller changes distributors while maintaining the same customer relationship
Authorization changes where the partner retains the same PGA
You’ll still earn applicable incentives in these scenarios if you meet normal program requirements. Microsoft also confirmed there will be no impact to July earnings as these updates were made before earnings processing.
This is a positive development for Pax8 and our partners. The update removes unintended impacts associated with distributor and reseller transitions while keeping the policy focused on its original goal: rewarding net-new customer growth and value creation rather than partner-to-partner customer transfers.
Promotions and Offers
Current Microsoft promotions include:
- Microsoft 365 E3 three-year offer: 10% off net price for first-time purchases, with a minimum of 100 seats, through December 31, 2026.
- Microsoft 365 E3 one-year targeted offer: 20% off for at least 250 seats, through December 31, 2026.
- Purview Suite for Business Premium: 50% off a one-year term with purchase of a Microsoft 365 Copilot annual subscription, for 10 to 300 seats, through December 31, 2026.
- Microsoft Copilot Business: 15% off a one-year term, up to 300 seats, through December 31, 2026.
- Business Basic and Copilot Business: 25% off a one-year term, up to 300 seats, through December 31, 2026.
- Microsoft 365 Copilot for Nonprofit: promotional tiers range from 15% to 40% based on seat count, through December 31, 2026.
Eligible promotions are applied after checkout through the promotions API and appear in the Pax8 Marketplace as Spiff Price Adjustments. Promotional pricing is applied before margins are calculated and distributed.
Cloud and AI Platforms Update
Azure Promotions
Microsoft enabled Azure promotion capability beginning October 1, with individual promotions to be announced afterward. The promotions are intended primarily for net-new Azure customers and existing customers introducing new workloads, with some offers potentially supporting on-premises-to-cloud migration scenarios. Targeting and eligibility will vary by promotion and will be based on customer tenant eligibility.
Microsoft plans to release a readiness guide for these promotions. Pax8 will continue working with Microsoft to define applicable scenarios, provide enablement and explore integration of Azure promotions into the Pax8 Marketplace.
Azure Flex Spend Plans
Microsoft is testing Flex Spend Plans, a new consumption-based CSP offer construct. With Flex Spend, a customer commits to a defined amount of consumption spend over a term and is billed monthly rather than paying the full amount upfront. The committed amount can be consumed at any pace during the term, and one agreement covers eligible products and services with full-year commitment coverage and auto-renewal.
Flex Spend Plans require an Azure plan and are currently being tested in the CSP sandbox as a preview, not a production offer. Pax8 is validating purchase, billing and reconciliation workflows. No partner action is required, and a release date has not been announced.
Azure Migration Offer
Through December 31, 2026, the Pax8 Azure Migration Offer provides a funded assessment of non-Azure infrastructure and a roadmap for migrating eligible workloads. Global Pax8 partners at the Voyager Alliance Ignite tier or above can qualify after executing a statement of work and Funding Addendum.
If the assessment leads to an Azure deployment within 30 days that reaches at least $200 in monthly Azure consumed revenue and all other requirements are met, Pax8 will issue a one-time $2,000 credit memo. Alliance Members and Azure Government customers are not eligible.
Ready to start? Complete the Azure Migration Offer interest form.
AI Business Solutions Update
Usage-Based Billing on by Default for New Copilot Business Licenses
Effective December 1, 2026, new Microsoft 365 Copilot Business licenses purchased through CSP, including standalone licenses and bundles, include usage-based billing by default. The Azure setup required for usage billed experiences will be included, and the default configuration uses pay-as-you-go billing with a preset monthly limit.
The setup supports eligible usage-based experiences including Copilot Cowork, Work IQ APIs and GitHub Copilot Harness. Brief your sales, support and billing teams accordingly. And be sure to explain usage-based billing options to your customers and include these scenarios in adoption plans.
Meet the New Copilot
Microsoft announced a new Copilot experience organized around Home, Code and Autopilot:
- Home brings Chat and Cowork together and adds Office in Copilot for creating and updating editable Word, Excel and PowerPoint files. It’s rolling out through Frontier in the coming weeks.
- Code lets users describe an app, dashboard, automation or workflow in natural language and have Copilot build it. It is rolling out to Frontier at the end of the month, with broader availability to follow.
- Autopilot, formerly called Scout, is a proactive cloud-hosted agent with its own identity that continues working across Teams and Outlook. It’s expanding to private preview at the end of the month.
Additional announcements include Fabric IQ in Chat and Cowork, Dynamics 365 data in public preview, an IT-managed Plugin Registry and new FinOps for AI spend controls.
Pax8 + Zensai End Customer Enablement Promotion
Through December 31, 2026, partners that enroll before transacting and purchase at least 10 net-new seats of an eligible Copilot offer can receive an equal number of Zensai licenses for one year at no cost. Eligible prerequisite offers include Microsoft 365 Copilot Business, Microsoft 365 Copilot for Nonprofit and the Copilot Business plus Microsoft 365 Business Premium bundle. The matching Zensai licenses must be purchased within 30 days of the original Copilot purchase.
To participate, complete the Pax8 + Zensai interest form.
Copilot in 30
Copilot in 30 gives partners a repeatable way to help first-time Copilot customers evaluate Microsoft 365 Copilot Business. The CSP trial includes 25 users for 30 days and is available in the Pax8 Marketplace. At the end of the term, partners can cancel the trial or convert it to a paid subscription with their choice of quantity, commitment and billing terms.
The motion follows five stages: identify target customers, create a success plan, activate the trial, guide the customer experience and convert successful evaluations to paid seats. The Copilot Success Planner creates a tailored 30-day adoption plan based on a customer’s role and priorities.
The guided experience focuses on one high-value scenario each week: Outlook in week one, meetings in week two, Word, PowerPoint and Excel in week three, and agents in week four. Partners can track trials activated, first-week activation rate, active usage across the trial and conversion to paid seats. Microsoft also provides a launch kit, admin setup guide, customer trial guide, weekly email series and partner microskilling modules.
Review the Copilot in 30 launch kit and partner microskilling.
October Enablement Update
See the October lineup of partner enablement and hands-on labs.
Partner Enablement Sessions
- October 19: Intro to Microsoft 365 Copilot
- October 21: Microsoft 365 Copilot for Nonprofits
- October 21: Intro to Microsoft Fabric
- October 26: Microsoft 365 Security for Nonprofits
Hands-On Labs
- October 13: Identity Governance with Entra
- October 15: Microsoft Fabric – Chat
- October 20: Copilot Agents
- October 22: Nerdio Manager for MSP
- October 29: Migrate & Modernize SQL to Azure
Bootcamps:
- October 28-29: Copilot Bootcamp
- November 4-5: Modern Workplace Bootcamp
Follow all of our events here.
Live Certification Prep and Skilling
Pax8 and Microsoft are offering live, instructor-led certification prep for SC-300, Microsoft Identity and Access Administrator Associate October 19–22. Register through Pax8 Academy.
The Frontier Transformation Engineer Badge combines required certifications, Microsoft IQ learning paths and engineering practices to help partners deliver AI transformation. Required certifications include GH-300, AI-102 or AI-103 and AB-100. Pax8 plans to host aligned certification-prep classes and training beginning in November.
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