Maximize Your Microsoft Partnership

How to capitalize on Microsoft’s FY26 updates

Microsoft is unveiling significant updates for the fiscal year 2026 (FY26)—from newly defined solution areas and partner program changes, to fresh incentives that can help partners scale smarter and faster. For Microsoft partners, understanding and leveraging Microsoft’s evolving strategies is essential to unlock growth and maximize profitability.

In this blog, we dive into the latest shifts and opportunities that every Microsoft partner—and their customers—should know about. You’ll learn how you can take advantage of Microsoft’s new fiscal year announcements, focusing on AI business solutions, cloud and AI platforms, and security.

Whether you sell Microsoft solutions directly or through the AppDirect platform, this blog equips you with the knowledge and strategies needed to thrive in the dynamic Microsoft ecosystem.

About this article

This article draws on some of the insights that Microsoft will share on this topic during a session at our Thrive 2025 conference in August, August 25-25.

Find many other articles covering more than 20 Thrive topics on our blog page.

Understanding Microsoft’s strategic shift into new solution areas

Microsoft’s FY26 marks a pivotal moment, emphasizing three strategic solution areas designed to help partners capture emerging markets and accelerate growth.

Microsoft is shifting from broad platform offerings toward a more focused approach centered on three strategic solution areas:

• AI business solutions

• Cloud and AI platforms

• Security

This reflects a move away from product silos towards integrated, AI-powered solutions that better meet evolving market demands—especially in SMB and SME segments seeking automation, cloud modernization, and cybersecurity.

Here’s a closer look at what this means for you, and how you can capitalize on these important changes.

Microsoft AI Business Solutions

Artificial intelligence is now at the heart of Microsoft’s innovation strategy, with powerful tools that are driving smarter, more intuitive business applications.

Microsoft AI Business solutions offer ready-to-use business software aimed at end users. They’re built around Microsoft 365, Dynamics 365, and the new wave of Copilot integrations that embed AI capabilities across roles and devices. AI Business Solutions aim to empower businesses to automate workflows, enhance productivity, and gain actionable insights directly within end-user tools—enabling users to work smarter within familiar applications.

What this means

• AI business solutions bring AI benefits directly to end users across roles—automating tasks, enhancing decision making, and transforming workflows

• Copilot Studio empowers partners and customers to build tailored AI applications, unlocking custom use cases and driving innovation

• Partners can identify AI readiness within their customer base using the Microsoft Sales Advisor tool, enabling them to strategically introduce AI solutions

• Microsoft incentivizes AI solution adoption through targeted programs and promotions, providing financial and marketing support

Key partner action points

• Enhance skills and certification—Leverage Microsoft’s Skilling Hub, which offers courses and learning paths focused on AI, security, and cloud modernization

• Become a Copilot specialist—Develop deep expertise in AI implementations, positioning yourself as a trusted advisor for customers looking to adopt Copilot-driven solutions. See Microsoft Copilot Skilling for details

• Promote AI-driven value— Focus customer conversations on AI’s ROI benefits like increased productivity, automation, and improved business outcomes

Key takeaway

By embracing AI business solutions now, partners can seize one of the fastest-growing technology waves—driving meaningful customer transformation, differentiating their offerings, and capturing increased recurring revenue in a rapidly evolving market.

Microsoft cloud & AI platforms

Cloud and AI platforms form the backbone of digital transformation initiatives, providing the technical infrastructure and tools necessary for building scalable, innovative AI solutions. Microsoft Azure remains a preferred platform for SMBs and enterprises modernizing their IT environments to support AI workloads, data analytics, and scalable applications.

This solution area encompasses Microsoft Azure, AI infrastructure, and Frontier AI technologies, including Copilot Studio. Here, Copilot Studio serves as a platform-level capability that empowers partners and customers to build custom AI-enabled applications on top of Azure. Unlike packaged AI business applications, Copilot Studio focuses on the underlying development tools and infrastructure that enable tailored AI solutions, extensions, and innovation at scale.

As global AI adoption accelerates, this category positions partners to lead cloud migrations, modernization efforts, and AI-driven innovation. It unlocks new revenue streams by delivering scalable, cloud-native AI platforms and enabling the creation of bespoke AI applications that extend beyond out-of-the-box business tools.

What this means

• Azure integrations with AI solutions enable enterprises to rapidly deploy and scale innovations, meeting evolving business demands.

• Frontier AI and Copilot Studio provide platforms for custom AI-driven applications tailored to unique customer needs.

• Cloud modernization improves business agility, cost efficiency, and supports multi-cloud strategies to reduce vendor lock-in.

Key partner action points

• Promote Azure migration and modernization projects as foundational to digital transformation.

• Upskill teams on Azure AI services and Frontier AI capabilities to build innovative customer solutions.

• Leverage Copilot Studio for creating bespoke AI applications and demonstrate tangible business value.

• Emphasize cloud agility and scalability as competitive advantages in partner pitches.

Key takeaway

Cloud and AI platforms empower partners to lead digital transformation by enabling scalable, custom AI innovations and cloud modernization that meet critical customer needs—unlocking new revenue streams and future-proofing their business.

Microsoft security solutions

Microsoft’s security solutions enable partners to offer vital end-to-end protection, compliance, and data sovereignty, reinforced by Sovereign Cloud offerings. Partners can differentiate themselves by delivering advanced security services that underpin digital trust and compliance.

What this means

• Microsoft is expanding security incentives and funding substantially within the CSP (Cloud Solution Provider) channel to encourage partners to grow their security practices

• Sovereign Cloud and enhanced compliance certifications provide opportunities for partners working with regulated industries with strict data residency requirements

• Security is a foundational element in Microsoft’s FY26 strategy, ensuring all cloud and AI solutions integrate robust protection

Key partner action points

• Get trained and certified—Participate in bootcamps like the Level Up CSP Security Sales Bootcamp to deepen your security sales capabilities

• Leverage AppDirect—Use the AppDirect Marketplace to access and bundle Microsoft security solutions, enabling easier subscription management and billing

• Position security as a business enabler—Help your customers understand how security investments reduce risk and enable digital transformation confidently. Access this comprehensive cybersecurity ebook for an immersive guide on security risks and strategies.

Key takeaway

Focusing on security not only protects customers in an increasingly complex threat landscape but also enables partners to build trusted, long-term relationships and unlock sustainable, recurring revenue growth.

An expanding SMB and SME total addressable market (TAM)

Small and medium-sized businesses (SMBs) and small-to-medium enterprises (SMEs) represent a vast and rapidly growing segment for Microsoft partners. The TAM in this space continues to expand, driven by increased digital transformation, heightened cybersecurity concerns, and widespread adoption of cloud and AI technologies.

Microsoft’s strategic shift toward AI business solutions, cloud and AI platforms, and security directly addresses the specific needs of these customers. SMBs and SMEs are increasingly turning to technology to increase agility, improve customer engagement, and strengthen security posture. This focus means partners who specialize in these areas can capture more business with tailored solutions.

Key opportunities within the TAM include:

• AI-powered productivity tools—SMBs seek AI automation to reduce repetitive tasks, enhance collaboration, and generate data-driven insights.

• Cloud migration and modernization—Many SMBs are moving workloads to Azure to increase flexibility and lower IT costs.

• Cybersecurity services—Rising cyber threats and regulatory mandates drive demand for robust, managed security solutions.

For partners, this expanding TAM means an opportunity to deepen customer relationships and grow revenue by offering comprehensive Microsoft solutions that meet these evolving needs.

Upcoming Microsoft Partner Program changes—and what they mean for you

In addition to the shift in priority solutions, Microsoft’s partner program is undergoing significant changes coming into effect in October 2025. These changes are designed to simplify participation, increase incentives, and align partner efforts with Microsoft’s strategic priorities. Staying informed and adapting quickly is essential for partners to remain competitive and fully leverage available benefits.

The stakes are high: maintaining your CSP partner status means adapting swiftly to Microsoft’s evolving criteria, preserving control over pricing and customer relationships, and managing operational costs effectively. 

For a comprehensive look at these changes, read our recent blog. 

Next steps to maximize your Microsoft partnership

To succeed in FY26 and beyond, Microsoft partners should:

• Develop expertise around AI, cloud, and security—Use Microsoft Skilling Hub courses and certifications to deepen knowledge and build trust with customers.

• Engage proactively with Microsoft program changes—Take advantage of new incentives, subscription models, and migration tools.

• Utilize the AppDirect platform—Streamline Microsoft solution sales and subscription management and join the Microsoft Corner community for ongoing support.

• Tailor your offers to customer needs—Focus on business pain points around AI adoption, cloud modernization, and cybersecurity compliance.

• Attend AppDirect events for updates and insights—Gain firsthand insights from Microsoft and AppDirect leaders and network with partners to exchange best practices at events such as AppDirect webinars and State of Union updates, and the annual AppDirect Thrive conference.

Microsoft’s FY26 initiatives represent a transformational opportunity for partners ready to innovate and grow. By focusing on AI Business Solutions, Cloud & AI Platforms, and Security, partners position themselves at the forefront of technology adoption and customer value creation.

The Maximize Your Microsoft Partnership session at Thrive 2025 is a must-attend for partners seeking to unlock these opportunities. Coupled with AppDirect’s robust platform and resources, partners have everything they need to expand their Microsoft business and thrive in the evolving tech landscape. Register for Thrive and sign up for this and many other sessions.