This is what Microsoft is saying:

“Marketplace becomes the primary path for co-sell at scale,
creating a more consistent, predictable, and auditable experience for both partners and sellers
while better aligning incentives with Microsoft’s long-term strategy.”

Consistent. Predictable. Auditable. Scalable.

This is how companies need to show up in Marketplace.

Here is the before and after.

BEFORE

• Partner Reported Azure Consumed Revenue (PRACR) operated as a broad co-sell mechanism.

• Partners reported the Azure consumption associated with their solutions.

FY27

• PRACR no longer operates as a broad co-sell mechanism.

• “Marketplace becomes the primary path for co-sell at scale.”

• Co-sell credit for Marketplace transactions continues through Marketplace Billed Sales (MBS).

In practical terms:

1. Marketplace readiness is now co-sell readiness. Microsoft tells ISVs with gaps that prevent Marketplace transactions to work with their Partner Development Manager.

2. Alliance teams need to manage more than referrals and relationships. Transactable pipeline, Marketplace Billed Sales, and the gaps preventing deals from flowing through Marketplace become core operating metrics.

3. My read: the hyperscalers are converging around Marketplace-led commercial partnerships. Microsoft has now made its direction explicit in its co-sell model.

​One alliance leader in our community described the broader direction well:
“The hyperscalers are moving Marketplace to the centre of how sales teams get incentivised.”

Another put it simply: “PRACR and MBS were both big metrics, and now one of them is the whole focus.”

As AI becomes more deeply integrated, Marketplace is becoming more than the transaction layer

In June, Microsoft previewed intelligent discovery that lets customers describe a use case in natural language, compare solutions, and move toward purchase.

Now Marketplace is also becoming the primary path for co-sell at scale.

Discovery → evaluation → transaction → attribution.

For ISVs already transacting at scale, FY27 reinforces the model they built. For everyone else, Marketplace gaps are becoming sales gaps.