The way organisations buy cloud software is shifting fast. Buyers want simple procurement, predictable billing, and quick access to tools that work. Microsoft’s recent overhaul of Marketplace reflects that reality. AppSource and Azure Marketplace now live under a single roof; AI apps and agents sit alongside traditional software; and partners have a clearer, faster route to market than ever before.
At the heart of this change is Resale Enabled Offers, or REO. It’s a move designed to help Software Development Companies (SDCs, formerly known as ISVs) extend their reach through channel partners and distributors, and help those partners sell more effectively through the Marketplace.
Here’s a full breakdown of what REO is, why it matters now, how it works, and where you need to watch out for some common pitfalls.
REO lets an SDC (the offer owner) authorise a channel partner to resell one of their publicly transactable Marketplace offers. Once authorised, that partner can create private or multiparty private offers for customers without needing the SDC to be involved in every deal.
Only certain offer types qualify:
Publicly transactable SaaS offers
Azure VM offers using reservation pricing
Marketplace handles billing and payouts. The resale partner gets paid directly by Microsoft, then commercial settlement between the SDC and the partner happens separately under their own agreement. It’s simple, scalable and focused on partnership.
Modern B2B buyers, especially millennial and Gen-Z professionals, expect a frictionless experience: clear pricing, self-service purchasing, predictable billing, digital workflows, procurement through cloud commitments, and a partner-led relationship they trust.
REO delivers on all those expectations. It lets SDCs give Marketplace-ready solutions to trusted channel partners. Those partners can then tailor pricing and services to customer needs, creating a buying experience that mirrors modern consumer-style convenience.
That shift aligns with recent Marketplace trends. In the most recent update from Microsoft, the Marketplace was described as the engine for “global channel-led opportunities”, enabling SDCs and partners to collaborate in a scalable way. partner.microsoft.com
Mason McCoy, Director of Marketplace Strategy at Microsoft, noted in that same post that REO “makes channel-led sales simple”, underlining how it reduces friction for vendors and accelerates go-to-market for partners.
You can enter new markets, verticals, or customer segments simply by authorising partners, rather than managing each deal yourself.
Partner Center Insights gives visibility into usage, orders and partner activity without exposing sensitive deal pricing. That balance of transparency + autonomy is powerful.
Marketplace handles billing and collections for you, reducing administrative load and smoothing revenue flow.
Empowering channel partners by giving them control builds stronger relationships. That loyalty drives long-term growth, not just one-off sales.
You can tailor private offers, adjust pricing, and build bundles around customer needs, giving much more flexibility than traditional licensing models. Note that REO supports single offers only, but you can bundle multiple ISV products into one customer proposal to meet end user needs.
Deals go through Marketplace, aligning with compliance, budget cycles, and cloud-commitment strategies many organisations already use.
You stay the trusted advisor. You lead the commercial conversation. The customer works with you, not with an anonymous vendor.
REO equips you to build a repeatable, modern channel motion without needing the SDC to author every offer.
The SDC publishes a publicly transactable offer (SaaS or eligible VM).
In Partner Center, the SDC authorises selected channel partners (by geography and offer).
Authorised partners gain access to create private or multiparty private offers in their own Partner Center.
Customers purchase via Marketplace. Microsoft handles billing and payout flows.
Both SDC and partner get reporting: usage and volume data for SDCs; deal flow and revenue data for channel partners.
Unified Marketplace: AppSource and Azure Marketplace are now one store, improving discoverability and reducing friction. partner.microsoft.com+1
AI first: Marketplace now features thousands of AI apps and agents, a category growing fast as enterprises adopt cloud-native and AI-powered tools. partner.microsoft.com+1
Growing volume: New in-Marketplace posting data shows rapid expansion; for example, in November 2025 alone, dozens of new offers went live weekly. TECHCOMMUNITY.MICROSOFT.COM+2TECHCOMMUNITY.MICROSOFT.COM+2
Built for channel-led motion: Microsoft now positions Marketplace as a core channel for channel-led growth and not as an afterthought. partner.microsoft.com+1
These changes make REO the ultimate strategic lever for delivering customer solutions both for commercial benefit and at scale.
“With REO now enabling global channel through the Microsoft Marketplace, with this powerful automation tool that we've got in the platform, we've got a real opportunity to bring this together for our customers.” Darren Sharpe, Microsoft Marketplace Channel Lead, UK.
Put simply, REO isn’t just a technical change; it’s strategic. Marketplace automation meets global channel reach, giving SDCs and partners a chance to redefine how solutions get out to market.
You can watch this explainer session from Microsoft Ignite, where Jason Rook, Jay McBain and Darren Sharpe come together to land this huge opportunity live from San Francisco.
| Model | What It Means | Best For |
|---|---|---|
| REO (Resale Enabled Offers) | SDC authorises partner → partner resells SDC’s Marketplace offer | Scalable, repeatable channel-led resale |
| CSP (Cloud Solution Provider) | Partner resells Microsoft’s cloud services, handles billing & support | Full Microsoft cloud reselling motion |
| MPO (Multiparty Private Offer) | SDC, partner and customer collaborate on a bespoke deal | Complex or high-value deals needing custom bundling |
In simple terms:
CSP = reselling Microsoft.
MPO = co-building a bespoke deal.
REO = reselling an SDC’s Marketplace offer at scale.
REO sits at a sweet spot: scalable, efficient, partner-friendly.
| Pitfall | What to Do |
|---|---|
| Enabling resale on non-transactable offers | Double-check offer type before authorising partner |
| Resale partners missing seller/tax/payout setup | Ensure Partner Center seller profile is complete before onboarding |
| Misunderstanding pricing control | Clarify in partner agreement that partner owns pricing under REO |
| Expecting detailed price data in SDC reporting | Agree in advance what reporting you expect; Marketplace hides partner pricing |
| Confusion over support roles | Clearly document who supports product , SDC still owns support/ technical overhead |
| Customer confusion about “seller of record” | Provide a short explainer when issuing offers |
Catch these early and you avoid friction down the line.
If you’re exploring REO, start by watching expert-led sessions that break the Microsoft Marketplace down in practical detail. Our Cloud Champion webinars with Darren Sharpe are a great place to begin:
Unlocking the New Microsoft Marketplace – Value for Channel Partners
https://www.cloudchampion.co.uk/c/unlocking-the-new-microsoft-marketplace-value-for-channel-partners/
Building a Channel Marketplace Practice – Co-sell, Scale and Win
https://www.cloudchampion.co.uk/c/building-a-channel-marketplace-practice-co-sell-scale-and-win
From there:
Assess which of your solutions qualify.
Set up Partner Center and ensure your partners have valid seller profiles.
Authorise partners.
Build your go-to-market offer and pricing strategy.
Monitor performance via Partner Center Insights.
REO isn’t just a new checkbox in Marketplace. It’s a strategic shift in how software gets sold, one that mirrors how customers now buy (fast, digital, flexible).
For SDCs, it’s a chance to scale without scaling friction. For partners, a way to offer more value, stay closer to the customer, and grow resale revenue. For customers, the benefits of flexible procurement with trusted advisors.
If you want to explore REO as part of your strategy whether launching offers, building channel-led resale practices or transforming your go-to-market, now is the moment.
We'll be highlighting more REO-specific content as Microsoft launch it!