Microsoft Partner Incentives Azure Incentive Guide October 1, 2016 – September 30, 2017

Contents Overview ..............................................................................................................................................3 Purpose............................................................................................................................................3 Incentive summary ......................................................................................................................3 Partner eligibility...............................................................................................................................4 MPN requirements ......................................................................................................................4 Microsoft agreement ..................................................................................................................4 Eligibility monitoring and management ..............................................................................4 Loss of eligibility...........................................................................................................................5 Enrollment ...........................................................................................................................................5 Azure Account Portal..................................................................................................................5 Onboarding process ...................................................................................................................5 Program structure & rates ............................................................................................................6 Business rules ................................................................................................................................6 Global incentives ..........................................................................................................................7 Earnings & calculation ....................................................................................................................7 Eligible revenue rules .................................................................................................................7 Public Sector ..................................................................................................................................7 Proof of Execution (POE) ...........................................................................................................8 Calculation ......................................................................................................................................8 Payment ............................................................................................................................................ 11 Payment cadence ...................................................................................................................... 11 Payment reporting ................................................................................................................... 12 Overpayment .............................................................................................................................. 13 Support & resources .................................................................................................................... 13 Support channels ...................................................................................................................... 13 Useful links .................................................................................................................................. 14 Appendix A ...................................................................................................................................... 15 How customer assigns Partner of Record in the Azure Account Portal ............... 15 Appendix B ...................................................................................................................................... 17 Proof of Execution – Process ................................................................................................ 17 Appendix C ...................................................................................................................................... 20 Microsoft Partner Network ID .............................................................................................. 20

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Overview Purpose This guide summarizes the requirements to participate in the Microsoft Azure Incentive. It replaces and supersedes all prior Microsoft Azure Incentive guides and any related communications. Prior to taking advantage of the Microsoft Azure Incentive outlined in this guide, partners will need to: 1. Meet the Eligibility Requirements 2. Be assigned as Partner of Record for Microsoft customer subscription(s) in the Microsoft Azure account portal. See Appendix A. 3. Be on-boarded to Microsoft’s Channel Incentives Platform (CHIP) tool, which enables partners to view earned incentives and track paid incentives. See the CHIP Guide.

Incentive summary The Microsoft Azure Incentive is a fee based Incentive that rewards partners for driving consumption of Microsoft Azure Services on Microsoft customer subscriptions purchased through the Microsoft Online Services Agreement (MOSA) and Enterprise Agreements (Enterprise (EA), Enterprise Subscription (EAS), Campus and School (CASA/EES), Microsoft Products and Service Agreement (MPSA), and MS Led (mainland China) only. Partners can earn incentives starting October 1, 2016 based on Microsoft Azure Incentive rates and terms for Microsoft Fiscal Year 2017. The terms of this guide apply to all active MOSA, EA, EAS, CASA/EES, MPSA, and MS Led Microsoft Azure subscriptions with Partner of Record assignment date through September 30, 2017. Microsoft Azure is a flexible Cloud platform that enables customers to develop, deploy, and manage applications across a global network of Microsoft-managed datacenters. Partners play a critical role in helping Microsoft Azure customers develop new applications and migrate existing applications to Microsoft Azure. All links referenced throughout the guide will be available in the Support and resources section.

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Partner eligibility In an effort to ensure consistency across Partner Incentives and enhance clarity for partners participating in multiple programs, Microsoft has created a standard format for Eligibility Criteria. To be eligible to participate in the Azure Incentive, a partner must meet the following criteria:

Microsoft Partner Network (MPN) Enrollment

Eligibility Type

Eligibility Requirement

Program Specific Criteria

Enrollment Status

Active MPN Membership

Competency

Cloud Platform

Membership Level

Silver, Gold

Competency Status

Active Earned, Active Pre-Approved, Active Non-Compliant, Active Inherited

MPN requirements Eligible partner organizations must hold an active MPN membership. Eligible partner organizations must also achieve and maintain MPN Gold or Silver level in the following competency: 

Cloud Platform

Competency status must be Active-Earned, Active Pre-Approved, Active-Non Compliant, Active Inherited. Review the specific requirements to attain Silver or Gold level MPN Competency on MPN here: https://mspartner.microsoft.com/en/us/Pages/Membership/competencies.aspx.

Microsoft agreement Partners must hold an active MPN Agreement. As of July 1, 2016, the Master Channel Incentive Agreement (MCIA) is now presented as part of the FY17 MPN Agreement as Exhibit B.

Eligibility monitoring and management Partner eligibility for Microsoft Azure Incentive is assessed monthly at the last day of each month. Partners must meet specific criteria before Microsoft can approve

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and release incentive payments. The Payment section of this guide includes a comprehensive set of conditions required for payment approval and release.

Loss of eligibility If Incentive eligibility is lost, then Microsoft will complete payments through the last month the partner had eligibility. For example, if the partner was earning Azure Incentive but lost the incentive eligibility in mid-March, the partner will earn until February based on the eligibility assessment that happens at the last day of each month.

Enrollment Azure Account Portal Customers can go into the Azure Account Portal to identify the partner that is driving consumption for a given Azure subscription i.e. the Partner of Record. Please see Azure Account Portal – Appendix A for step-by-step instructions. More resources can be found at http://aka.ms/por.

Onboarding process CHIP is the tool that partners use to track earning details on Azure Incentive subscriptions that they have been assigned by the customer as Partner of Record in the Azure Account Portal. Partners that meet the eligibility criteria and have been assigned as Partner of Record on an EA, EAS, CASA/EES, MPSA, MS Led, or MOSA Azure subscription will be invited to enroll in the tool. Partners must complete a payment profile (bank and tax details) via CHIP to enable electronic payment of incentives. If the Payment Profile is not completed, the partner will not be paid. Please see the CHIP guide for step-by-step instructions.

Invoice submission (in countries where applicable) To comply with local country requirements, Microsoft will hold incentive payments until a partner submits a partner invoice to Microsoft which acts as an incentive claim. Timely submission of such invoice (if required by the partner’s local government) will ensure prompt Incentive Payment disbursement by Microsoft. For guidance, some rules for specific countries are listed below. For questions, the partner can contact the support team as described in the Support and resource section of this guide. 5

China VAT special invoice The special invoice applies for incentives received through Microsoft China Co, Ltd transactions wherein the customer subscribes to services from an entity that operates the services in the People’s Republic of China based on the technology licensed from Microsoft, and the partner company is located in the People’s Republic of China. Additional information required on the invoice and instructions will be communicated to you separately. For questions, the partner can contact the support team as described in the Support and resource section of this guide. India invoice documentation The partner must send a copy of the fee invoice. Incentive payment will not be released until the invoice is received. Additional information required on the invoice and instructions will be communicated to you separately. For questions, the partner can contact the support team as described in the Support and resource section of this guide.

Program structure & rates This incentive includes global and local components.

Business rules A partner may earn the Microsoft Azure Incentive where they are attached as the Partner of Record, as long as the subscription remains current for the duration of the incentive. The partner will only earn from the month they are assigned as Partner of Record, or the month of competency attainment, whichever is later.

Partner must influence the consumption of Azure Influencing consumption includes building/migrating a line of business application or enabling Infrastructure as a Service. The partner’s service must include deploying a line of business workload on Azure or moving storage data to Azure in order to earn this incentive. Proof of concept, customer training, account/subscription setup, or upfront planning without a workload deployment or data storage would not be sufficient to earn this incentive. A list of examples of these services follows:

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Build/Migrate a line of business application

Enable Infrastructure as a service

 Build a custom application (for example website or backend for a mobile service) for the customer on Azure  Migrate/deploy a line of business application on Azure

 Deploy SharePoint on Azure  Implement multifactor authentication solution for a customer  Migrate data/files to StorSimple/Azure Storage/Azure Files/Azure Backup  Configure SQL Server disaster recovery or backup  Deploy Azure Site Recovery  Deploy Azure ExpressRoute  Test compatibility for Windows Server upgrade

Global incentives Duration

Rate

Incentive period*

15% of eligible revenue

*October 1, 2016 to September 30, 2017

Rates are not guaranteed for the full program year and may change with 3 months’ notice.

Earnings & calculation Eligible revenue rules Eligible Microsoft Azure Services are metered services that result in Microsoft revenue. Microsoft Azure Services that are trial offers or free services are not eligible for Microsoft Azure Incentive. Microsoft Azure Services that are per user based and not metered and do not consume monetary commitment, such as the Enterprise Mobility Suite (EMS), Rights Management Services, Azure Active Directory Premium, Power BI, Azure Support, and Azure Marketplace (itself, not things provisioned from it) are not eligible. Azure Consumption is the monetary value of the billable Microsoft Azure Services consumed by a Microsoft customer in a given time period.

Public Sector Partners may not earn Microsoft Azure Incentives for subscriptions involving Public Sector customers if the customer resides in one of the restricted countries listed in the Public Sector Country Ineligibility List, located on MPN at http://aka.ms/partnerincentives. Other restrictions: 7

 



Not all Microsoft Azure Services are available in all markets. New services and offers may be rolled out in new markets and current services and offers may be discontinued. As these service changes occur, customer consumption of Microsoft Azure Services will also change, resulting in different Incentive earnings for partners. Azure subscriptions purchased by the partner and partner’s affiliate, or subscriptions belonging to Microsoft or Microsoft’s affiliates, are not eligible for the Microsoft Azure Incentive.

Proof of Execution (POE) Microsoft may request the partner to provide proof of having performed the services with the customer in connection with the Incentive at any time. Proof of Execution (POE) will be requested at randomly scheduled validation reviews and once a POE has been requested for a given Azure subscription, incentive will not be paid until POE has been approved. Partners that fail to submit a valid POE will not earn the Azure Incentive for the related subscription(s). Once POE is approved, the incentive will be paid from the month the customer added the partner as Partner of Record in the Azure Account Portal. However, if the partner failed to submit a valid POE document within five business days following Microsoft’s request, and then later submitted a valid POE document, the partner will earn the Azure incentive from the month the valid POE document was approved. Please see Appendix B for additional information on Proof of Execution. This control remains a critical measure for ensuring that the right Partners are rewarded for their efforts on behalf of Microsoft.

Calculation  



Incentives will be calculated based on the customer consumption of Microsoft Azure Services. Calculation will start from the month of Cloud Platform competency attainment or the month of Partner of Record assignment, whichever is later. Incentives will be calculated monthly based on the snapshot taken on the last day of each month.

As part of the calculation process, the following validations are completed every month. Only partner/subscription data that has passed these validations will be considered for final calculation and payment: 

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Eligibility Status (active MPN ID, active Gold or Silver Cloud Platform Competency)

 

 

Partner assigned as Partner of Record on a subscription is not the same company as the customer or an affiliate of the customer. Public Sector customers must not be from a country listed in the Public Sector Country Ineligibility List located on MPN at http://aka.ms/partnerincentives If partner was asked for POE, the POE must have been approved by Microsoft on a given subscription Partner Enrollment in CHIP

Once the above requirements have been met, Microsoft will reconcile the Partner of Record with the customer consumption net billed revenue on that subscription. Microsoft Azure Customer consumption net billed revenue is the monetary value of billable Microsoft Azure Services consumption including any adjustments. Microsoft will initiate the payment process according to the following steps for partner/subscription data that has passed the above mentioned validations between October 1, 2016 and September 30, 2017: 1. Microsoft will calculate the consumption from the month the partner has been assigned as Partner of Record or the month the partner has attained a Gold or Silver Cloud Platform competency, whichever is later. 2. The snapshot is taken on the last day of each month. The partner must be the Partner of Record and have an active Gold or Silver Cloud Platform competency on the last day of each month to earn the incentive for that month. 3. The Microsoft Azure Incentive will be calculated against the current Azure Incentive rate of the monthly consumption per subscription for Azure services. 4. Microsoft will process the Incentive Payments and will electronically deposit them to the partner’s bank account provided during the enrollment process. 5. Taxes: For China – Unless provided otherwise, the amounts Microsoft shall pay to People’s Republic of China Azure partners are inclusive of all taxes that the People’s Republic of China Azure partners are required to collect from Microsoft under this Incentive, including any value added tax (VAT). People’s Republic of China Azure partners shall provide Microsoft or Microsoft’s appointed disbursement vendor with the VAT Special invoice ( 增值税专用发票) as the supporting document for all payments by Microsoft or Microsoft’s appointed disbursement vendor. 9

For India – The Incentive/Rebates Company receives include any applicable goods and services tax, value added tax, sales tax, gross receipts tax, or any other tax that is owed by Microsoft related to Incentive/Rebates and which are required to be collected from Microsoft by Company under applicable law. Consequently, it is solely Company’s responsibility to report and pay all applicable taxes or duties that may be required under any appropriate laws related to the Rebates it receives. Company must consult its own tax advisor with any question or concern about the taxes that apply to it in relation to this Letter. If taxes are required to be withheld on any amounts otherwise to be paid by or on behalf of Microsoft to Company, Microsoft will deduct such taxes from the amount otherwise owed to the Company and pay them to the appropriate taxing authority. Microsoft shall secure and deliver to Company an official receipt for any taxes withheld. Microsoft shall use reasonable efforts to minimize such taxes to the extent permissible under applicable law. This tax section shall govern the treatment of all taxes arising as a result of or in connection with this document notwithstanding any other section of this document. 6. Microsoft contracting entity for the Microsoft Partner Network Agreement: For the Microsoft Azure Services offered within the People’s Republic of China, customers subscribe the Microsoft Azure Services from an entity (the “Operating Entity in China”) that operates the services in the People’s Republic of China based on the technology licensed from Microsoft. Notwithstanding any contrary provision in the Microsoft Partner Network Agreement, 



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If the customer subscribes the Microsoft Azure Services from the Operating Entity and Company is located in the People’s Republic of China, the Microsoft contracting entity for the Microsoft Partner Network Agreement is: Microsoft (China) Co., Ltd. No. 5 Danling Street, Haidian District, Beijing 100080, China If Company is located outside of the People’s Republic of China, the Microsoft contracting entity for the Microsoft Partner Network Agreement is determined by the country or region where Company is located in accordance with Section 14(m) of the Microsoft Partner Network Agreement.

Payment Payment cadence Partners may receive payments through wire transfer. All incentives are paid in partner country billing currency (even if different than the customer currency) and disbursed quarterly, 45 days after Microsoft quarter end. Eligible Consumption Incentive Period

Disbursement By Date

October 1, 2016 – December 31, 2016

February 15, 2017

January 1, 2017 – March 31, 2017

May 15, 2017

April 1, 2017 – June 30, 2017

August 15, 2017

July 1, 2017 – September 30, 2017

November 15, 2017

Maximum threshold Eligible partners can earn a maximum amount of $100,000 USD (or equivalent in local currency) per subscription for all entities under an Organizational ID, during the incentive period from October 1, 2016 to September 30, 2017.

Minimum threshold If calculated incentives for a Partner are below the minimum threshold of $200 USD, a monthly partner statement will not be generated. Partner is defined as a unique MPN ID. Once a partner’s cumulative Azure Incentives reach $200 USD (or partner country billing currency equivalent), Microsoft will pay during the next regular payment cycle. At the end of the FY17 program year, calculated amounts below $200 are considered unearned and will be forfeited i.e., Microsoft will not pay amounts below the minimum threshold to partners and will not carry over any amounts to the next program year.

Unclaimed incentive payment As part of the regular quarterly payment cycle, Microsoft will inform all partners who are missing portions of the required payment information e.g., tax details, bank details and/or invoices, before the payment cycle is complete.

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If the required information is received by Microsoft in time for the quarterly disbursement, payment will be released. If the required information is received after the disbursement date, the payment will be included in the following payment cycle. For partners who fail to submit the required information, Microsoft will make incremental further follow ups for up to 3 times within 180 days post the initial notification. If the required documents are not received by Microsoft within the 180 day post the initial notification, the pending incentive payment will be deemed forfeited, subject to laws in the partner’s country, and no further notification will be sent to the partner.

Payment reporting The Channel Incentives Platform (https://channelincentives.microsoft.com) is where Partners can view summaries and details of forecasted and earned incentives and payment status. CHIP offers you the flexibility to log in at your convenience and view a summary of your performance and payment status on a dashboard screen. Partners have monthly visibility into their forecasted earnings as well as the capability to download their final quarterly earnings statements. The statements will also include information on subscriptions where the partner has been associated to the subscription.

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To see transaction level details, download the Calculation Details file by selecting “download” from the ‘Select’ dropdown under the Export to Excel section of the screen. You can also download your Payment History using the same dropdown. For more details, please see the CHIP guide.

Overpayment Overpayment may occur due to various reasons: calculation error, payment processing error, wrong MPN ID provided by partner, etc. In the event of an overpayment, Microsoft will proceed with the recovery of an overpayment in accordance with the Microsoft Channel Incentive Agreement. Microsoft will generally attempt to recover overpayment by offsetting against future incentive payments earned. If for any reason such approach cannot be executed (e.g. partner is no longer participating in an Incentive), Microsoft reserves the right to invoice partner for the overpaid amount directly. Alternative recovery options include but not limited to:  



The default recovery approach is an adjustment to future earnings. Partner may be offered an option to repay the overpaid amount directly to Microsoft. Such option can be offered by Operations Account Managers (OAM), Partner Account Managers (PAM) or Partner Sales Executives (PSE) if it is a partner preference to return the overpayment vs. seeing adjustment to future earnings. Following receipt of a request from the partner, Microsoft may agree to spread out recovery of the overpayment over a number of earning periods not to exceed 180 days in total.

Support & resources Useful resources for all incentives can be found on the Microsoft Partner Network at http://aka.ms/partnerincentives (partner authentication required).

Support channels Support including self-help, live support agents, community support, and support tickets can be accessed through the Microsoft Partner Network. Under the "Support" tab, select "Contact Support." When the portal opens, select "Partner Incentives" as the Category. The partner is then able to choose a Topic and Issue. Support can be accessed through the Microsoft Partner Network on https://mspartner.microsoft.com. 13

Under the ‘Support’ tab, select the ‘Contact Support’ option. When the portal opens, select ‘Partner Incentives’ as the Category, then select ‘Online Services.’ The partner is then able to choose a topic and issue.

This will present the partner with a recommended solution and also an opportunity to submit a specific issue or chat live with support.

Useful links    

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Microsoft Partner Network: https://mspartner.microsoft.com Partner Incentives MPN Portal: aka.ms/partnerincentives FY17 MPN Agreement: aka.ms/partnerincentives Partner of Record: http://aka.ms/por

Appendix A How customer assigns Partner of Record in the Azure Account Portal The Customer Account Admin logs into the Azure Account Center1, selects a subscription, and clicks the “Partner Information” button.

Mainland China: https://account.windowsazure.cn; US Government: http://account.windowsazure.us; German Sovereign Cloud: http://account.windowsazure.de 1

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Customer Account Admin enters the partner MPN ID and clicks the “Check ID” button. Customer Account Admin will be able to see the name of the partner associated to that MPN ID. Customer Account Admin can add or remove an MPN ID at any time. More details about the process can be found at http://aka.ms/por.

Primary MPN contact for the partner receives a confirmation email that they are added or removed. Partner is also able to see the list of subscriptions in which they have been assigned as Partner of Record in the MPN Online Services Dashboard. This dashboard includes subscriptions that may not be eligible for Azure Incentive payment, so please log into CHIP for an accurate view on your incentive earnings. In order to ensure the consumption on a given subscription is considered for incentive payment, please have the customer go through the above process ten days prior to the end of each quarter to leave time for POE requests and reviews as needed.

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Appendix B Proof of Execution – Process Microsoft may request the partner to provide proof of having performed the services with the customer in connection with the subscription that the partner has been assigned as Partner of Record. Proof of Execution (POE) will be requested at randomly scheduled validation reviews. In the event that POE is required, the request will be made via email by Microsoft asking the partner to provide an implementation plan signed and dated by the customer within five (5) business days. Microsoft will review the document(s) to see if the partner provided services that influence consumption of Azure as listed in the Incentive rates and structure section of the FY17 Azure Incentive Guide. Following documents will not be approved as a valid POE Pricing quotes or licensing comparisons Document shows that the partner provided services only on non-metered Azure services that are per user based and do not consume Azure  Documents lacking customer acknowledgment  Documents lacking details of the actual workload or data that was migrated/deployed to Azure Once the POE documentation has been considered by the Partner Review Board, the partner will receive a decision via email from Microsoft.  

POE validation Proof of Execution validates the technical implementation services that partners complete as part of their motion to drive Azure Consumption. While the format of the POE is flexible – the POE content should include five basic elements: 1. 2. 3. 4. 5.

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Customer Need Solution Architecture Customer Benefit Implementation Plan Customer Acknowledgement

Evaluation Criteria: Customer Need  

What is the business gap or opportunity addressed by the proposed Azure technology solution? What users are affected in the business (where in the business is this system being used)?

Solution Architecture  

What does the customer’s current system look like (number of users, summary of the legacy systems)? How will the Azure solution expand or replace existing infrastructure? Note: this is not designed to be a complete schematic but a general description.

Customer Benefit 

What are the relevant benefits of the Azure solution to the customer? Note: ROI is a best practice but not always practical – what is required for “Benefit” is customer specific information about the Azure solution rather than a list of product features translated from a Microsoft website.

Implementation Plan 

Highlight next steps, roles, responsibilities, and timelines for implementing the Azure solution.

Customer Acknowledgement 

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Microsoft requires that partners obtain some form of acknowledgement from the customer that they have seen the Proof of Concept Completion Report or the Implementation Plan and that they are pursuing the described Azure solutions with the help of the partner.

Inspection Point

Acceptable Material

Insufficient Material

Customer Need

Documentation describes challenges with current process specific to the technology and the customer

Company overview or “About Us” material from customer website

Solution Architecture

Number of users, offices, data centers or other infrastructure affected by the Azure solution

Product information or specifications taken from technical guides and/or Microsoft marketing materials

Description of the proposed solution’s integration with or replacement of legacy customer systems

Current customer system information without the mention of the proposed Azure solution

Customer Benefit

Specific (in not necessarily quantified) improvements to customer’s products, processes, services or technology

General product benefits taken from technical or promotional materials

Implementation Plan

Description of next steps to implement the Azure solution within the customer’s current systems or processes

List of high level tasks (e.g., “testing, ongoing support,” etc.)

Customer Acknowledgement

Signed Statement of Work for Azure Services from customer

Customer note concerning license purchases

Signed Proof of Concept Completion Report from customer

Other email contact between the partner and customer such as general questions and answers

Signed letter or acknowledgement specific to the Implementation Plan for Partner Driven Azure Services Replies to partner emails with specific unambiguous references to the Azure Solution Proposal or the meeting in which the proposal was discussed in the body from the customer.

Signed documentation between the partner and customer that does not refer specifically to the Opportunity involved in the Azure Incentive request

In addition to the listed materials, you may provide a status update or other follow-up documentation that demonstrates maturation of the customer relationship in order to strengthen your submission.

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Appendix C Microsoft Partner Network ID 1. Within in MPN, there are identification numbers for each partner entity used by Microsoft to identify Microsoft Partner. This is also referred as the MPN ID. 2. For purposes of incentive payment, partners are strongly encouraged to utilize their Location MPN ID, as the Organization Partner ID is not a legal payable entity and may result in the delay of incentive payments. 3. The partner is responsible for communicating the correct MPN ID to the customer in order to earn the incentive. 4. The partner must use the same MPN Partner ID across all points of entry and/or documentation relevant to the Azure Incentive. Example: Partner of Record MPN ID should match the MPN ID submitted on the bank details form and/or tax form. 5. All of the corresponding communication and/or payment disbursement will be made to the MPN ID referenced as Partner of Record. All communication to the relevant Partner of Record MPN ID will be issued to the Primary Contact as recorded within Microsoft Partner Network (MPN) portal. 6. The MPN Company Address is used to validate and disburse payments to partners. When submitting bank details and/or tax forms, the Company address should be the same as listed under the relevant MPN ID in the Microsoft Partner Network (MPN) portal. Partners are responsible for ensuring that the correct address is entered in full and accurately in the portal in order to avoid payment delays. All materials and information presented should be treated as Microsoft Confidential Information and are subject to the terms of your NDA with Microsoft through your channel partner agreement or Microsoft Partner Network Agreement in its current form. This information is intended to be used for business planning purposes and may be subject to change.

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