If you’re responsible for marketing at a Microsoft Partner business, you’ve probably encountered Co-op funding in one of three ways.
Either someone told you the money exists and to go find it. Or a deadline appeared, a balance was mentioned, and you were handed a problem to solve with about six weeks to run. Or, you’ve never even heard of it.
This piece covers the earning side of Co-op: what qualifies your MSP, what drives the size of your balance, and why that understanding matters specifically if you’re the person responsible for marketing.
First: does your MSP qualify for Microsoft Co-op funding?
The short answer, for most MSPs, is yes.
Co-op is earned through Microsoft’s incentive programmes, and the primary route in for managed service providers is through the Cloud Solution Provider (CSP) programme. If your MSP is selling Microsoft 365 licences, Azure subscriptions, or other Microsoft cloud services to customers — which the vast majority of MSPs are — you are almost certainly transacting via CSP and accruing Co-op as a result.
Rob Smith, founder of Pargentic, who works with Microsoft Partners daily on their incentives and funding, is clear on this point:
“For MSP partners, they will almost certainly be a CSP licensing partner and selling CSP either as a direct reseller or as an indirect reseller. Virtually guaranteed.”
CSP isn’t the only route though. Hosting partners, Surface device resellers, and Azure Marketplace transacting partners all earn Co-op through their respective programmes. But for a typical MSP built around Microsoft cloud services, CSP is the engine — and the question isn’t usually whether you qualify. It’s whether anyone is paying attention to what’s accruing.
Read our blog: Microsoft Co-op funding: why so much of it gets left on the table.
What actually determines how much Co-op you can earn?
This is where it gets more nuanced. Co-op isn’t a flat amount. It’s calculated as a percentage of the revenue Microsoft generates through your sales activity. Which means the size of your pot is directly tied to the volume and value of what you’re selling through the Microsoft programmes you’re enrolled in.
The practical implication is significant: a 20-customer MSP and a 500-customer MSP are in completely different positions, not just in absolute terms but in what Co-op can realistically do for them.
Rob explains it plainly:
“There are probably 20 different levers that can earn you money in Co-op. But by far and away, the most is that CSP transacting partner piece. That’s where you’re going to get the biggest bang for your buck — that’s like 90% of the Co-op revenue.”
So, if your MSP is actively selling CSP licences, transacting via Azure Marketplace, or driving adoption of Microsoft workloads, you are building a Co-op balance. The more your MSP sells, and the more customers you bring onto Microsoft platforms, the more you accrue.
The range is wider than most people expect
One of the things that genuinely surprises people when they first look properly at their Co-op balance is the range of what’s possible in both directions.
On one end: a smaller MSP with a modest customer base might accrue a few thousand pounds per half. Enough to cover designation fees and perhaps a focused piece of content. Useful, but not transformative.
On the other end, some mid-sized MSPs are sitting on significantly more than they realise. Rob has seen partners with hundreds of thousands in their Co-op wallet — not because they were unusually large, but because they had a high volume of transacting customers and had never looked properly at what was accumulating.
“I worked with a partner recently — they’ve got 35,000 Microsoft licensing customers, and they didn’t know they were earning Co-op. They just didn’t know it was accruing in the background.”
That’s an extreme example. But the principle holds at every scale. Because Co-op accrues based on transaction activity rather than as a fixed allocation, partners who aren’t monitoring it regularly can find themselves with more — or less — than they assumed.
Read our blog: Who’s actually in charge of your Co-op funds?
The Co-op sweet spot and why it matters for how you plan
Not every Co-op pot is equal in terms of what it can actually do for your marketing.
Smaller balances — say, under £5,000 per half — tend to get absorbed by programme fees, designation costs, and training spend. There’s legitimate value in all of that, but there isn’t much room left for demand generation. For partners at this end of the scale, Co-op is more about cost recovery than growth investment.
At the other extreme, very large partners often have sophisticated marketing functions with dedicated resource and clear processes. Their Co-op is already planned against a calendar before the spend window opens.
The most interesting group sits in the middle. These are the MSPs with somewhere between £15,000 and £40,000 in their Co-op pot per half — too much to absorb into operational costs, not enough to move the EBIT needle on its own. This is where deliberate planning makes the biggest difference.
If that sounds like your MSP, the question isn’t whether to use the money. It’s whether you’re using it to build something, or simply spending it before the window closes.
Read our blog: What Microsoft Co-op funds can actually be spent on: a guide for MSP marketers
The earn/spend rhythm — and why, as marketers, you need to own it
Co-op works in six-monthly cycles. You earn during one half and spend during the next. There’s no rollover. Anything unclaimed at the end of the spend window is forfeited.
That rhythm has a specific implication for marketers that tends to get overlooked.
Because earning and spending happen in separate periods, the balance that’s available to you in any given spend window was determined by sales activity in the previous half. You’re always working with money that’s already been earned — not money you’re generating now.
Which means the time to plan your Co-op spend isn’t when the window opens. It’s before it does.
The partners who use Co-op most effectively treat it as a rolling planning discipline. They know what they earned in the last half, they have a rough sense of what they’re likely to earn in the current one, and they have a marketing plan ready to activate when the spend window opens — rather than scrambling to find something claimable with four weeks to go.
For an MSP marketer, owning that discipline is one of the most valuable things you can do with your time. Not because the mechanics are complicated, but because nobody else in your business is thinking about it from a marketing perspective. Finance sees it as a rebate. Operations see it as a programme cost. As the marketer, you’re the only person asking: what should we actually build with this?
Read our blog: Using FY26 Co-op funds for content marketing
The first step
If you’re not certain what your MSP is currently accruing, the right place to start is Partner Center. Your Co-op balance is visible there, along with the earning and spend periods it applies to.
If you’re not sure you have access, or if Co-op has historically sat with someone in finance or operations rather than the marketing team, that’s worth addressing directly. The conversation about who owns the Co-op budget is one of the most important ones a marketer in a Microsoft Partner business can have.
Read our blog: Who’s actually in charge of your Co-op funds?
Once you know what you have and when you can spend it, the planning conversation becomes much more straightforward. What to spend it on, how to structure it so it’s cleanly claimable, and how to make it build something that keeps working after the claim window closes — that’s where the real work starts.
Ready to plan your Co-op investment?
We work exclusively with Microsoft Partners to build Co-op claimable demand generation campaigns — scoped around a specific Microsoft workload, a defined audience, and a commercial outcome that matters to your business.
If you’d like to talk through what a focused campaign could look like for your budget and your half, take a look at how we work with Microsoft Partners — or get in touch directly. No retainer required.
