Publishing readiness for AI apps and agents on Microsoft Marketplace
Publishing begins before Partner Center Your AI solution readiness for Microsoft Marketplace is based on how your system operates at runtime, how change is controlled over time, and how customers experience adoption, billing, and ongoing use. Microsoft evaluates how these elements align. It checks that identity boundaries are clear, support and privacy policies are accessible and well-structured, and subscription and billing events connect to system execution in predictable ways. This article focuses on technical Marketplace readiness before you begin to configure an offer in Partner Center to ensure publishing proceeds cleanly. It covers organizational readiness, identity and access boundaries, runtime safeguards, data handling posture, and subscription lifecycle preparation. Go‑to‑market planning and promotion also play a key role in driving adoption and success. This article focuses on technical readiness, and a future post will cover go‑to‑market considerations in more detail. You can always get curated step-by-step guidance through building, publishing, and selling apps for Marketplace through App Advisor. This post is part of a series on building and publishing well-architected AI apps and agents in Microsoft Marketplace. The series focuses on AI apps and agents that are architected, hosted, and operated on Azure, with guidance aligned to building and selling solutions through Microsoft Marketplace. Publishing readiness for Marketplace operations Publishing readiness reflects how your organization is structured to transact, support customers, and operate your AI app or agent in Marketplace. It depends on how identity, finance, and ownership are defined and aligned within your organization. Partner Center enrollment and account structure define your publisher identity. You enroll in the Microsoft AI Cloud Partner Program and the Marketplace program and operate under a publisher identity and Seller ID. This identity connects your organization to offers, transactions, and certification processes. Duplicate accounts or incomplete enrollment create conflicts when offers, payouts, or reviews do not align to one record and can create attribution issues towards benefit qualification milestones. Financial readiness connects your system to Marketplace transactions. Microsoft processes purchases, renewals, and payouts on your behalf, which requires validated tax and payout profiles tied to your legal entity. These profiles determine how revenue flows and how regulatory obligations are handled. If your organization operates across regions or uses different tax or currency structures, you may define multiple selling entities, each with its own Seller ID. This ensures Marketplace can associate transactions, payouts, and compliance requirements accurately with the correct entity. Role assignment defines how work is executed across teams. Publishing spans engineering, product, and finance, with roles such as Owner, Manager, Developer, and Finance Contributor enforced through Partner Center. This division of labor ensures that configuration progresses, publishing workflow moves predictably, and issues are resolved quickly. Identity and tenant requirements Marketplace publishing requires identity boundaries to be clearly defined and consistently enforced. These boundaries are expressed through configuration and declared behavior that is set up during publishing and certification. Marketplace evaluates how identity is defined, scoped, and enforced based on that input. The customer authentication model defines how access is granted. Your solution establishes whether access is managed at the tenant level, where administrators control entry for the organization, or at the user level, where individual users authenticate and operate independently. This model determines how access is provisioned, how permissions are applied, and how customers manage their environments. Tenant isolation ensures that each customer operates within a defined boundary. Isolation applies across data, execution context, and agent behavior. Data generated within a tenant remains scoped to that tenant. Execution paths, including model calls and tool usage, remain contained within the intended context. Agents operate within defined scopes, so their actions stay within tenant boundaries. Runtime behavior readiness Runtime behavior needs to be clear, bounded, and observable so that customers and Microsoft can understand how the solution performs as usage scales. This information directly informs Marketplace certification and customer evaluation. Certification reviews rely on clear behavior definitions, and customers use these signals to assess reliability, performance, and cost expectations during trials. For detailed coverage of best practices, refer to Design CI/CD for AI apps and agents selling through Microsoft Marketplace post. Data handling and compliance Data boundaries need to be clearly defined, consistently enforced, and easy to understand from both an operational and customer perspective. Data flow and storage boundaries describe how information moves through your solution. This includes where data originates, how it is processed, and where it is stored. These flows must be explicit so that customers and Microsoft can understand how data is handled in different scenarios, including normal execution and failure conditions. Separation of customer data and system data defines how information is scoped. Customer data remains isolated within its tenant and context, while system data—such as logs, telemetry, and model inputs—follows defined handling rules. Clear separation prevents unintended access and ensures that processing remains aligned with tenant boundaries. Access governance defines who can interact with data and under what conditions. Permissions are assigned based on roles and responsibilities, and access paths are controlled across services, agents, and supporting infrastructure. These controls determine how data can be read, modified, or acted upon during execution. Auditability ensures that data interactions are traceable over time. Access, modification, and usage patterns are recorded in a way that supports review, compliance, and incident response. Marketplace publishing reflects these controls as part of your offer. Customers rely on this information to understand how their data is handled in practice. Commerce and subscription lifecycle readiness Commerce is part of how your solution operates in production, shaping how customers activate, modify, and stop using your service. Transactable offers introduce a defined subscription lifecycle. Customers create subscriptions, select plans, change quantities or pricing tiers, and cancel or renew over time. Each of these events interacts directly with your solution and influences how access, usage, and billing are handled. Your solution must respond to these lifecycle events consistently. Subscription creation should trigger provisioning and access setup. Plan updates should adjust capacity, limits, or entitlements. Cancellations and suspensions must deactivate access and ensure that usage aligns with billing state. These transitions must be handled in a way that keeps solution behavior and customer expectations aligned. CI/CD pipelines should extend into subscription logic. This ensures that changes to plans, pricing models, or metering behavior move through the same controlled processes as code and configuration. Updates to commerce handling will then remain consistent with runtime behavior and not introduce gaps between billing and execution. Customer acquisition and engagement Marketplace publishing introduces a direct connection between customer interest and solution usage. Leads and trials reflect real evaluation activity and need to be captured and connected to your operational processes. Marketplace generates signals when customers discover, evaluate, and interact with your offer. Trial activations, preview usage, and direct inquiries indicate who engaged and when that engagement occurred. This information provides context for how your AI app or agent is being evaluated in real environments. Lead destination configuration connects these signals to your systems. Partner Center integrates with CRM platforms such as Dynamics 365, Salesforce, or other endpoints such as webhook and Azure tables, ensuring that lead data flows into your internal processes without delay. This configuration determines how quickly teams can respond to customer interest and how consistently engagement is tracked. CRM integration supports continuity between Marketplace and ongoing operations. Engagement data becomes part of how you understand adoption patterns, follow up on trials, and support customers as they transition to active use. When lead data flows are reliable, teams can connect Marketplace activity to product usage, support workflows, and sales processes. A foundational best practice is to offer free trials to encourage customers to test your product before they commit to purchase, which in the process unlocks an incredible opportunity to nurture a high intent opportunity into a paying customer. Certification readiness as system validation Marketplace certification validates how your system is defined and how consistently it operates. Review processes evaluate alignment between your offer configuration, declared behavior, and the expected customer experience. Certification focuses on consistency, declared behavior, and boundary clarity. Identity models, runtime behavior, subscription lifecycle handling, and data controls must align across your listing, technical configuration, and actual solution. Clear definitions allow reviewers to understand how the solution behaves without needing to inspect it directly. Certification friction often comes from gaps in these definitions. Inconsistent identity mapping creates uncertainty around access and enforcement. Unclear lifecycle handling introduces risk in how subscriptions are provisioned, updated, or terminated. These issues surface during review because the system behavior and the published configuration do not align. Certification also validates your offers against Marketplace policies such as inclusion of expected information in your listing like support links, privacy policy, adequate terms of use, and accurate use of Microsoft product names and icons. The Partner Center validation steps provide early Marketplace listing certification signals. These tools surface configuration issues, missing requirements, and inconsistencies before submission. Running them during preparation helps resolve problems ahead of certification and keeps the submission process predictable. Publishing readiness checkpoints Publishing readiness becomes clear when the system, organization, and operational model align. Partner Center setup proceeds without delays, system behavior is explainable under real conditions, ownership across teams is defined, and subscription flows are understood and validated conceptually. At this point, offer configuration begins to reflect how the system already behaves. Publishing becomes a step where defined behavior is expressed and submitted, not a process where gaps are discovered and resolved under time pressure. These details—identity models, plans, pricing, and lifecycle handling—once entered into Partner Center will flow directly into a transactable offer that is live on Marketplace. What’s next in the journey With readiness established, the next step is expressing it in Microsoft Marketplace. This shifts the focus from system design and operational alignment to how those decisions are represented through Partner Center configuration. Key resources See curated, step-by-step guidance to help you build, publish, or sell your app or agent (no matter where you start) in App Advisor. Quick-Start Development Toolkit Microsoft AI Envisioning Day Events How to build and publish AI apps and agents for Microsoft Marketplace Get over $126K USD in benefits and technical consultations to help you replicate and publish your app with ISV SuccessSecuring AI apps and agents on Microsoft Marketplace
Why security must be designed in—not validated later AI apps and agents expand the security surface beyond that of traditional applications. Prompt inputs, agent reasoning, tool execution, and downstream integrations introduce opportunities for misuse or unintended behavior when security assumptions are implicit. These risks surface quickly in production environments where AI systems interact with real users and data. Deferring security decisions until late in the lifecycle often exposes architectural limitations that restrict where controls can be enforced. Retrofitting security after deployment is costly and can force tradeoffs that affect reliability, performance, or customer trust. Designing security early establishes clear boundaries, enables consistent enforcement, and reduces friction during Marketplace review, onboarding, and long‑term operation. In the Marketplace context, security is a foundational requirement for trust and scale. You can always get a curated step-by-step guidance through building, publishing and selling apps for Marketplace through App Advisor. This post is part of a series on building and publishing well-architected AI apps and agents in Microsoft Marketplace. The series focuses on AI apps and agents that are architected, hosted, and operated on Azure, with guidance aligned to building and selling solutions through Microsoft Marketplace. How AI apps and agents expand the attack surface Without a clear view of where trust boundaries exist and how behavior propagates across systems, security controls risk being applied too narrowly or too late. AI apps and agents introduce security risks that extend beyond those of traditional applications. AI systems accept open‑ended prompts, reason dynamically, and often act autonomously across systems and data sources. These interaction patterns expand the attack surface in several important ways: New trust boundaries introduced by prompts and inputs, where unstructured user input can influence reasoning and downstream actions Autonomous behavior, which increases the blast radius when authentication or authorization gaps exist Tool and integration execution, where agents interact with external APIs, plugins, and services across security domains Dynamic model responses, which can unintentionally expose sensitive data or amplify errors if guardrails are incomplete Each API, plugin, or external dependency becomes a security choke point where identity validation, audit logging, and data handling must be enforced consistently as part of securing AI integrations—especially when AI systems span tenants, subscriptions, or ownership boundaries. Using OWASP GenAI Top 10 as a threat lens The OWASP GenAI Top 10 provides a practical, industry‑recognized lens for identifying and categorizing AI‑specific security threats that extend beyond traditional application risks. Rather than serving as a checklist, the OWASP GenAI Top 10 helps teams ask the right questions early in the design process. It highlights where assumptions about trust, input handling, autonomy, and data access can break down in AI‑driven systems—often in ways that are difficult to detect after deployment. Common risk categories highlighted by OWASP include: Prompt injection and manipulation, where malicious input influences agent behavior or downstream actions Sensitive data exposure, including leakage through prompts, responses, logs, or tool outputs Excessive agency, where agents are granted broader permissions or action scope than intended Insecure integrations, where tools, plugins, or external systems become unintended attack paths Highly regulated industries, sensitive data domains, or mission‑critical workloads may require additional risk assessment and security considerations that extend beyond the OWASP categories. The OWASP GenAI Top 10 allows teams to connect high‑level risks to architectural decisions by creating a shared vocabulary that sets the foundation for designing guardrails that are enforceable both at design time and at runtime. Designing security guardrails into the architecture Security guardrails must be designed into the architecture, shaping where and how policies are enforced, evaluated, and monitored throughout the solution lifecycle. Guardrails operate at two complementary layers: Design time, where architectural decisions determine what is possible, permitted, or blocked by default Runtime, where controls actively govern behavior as the AI app or agent interacts with users, data, and systems When architectural boundaries are not defined early, teams often discover that critical controls—such as input validation, authorization checks, or action constraints—cannot be applied consistently without redesign: Tenancy boundaries, defining how isolation is enforced between customers, environments, or subscriptions Identity boundaries, governing how users, agents, and services authenticate and what actions they can perform Environment separation, limiting the blast radius of experimentation, updates, or failures Control planes, where configuration, policy, and behavior can be adjusted without redeploying core logic Data planes, controlling how data is accessed, processed, and moved across trust boundaries Designing security guardrails into the architecture transforms security from reactive to preventative, while also reducing friction later in the Marketplace journey. Clear enforcement boundaries simplify review, clarify risk ownership, and enable AI apps and agents to evolve safely as capabilities and integrations expand. Identity as a security boundary for AI apps and agents Identity defines who can access the system, what actions can be taken, and which resources an AI app or agent is permitted to interact with across tenants, subscriptions, and environments. Agents often act on behalf of users, invoke tools, and access downstream systems autonomously. Without clear identity boundaries, these actions can unintentionally bypass least‑privilege controls or expand access beyond what users or customers expect. Strong identity design shapes security in several key ways: Authentication and authorization, determines how users, agents, and services establish trust and what operations they are allowed to perform Delegated access, constraints agents to act with permissions tied to user intent and context Service‑to‑service trust, ensures that all interactions between components are explicitly authenticated and authorized Auditability, traces actions taken by agents back to identities, roles, and decisions A zero‑trust AI agent architecture is essential in this context. is essential in this context. Every request—whether initiated by a user, an agent, or a backend service—should be treated as untrusted until proven otherwise. Identity becomes the primary control plane for enforcing least privilege, limiting blast radius, and reducing downstream integration risk. This foundation not only improves security posture, but also supports compliance, simplifies Marketplace review, and enables AI apps and agents to scale safely as integrations and capabilities evolve. Protecting data across boundaries Data may reside in customer‑owned tenants, subscriptions, or external systems, while the AI app or agent runs in a publisher‑managed environment or a separate customer environment. Protecting data across boundaries requires teams to reason about more than storage location. Several factors shape the security posture: Data ownership, including whether data is owned and controlled by the customer, the publisher, or a third party Boundary crossings, such as cross‑tenant, cross‑subscription, or cross‑environment access patterns Data sensitivity, particularly for regulated, proprietary, or personally identifiable information Access duration and scope, ensuring data access is limited to the minimum required context and time When these factors are implicit, AI systems can unintentionally broaden access through prompts, retrieval‑augmented generation, or agent‑initiated actions. This risk increases when agents autonomously select data sources or chain actions across multiple systems. To mitigate these risks, access patterns must be explicit, auditable, and revocable. Data access should be treated as a continuous security decision, evaluated on every interaction rather than trusted by default once a connection exists. This approach aligns with zero-trust principles, where no data access is implicitly trusted and every request is validated based on identity, context, and intent. Runtime protections and monitoring For AI apps and agents, security does not end at deployment. In customer environments, these systems interact continuously with users, data, and external services, making runtime visibility and control essential to a strong security posture. AI behavior is also dynamic: the same prompt, context, or integration can produce different outcomes over time as models, data sources, and agent logic evolve, so monitoring must extend beyond infrastructure health to include behavioral signals that indicate misuse, drift, or unintended actions. Effective runtime protections focus on five core capabilities: Vulnerability management, including regular scanning of the full solution to identify missing patches, insecure interfaces, and exposure points Observability, so agent decisions, actions, and outcomes can be traced and understood in production Behavioral monitoring, to detect abnormal patterns such as unexpected tool usage, unusual access paths, or excessive action frequency Containment and response, enabling rapid intervention when risky or unauthorized behavior is detected Forensics readiness, ensuring system-state replicability and chain-of-custody are retained to investigate what happened, why it happened, and what was impacted Monitoring that only tracks availability or performance is insufficient. Runtime signals must provide enough context to explain not just what happened, but why an AI app or agent behaved the way it did, and which identities, data sources, or integrations were involved. Equally important is integration with broader security event and incident management workflows. Runtime insights should flow into existing security operations so AI-related incidents can be triaged, investigated, and resolved alongside other enterprise security events—otherwise AI solutions risk becoming blind spots in a customer’s operating environment. Preparing for incidents and abuse scenarios No AI app or agent operates in a perfectly controlled environment. Once deployed, these systems are exposed to real users, unpredictable inputs, evolving data, and changing integrations. Preparing for incidents and abuse scenarios—including AI agent incident response—is therefore a core security requirement, not a contingency plan. AI apps and agents introduce unique incident patterns compared to traditional software. In addition to infrastructure failures, teams must be prepared for prompt abuse, unintended agent actions, data exposure, and misuse of delegated access. Because agents may act autonomously or continuously, incidents can propagate quickly if safeguards and response paths are unclear. Effective incident readiness starts with acknowledging that: Abuse is not always malicious, misuse can stem from ambiguous prompts, unexpected context, or misunderstood capabilities Agent autonomy may increase impact, especially when actions span multiple systems or data sources Security incidents may be behavioral, not just technical, requiring interpretation of intent and outcomes Preparing for these scenarios requires clearly defined response strategies that account for how AI systems behave in production. AI solutions should be designed to support pause, constrain, or revoke agent capabilities when risk is detected, and to do so without destabilizing the broader system or customer environment. Incident response must also align with customer expectations and regulatory obligations. Customers need confidence that AI‑related issues will be handled transparently, proportionately, and in accordance with applicable security and privacy standards. Clear boundaries around responsibility, communication, and remediation help preserve trust when issues arise. How security decisions shape Marketplace readiness From initial review to customer adoption and long‑term operation, security posture is a visible and consequential signal of readiness. AI apps and agents with clear boundaries—around identity, data access, autonomy, and runtime behavior—are easier to evaluate, onboard, and trust. When security assumptions are explicit, Marketplace review becomes more predictable, customer expectations are clearer, and operational risk is reduced. Ambiguous trust boundaries, implicit data access, or uncontrolled agent actions can introduce friction during review, delay onboarding, or undermine customer confidence after deployment. Marketplace‑ready security is therefore not about meeting a minimum bar. It is about enabling scale. Well-designed security allows AI apps and agents to integrate into enterprise environments, align with customer governance models, and evolve safely as capabilities expand. When security is treated as a first‑class architectural concern, it becomes an enabler rather than a blocker—supporting faster time to market, stronger customer trust, and sustainable growth through Microsoft Marketplace. What’s next in the journey Security for AI apps and agents is not a one‑time decision, but an ongoing design discipline that evolves as systems, data, and customer expectations change. By establishing clear boundaries, embedding guardrails into the architecture, and preparing for real‑world operation, publishers create a foundation that supports safe iteration, predictable behavior, and long‑term trust. This mindset enables AI apps and agents to scale confidently within enterprise environments while meeting the expectations of customers adopting solutions through Microsoft Marketplace. See the next post in the series: Designing AI guardrails for apps and agents in Marketplace | Microsoft Community Hub. Key resources See curated, step-by-step guidance to help you build, publish, or sell your app or agent (no matter where you start) in App Advisor, Quick-Start Development Toolkit Microsoft AI Envisioning Day Events How to build and publish AI apps and agents for Microsoft Marketplace Get over $126K USD in benefits and technical consultations to help you replicate and publish your app with ISV SuccessProduction ready architectures for AI apps and agents on Marketplace
Why “production‑ready” architecture matters for Marketplace AI apps and agents A working AI prototype is not the same as a production‑ready AI app in Microsoft Marketplace. Marketplace solutions are expected to operate reliably in real customer environments, alongside mission‑critical workloads and under enterprise constraints. As a result, AI apps published through Marketplace must meet a higher bar than “it works in a demo.” You can always get a curated step-by-step guidance through building, publishing and selling apps for Marketplace through App Advisor. Production‑ready Marketplace AI apps must assume: Alignment with enterprise expectations and Azure well‑architected AI principles, including cost optimization, security, reliability, operational excellence, and performance efficiency Architectural decisions made early are difficult to reverse, especially once customers, tenants, and billing relationships are in place A higher trust bar from customers, who expect Marketplace solutions to be Microsoft‑vetted, certified, and safe to run in production Customers come to Marketplace expecting solutions that are ready to run, ready to scale, and ready to be supported—not experiments. This post focuses on the architectural principles and patterns required to meet those expectations. Specific services and implementation details are covered later in the series. This post is part of a series on building and publishing well-architected AI apps and agents in Microsoft Marketplace. The series focuses on AI apps and agents that are architected, hosted, and operated on Azure, with guidance aligned to building and selling solutions through Microsoft Marketplace. Aligning offer type and architecture early sets you up for success A strong indicator of a smooth Marketplace journey is early alignment between offer type and solution architecture. Offer type defines more than how an AI app is listed—it establishes clear roles and responsibilities between publishers and customers, which in turn shape architectural boundaries. Across all other offer types, architecture must clearly answer three questions: Who owns the runtime? Where does the AI execute? Who controls updates and ongoing operations? These decisions will vary depending on whether the solution resides in the customer’s or publisher’s tenant based on the attributes associated with the following transactable marketplace offer types: SaaS offers, where the AI runtime lives in the publisher’s environment and architecture must support multitenant AI app design, strong isolation, and centralized operations Container offers, where workloads run in the customer’s Kubernetes environment and architecture emphasizes portability and clear operational assumptions Virtual Machine offers, where preconfigured environments run in the customer’s subscription and architecture is more tightly coupled to the OS and infrastructure footprint Azure Managed Applications, where the solution is deployed into the customer's subscription and architecture must balance customer control with defined lifecycle boundaries. What makes this model distinctive is its flexibility: an Azure Managed Application can package containers, virtual machines, or a combination of both — making it a natural fit for solutions that require customer-controlled infrastructure without sacrificing publisher-managed operations. The packaging choice shapes the underlying architecture, but the managed application wrapper is what defines how the solution is deployed, updated, and governed within the customer's environment. Architecture decisions naturally reinforce Marketplace requirements and reduce certification and operational friction later. Key factors that benefit from early alignment include: Roles and responsibilities, such as who operates the AI runtime and who is responsible for uptime, patching, scaling, and ongoing operations Proximity to data, particularly for AI solutions that rely on customer‑specific or proprietary data, where placement affects performance, data movement, and compliance Core architectural building blocks of AI apps Designing a production‑ready AI app starts with treating the solution as a system, not a single service. AI apps—especially agent‑based solutions—are composed of multiple cooperating layers that together enable reasoning, action, and safe operation at scale. At a high level, most production‑ready AI apps include the following building blocks: Interaction layer, which serves as the entry point for users or systems and is responsible for authentication, request shaping, and consistent responses Orchestration layer, which coordinates reasoning, tool selection, workflow execution, and retrieval‑augmented generation (RAG) flows across multi‑step interactions Model endpoints, which provide inference and generation capabilities and introduce distinct latency, cost, and dependency characteristics Data sources, including vector stores, operational data, documents, and logs that the AI system reasons over Control planes, such as identity, configuration, policy enforcement, feature flags, and secrets management, which govern behavior without redeploying core logic Observability, which enables tracing, monitoring, and diagnosis of agent decisions, actions, and outcomes Networking, which connects components using a zero‑trust posture where every call is authenticated and outbound access is explicitly controlled Together, these components form the foundation of most Marketplace‑ready AI architectures. How they are composed—and where boundaries are drawn—varies by offer type, tenancy model, and customer requirements. Specific services, patterns, and implementation guidance for each layer are explored later in the series. Tenancy design choices as an early architectural decision One of the earliest and most consequential architectural decisions is where the AI solution is hosted. Does it run in the publisher’s tenant, or is it deployed into the customer’s tenant? This choice establishes foundational boundaries and is difficult to change later without significant redesign. If the solution runs in the publisher’s tenant, it is inherently multi‑tenant and must be designed with strong logical isolation across customers. If it runs in the customer’s tenant, deployments are typically single‑tenant by default, with isolation provided through infrastructure boundaries. Many Marketplace AI apps fall between these extremes, making it essential to define the AI tenancy model early. Common tenancy approaches include: Publisher‑hosted, multi‑tenant solutions, where a shared AI runtime serves multiple customers and requires strict isolation of customer data, inference requests, identity, and cost attribution Customer‑hosted, single‑tenant deployments, where each customer operates an isolated instance within their own Azure subscription, often preferred for regulated or tightly controlled environments Hybrid models, which combine centralized AI services with customer‑hosted data or execution layers and require carefully defined trust and access boundaries Tenancy decisions influence several core architectural dimensions, including: Identity and access boundaries, which define how users and agents authenticate and act across tenants Data isolation, including how customer data is stored, processed, and protected Model usage patterns, such as shared models versus tenant‑specific models Cost allocation and scale, including how usage is tracked and attributed per customer These considerations are not implementation details—they shape how the AI system behaves, scales, and is governed in production. Reference architecture guidance for multi‑tenant AI and machine learning solutions in the Azure Architecture Center explores these tradeoffs in more detail. Understanding your customer’s needs Designing a production‑ready AI architecture starts with understanding the environment your customers expect your solution to operate in. Marketplace customers vary widely in their security posture, compliance obligations, operational practices, and tolerance for change. Architectures that reflect those realities reduce friction during onboarding, certification, and long‑term operation. Key customer considerations that shape architecture include: Security and compliance expectations, such as industry regulations, internal governance policies, or regional data requirements Target environments, including whether customers expect solutions to run in their own Azure subscription or are comfortable consuming centrally hosted services Change and outage windows, where operational constraints or seasonal restrictions require predictable and controlled updates Architectural alignment with customer needs is not about designing for every edge case. It is about making intentional tradeoffs that reflect how customers will deploy, operate, and depend on your AI solution in production. Specific security controls, compliance enforcement mechanisms, and operational policies are explored later in the series. This section establishes the architectural mindset required to support them. Separating environments for safe iteration Production AI systems must evolve continuously while remaining stable for customers. Separating environments is how publishers enable safe iteration without destabilizing live usage—and how customers maintain confidence when adopting and operating AI solutions in their own environments. From the publisher’s perspective, environment separation enables: Iteration on prompts, models, and orchestration logic without impacting production customers Validation of behavior changes before rollout, especially for AI‑driven systems where small changes can produce materially different outcomes Controlled release strategies that reduce operational risk From the customer’s perspective, environment separation shapes how the solution fits into their own development and operational practices: Where the solution is deployed across development, staging, and production environments How deployments are repeated or promoted, particularly when the solution runs in the customer’s tenant Whether environments can be recreated predictably, or whether customers are forced to manually reconfigure deployments with each iteration When AI solutions are deployed into the customer’s tenant, environment design becomes especially important. Customers should not be required to reverse‑engineer deployment logic, recreate environments from scratch, or re‑establish trust boundaries every time the solution evolves. These concerns should be addressed architecturally, not deferred to operational workarounds. Environment separation is therefore not just a DevOps choice—it is an architectural decision. It influences identity boundaries, deployment topology, validation strategies, and the shared operational contract between publisher and customer. Designing for AI‑specific scalability patterns AI workloads do not scale like traditional web or CRUD‑based applications. While front‑end and API layers may follow familiar scaling patterns, AI systems introduce behaviors that require different architectural assumptions. Production‑ready AI architectures must account for: Bursty inference demand, where usage can spike unpredictably based on user behavior or downstream automation Long‑running or multi‑step agent workflows, which may span tools, data sources, and time Model‑driven latency and cost characteristics, which influence throughput and responsiveness independently of application logic As a result, scalability decisions often vary by layer. Horizontal scaling is typically most effective in interaction, orchestration, and retrieval components, while model endpoints may require separate capacity planning, isolation, or throttling strategies. Treating identity as an architectural boundary Identity is foundational to Marketplace AI apps, but architecture must plan for it explicitly. Identity decisions define trust boundaries across users, agents, and services, and shape how the solution scales, secures access, and meets compliance requirements. Key architectural considerations include: Microsoft Entra ID as a foundation, where identity is treated as a core control plane rather than a late‑stage integration How users sign in, including: Their own corporate Microsoft Entra ID tenant B2B scenarios where one Entra ID tenant trusts another B2C identity providers for customer‑facing experiences How tenants authenticate, particularly in multi‑tenant or cross‑organization scenarios How AI agents act on behalf of users, including delegated access, authorization scope, and auditability How services communicate securely, using a zero‑trust posture where every call is authenticated and authorized Treating identity as an architectural boundary helps ensure that trust relationships remain explicit, enforceable, and consistent across tenants and environments. This foundation is critical for supporting secure operation, compliance enforcement, and future tenant‑linking scenarios. Designing for observability and auditability Production‑ready AI apps must be observable and auditable by design. Marketplace customers expect visibility into how systems behave in production, and publishers need clear insight to diagnose issues, operate reliably, and meet enterprise trust and compliance expectations. Key architectural considerations include: End‑to‑end observability, covering user interactions, agent reasoning steps, tool invocations, and downstream service calls Clear audit trails, capturing who initiated an action, what the AI system did, and how decisions were executed—especially when agents act on behalf of users Tenant‑aware visibility, ensuring logs, metrics, and traces are correctly attributed without exposing data across tenants Operational transparency, enabling effective troubleshooting, incident response, and continuous improvement without ad‑hoc instrumentation AI app observability design goes beyond infrastructure health. It must also account for AI‑specific behavior, such as prompt execution, model selection, retrieval outcomes, and tool usage. Without this visibility, diagnosing failures, validating changes, or explaining outcomes becomes difficult in real customer environments. Auditability is equally critical. Identity, access, and action histories must be traceable to support security reviews, regulatory obligations, and customer trust—particularly in regulated or enterprise settings. Common architectural pitfalls in Marketplace AI apps Even experienced teams run into similar challenges when moving from an AI prototype to a production‑ready Marketplace solution. The following pitfalls often surface when architectural decisions are deferred or made implicitly. Common pitfalls include: Treating AI as a single service instead of a system, where model inference is implemented without considering orchestration, data access, identity, observability, and operational boundaries Hard‑coding tenant assumptions, such as assuming a single tenant, identity model, or deployment topology, which becomes difficult to unwind as customer requirements diversify Not planning for a resilient model strategy, leaving the architecture fragile when model versions change, capabilities evolve, or providers introduce breaking behavior Assuming data lives within the same boundary as the solution, when in practice it may reside in a different tenant, subscription, or control plane Tightly coupling prompt logic to application code, making it harder to iterate on AI behavior, validate changes, or manage risk without full redeployments Assuming issues can be fixed after go‑live, which underestimates the cost and complexity of changing architecture once customers, subscriptions, and trust relationships are in place While these pitfalls may be caused by a lack of technical skill on the customer’s side, they could typically emerge when architectural decisions are postponed in favor of speed, or when AI behavior is treated as an isolated concern rather than part of a production system. What’s next in the journey The architectural decisions made early—around offer type, tenancy, identity, environments, and observability—establish the foundation on which everything else is built. When these choices are intentional, they reduce friction as the solution evolves, scales, and adapts to real customer needs. The next set of posts builds on this foundation, exploring different dimensions of operating, securing, and evolving Marketplace AI apps in production. See the next post in the series: Securing AI apps and agents on Microsoft Marketplace | Microsoft Community Hub. Key resources See curated, step-by-step guidance to help you build, publish, or sell your app or agent (no matter where you start) in App Advisor Quick-Start Development Toolkit can connect you with code templates for AI solution patterns Microsoft AI Envisioning Day Events How to build and publish AI apps and agents for Microsoft Marketplace Get over $126K USD in benefits and technical consultations to help you replicate and publish your app with ISV SuccessDesign CI/CD for AI apps and agents selling through Microsoft Marketplace
In the previous post, Design observability for AI apps and agents selling through Microsoft Marketplace, we focused on observability—making AI app and agent behavior visible and explainable. Execution paths, retries, degradation patterns, and agent decisions can now be observed across environments and tenants. With that visibility in place, a new challenge emerges: how do you safely modify an AI system whose behavior you can now observe? You can always get curated step-by-step guidance through building, publishing and selling apps for Marketplace through App Advisor. This post is part of a series on building and publishing well-architected AI apps and agents in Microsoft Marketplace. The series focuses on AI apps and agents that are architected, hosted, and operated on Azure, with guidance aligned to building and selling solutions through Microsoft Marketplace. Using continuous integration/continuous delivery (CI/CD) to control AI system evolution AI apps and agents introduce numerous novel ways that production behavior can change. In addition to application code, updates to configuration, prompts, models, and guardrails, agent logic can alter execution, cost, and outcomes—often immediately and across tenants. CI/CD defines how these changes reach production. Without a structured delivery path, behavior‑shaping updates risk entering runtime without validation or recovery paths, making system behavior difficult to explain or reverse once customers encounter it. AI solutions are typically built and operated as cloud applications. Software delivery of cloud services, and the supporting components that enable it, remains part of the CI/CD pipeline, and any instability in these foundational components directly propagates into AI behavior. AI systems add two additional sources of change that require explicit control. MLOps governs model evolution. Agents introduce further variability, as agent logic and configuration evolve. CI/CD is what prevents these change vectors from interacting unpredictably across both publisher and customer environments. Core CI/CD requirements for AI apps and agents For AI apps and agents, CI/CD determines whether deployment strategies can be applied safely. Progressive rollouts, ring deployments, feature flags, and kill switches all rely on pipelines that isolate change, validate behavior, and support rollback. Observability provides insight into behavior; CI/CD controls when and how that behavior is allowed to change. CI/CD must reliably provision, configure, and promote cloud native infrastructure, including but not limited to front-end services, APIs, storage, identity, and networking across environments. Agent behavior depends directly on the stability of the platform it runs on. AI systems introduce additional CI/CD requirements through MLOps and agents. Model versions, routing logic, and evaluation configurations must move through pipelines as deployable artifacts, with isolation, validation, and rollback built in. Changes to models affect latency, cost, and outcomes even when application code remains unchanged, making promotion controls necessary at the model layer. A well-run CI/CD pipeline should positively impact AI models and agents in the following ways: Change isolation ensures code, prompts, models, and configuration evolve independently. Artifact versioning beyond code treats prompts, policies, tools, and models as release assets. Behavioral validation evaluates outcomes, constraints, and patterns rather than single responses. Safe promotion controls gate model and agent releases based on observed behavior. Rollback readiness allows fast reversion when model or agent behavior degrades. Building behavioral baselines for AI solutions using CI/CD Before an AI system is built by a pipeline, it is built by a team. CI/CD build pipelines are where these contributions are stitched together. Product managers define scope and constraints. UX designers shape how behavior is experienced. Full‑stack engineers assemble application logic. AI engineers wire reasoning and tools. Data engineers and data scientists curate data and models. In AI systems, a build does more than compile code. It captures a shared agreement across roles about what the system is expected to do. Application code, orchestration logic, prompts, configuration, guardrails, routing rules, and trained or fine‑tuned models are assembled into a single versioned artifact. That artifact represents a coordinated snapshot of intent, behavior, and constraints. This coordination must declare which models, prompts, policies, and tool definitions are included. Implicit dependencies—such as dynamically changing prompts or unpinned models—break shared understanding across teams and introduce behavior changes without acknowledgement. A successful build confirms that contributions from multiple roles are compatible and executable together. It does not decide when customers see the change. That decision belongs later, where behavior can be evaluated deliberately, enforced by build pipelines that are separating assembly from release. Testing AI solutions with CI/CD pipelines When an agent is updated, the first task is straightforward: the agent’s code changes. Logic is refined, tools are added, limits are adjusted. That change moves through the CI/CD pipeline, where it is built, packaged, and validated in isolation. At this point, the focus is narrow—does this agent compile, configure, and execute as expected? The second step widens the lens. The update now moves through testing aligned to the layers beneath it. For cloud solutions, tests confirm the platform still behaves as assumed: infrastructure provisions correctly, APIs and identity boundaries remain intact, and dependencies remain reachable. These tests ensure the environment can support execution before behavior is evaluated. Next, MLOps tests assess whether model behavior still aligns with system expectations. New model versions, routing logic, or provider changes are evaluated for cost, latency, and outcome consistency. The goal is not identical responses, but bounded behavior within known limits. Finally, testing shifts to the agentic system as a whole. Other agents need to be made aware of the new capabilities. When you go to update the agent the first job you have to do is update the agent code. The second job you have to do is to use your CI/CD pipeline to build, test and release that code. The third job is to test that the entire agentic system is running smoothly together. At this stage, testing answers a different question: not does the agent work, but does the system still work together. CI/CD release management as team coordination Once testing confirms that behavior remains within expected bounds, release management determines how changes are introduced and observed under real conditions. In AI systems, release management must reflect where change originates and how risk propagates across layers. Within the cloud services that support the AI solution, release management focuses on scope and blast‑radius control. Examples include staged rollout of infrastructure updates, controlled exposure of new API versions, and limiting configuration changes to specific environments or tenants before going global. These steps allow both publisher and customer teams to observe stability and dependency behavior under load. For MLOps, release management governs behavioral shifts introduced by model changes. Common patterns include routing a small percentage of requests to a new model version, limiting exposure to specific customer segments, or restricting usage to defined request types. This allows teams to compare cost, latency, and outcome patterns before expanding exposure. For agents, release management controls how new behaviors surface. Prompt updates, tool access changes, or guardrail adjustments may be released to specific workflows, tenants, or traffic slices. This makes it possible to observe planning depth, retry behavior, and termination patterns without affecting all users simultaneously. Rollback readiness remains essential. Release paths must allow fast reversion using version pinning or traffic shifting rather than full redeployment. Release management creates space to observe, adjust, and respond before changes reach full Marketplace scale. Deployment as a shared boundary Effective deployment pipelines ensure that software, models, and agent behavior enter production together, with changes explicitly acknowledged and observable. Versioning and rollback remain available, but deployment defines the moment when coordinated decisions become customer‑visible. Cloud service—For the software, deployment governs application code and supporting platform changes. These remain necessary foundations. Application binaries, infrastructure templates, runtime configuration, and orchestration must enter production in a known, versioned state so operational behavior can be correlated with specific changes. MLOps—Model version updates, routing rules, provider switches, and evaluation configurations can change system behavior without modifying application code. Deployment pipelines must therefore treat these artifacts as deployable units, subject to the same versioning, promotion, and rollback mechanics as software releases. Agent—Deployment includes behavior‑defining inputs such as prompts and system messages, tool definitions and permissions, guardrails, and execution limits. Changes directly affect how agents plan, execute, and terminate work. Allowing these inputs to change outside deployment pipelines breaks traceability and weakens accountability across teams. How CI/CD best practices positively impact marketplace readiness Customers expect updates to arrive in predictable ways. They expect that behavior changes can be explained, that issues can be reversed without prolonged disruption, and that outcomes remain consistent across trials and production use. CI/CD pipelines make these expectations achievable by ensuring changes are versioned, staged, and observable as they move through environments. Reliability depends on limiting how far unstable behavior propagates. Billing accuracy depends on knowing when changes alter execution paths, token usage, or metering logic. Compliance depends on being able to identify which versions of software, models, and agent configurations were active at a given time. Offer type shapes how CI/CD is applied. For transactable SaaS offers, CI/CD operates entirely within the publisher’s environment. For container offers and Azure Managed Applications, deployment boundaries extend to customer environments requiring a CI/CD hand-off between publisher and customer pipelines. Publisher CI/CD responsibilities for AI solutions Publishers must define what constitutes a deployable change. Updates to software, models, prompts, agent configuration, guardrails, or limits should not enter customer environments or generally available code implicitly. Each change that can influence behavior must flow through the publisher’s CI/CD pipelines so it can be versioned, observed, and reversed if necessary. Additionally, CI/CD pipelines require validation and approval before promotion, ensuring that behavior‑altering updates do not reach customers without visibility or control. Publishers are also responsible for communicating behavior changes. Customers should be able to understand when updates affect outcomes, performance, or cost profiles. Customers should never experience silent behavior shifts, undocumented updates, or releases that cannot be recovered cleanly. When those occur, trust erodes quickly. In this context, CI/CD is part of how publishers establish reliability, accountability, and trust with Marketplace customers. Customer’s responsibility: CI/CD across environments (Dev / Stage / Prod) While publishers own CI/CD pipelines, customers play an important role in how AI systems are evaluated and adopted across environments. AI behavior often manifests differently across Dev, Stage, and Prod because operating conditions change as systems move toward real usage. As environments scale, dependency interactions increase, traffic patterns diversify, and tenant behavior becomes less predictable—revealing execution paths and constraints that are not exercised earlier. These differences affect how behavior appears during evaluation and rollout. To keep behavior interpretable across environments, pipeline structure matters. CI/CD pipelines, validation steps, and promotion criteria should operate consistently so signals observed earlier can be understood later. When these mechanics diverge between environments, it becomes difficult to attribute changes in behavior to specific updates or conditions. Staging environments serve as a behavioral proving ground. They allow customers to observe retries, limits, degradation paths, and cost behavior under conditions that more closely resemble production. Trials often run against production‑like configurations, which means CI/CD gaps surface early. When behavior differs from expectations, the consistency of pipelines determines how quickly teams can diagnose and respond. What’s next in the journey With CI/CD establishing control over how AI systems change, the next focus is how those changes are introduced safely at runtime. The following posts cover deployment strategies, progressive rollouts, and operational patterns that allow AI apps and agents to evolve while remaining stable, observable, and ready for Marketplace scale. Key resources See curated, step-by-step guidance to help you build, publish, or sell your app or agent (no matter where you start) in App Advisor Quick-Start Development Toolkit can connect you with code templates for AI solution patterns Microsoft AI Envisioning Day Events How to build and publish AI apps and agents for Microsoft Marketplace Get over $126K USD in benefits and technical consultations to help you replicate and publish your app with ISV SuccessDesign observability for AI apps and agents selling through Microsoft Marketplace
In the last post, API resilience and reliability patterns for AI apps and agents, we focused on what happens when AI systems encounter failure—and how resilient execution paths keep that failure contained. Timeouts fire with intent. Retries stay bounded. Circuit breakers provide overload protection. When resilience is designed well, your system continues to function even as conditions change. You can always get curated step-by-step guidance through building, publishing and selling apps for Marketplace through App Advisor. This post is part of a series on building and publishing well-architected AI apps and agents in Microsoft Marketplace. The series focuses on AI apps and agents that are architected, hosted, and operated on Azure, with guidance aligned to building and selling solutions through Microsoft Marketplace. Observability for AI systems AI apps and agents are shifting traditional observability, which was designed for systems based on simple assumptions, where requests followed linear paths and workloads behaved predictably. Execution in AI systems consumes tokens at a highly variable rate rather than fixed compute units. Requests unfold across multiple reasoning steps. Agents perform work that spans APIs, models, retrieval layers, and applications. A single interaction may pause, branch, retry, or exit early depending on inferred intent, context, and constraints. Instead of asking whether services are running, observability for AI systems asks: what is the system doing right now—and why? Is an agent spending its time reasoning, waiting on dependencies, retrying tool calls, or exiting early due to enforced limits? Is cost increasing because value is increasing, or because execution paths are expanding without progress? AI observability requirements shift the focus in the following subtle, but critical ways: From resource availability to workflow state From performance metrics to signals From incidents to patterns Core observability dimensions for AI apps and agents Once observability shifts toward understanding behavior, clarity comes from tracking state across the agents in the workflow. For AI apps and agents, observable indicators, such as those detailed below, show how work unfolds and changes during real usage—especially in trials and early adoption: Execution flow shows how a request moves through agents, tools, and workflows. This highlights where execution progresses smoothly, where it slows, and where it concludes early. This makes agent outcomes explainable and keeps behavior consistent across tenants. Cost and token behavior reveals how execution translates into consumption. Token usage per request, per agent step, and per retry shows where value is being delivered and where execution paths expand without proportional benefit. This insight connects runtime behavior directly to Marketplace billing expectations and evaluations. Latency and wait states distinguish active processing from time spent waiting on dependencies. Seeing where time is consumed helps explain slow experiences and guides decisions about optimization, caching, or resilience improvements. Failure classification provides structure when systems degrade. Separating tool failures from planning failures, and transient issues from terminal exits, keeps investigations focused and prevents protective behavior from being misread as instability. Tenant‑level patterns surface how behavior repeats at scale. Uneven load, and recurring degradation often appear first during trials and shape the customer's perception. Together, these dimensions turn telemetry into understanding—supporting clearer conversations, faster triage, and predictable execution as usage grows. Why observability matters By this point in the journey, your AI app or agent has implemented bounded execution paths, cost controls, and quality of service safeguards. As a result, failure degrades gracefully instead of spreading. These resilience techniques determine how your solution behaves under pressure. The data gathered from observability platforms like Application Insights and Azure Monitor explains why it behaves that way. For AI and agentic systems, infrastructure health alone rarely answers the questions that matter. Services can be up, CPUs can be idle, and queues can look healthy while agents loop inefficiently, retries quietly expand cost, or workflows exit early without delivering value. From the customer’s perspective, the experience feels inconsistent even though the platform appears stable. Observability closes this gap by revealing system behavior rather than system status. It shows how requests move, where work concentrates, and how constraints shape outcomes. At Marketplace scale, these patterns repeat across tenants and trials. What appears once during an evaluation often appears again as adoption grows. Observability connects runtime behavior back to the design choices introduced in earlier posts: Usage‑based billing introduced variability in consumption Performance optimization introduced tradeoffs among latency, quality, and cost Resilience patterns introduced controlled failure and bounded execution Observability allows you to explain outcomes during trials, validate assumptions as usage grows, and operate with confidence across customers and environments. Without this visibility, teams react to symptoms. With it, they recognize patterns. From execution paths to behavioral signals Observability begins at the same place resilience begins—API boundaries. These boundaries define where responsibility shifts and where behavior becomes visible. Observability focuses on signals that explain decisions made by the system as it executes instead of relying on raw logs that describe isolated events. Every resilience mechanism emits behavioral signals. Viewed together, these signals provide far more value than logs alone. Logs answer whether something happened. Behavioral signals explain why it happened and how the system responded. Circuit breakers change state as load builds and recedes. Retry loops show whether failures resolve quickly or exhaust their limits. Timeout enforcement reveals where dependencies slow execution. Fallback paths and early terminations show how the system protects itself while preserving outcomes for customers. This perspective matters most for agents. Agent execution unfolds as a series of choices—plan, call a tool, retry, exit early—rather than a single request‑response cycle. Observability that tracks these decisions makes agent behavior understandable, consistent, and defensible as usage grows across customer tenants. Observability at the agent layer As AI systems become more agent‑driven, observability needs to move closer to where decisions are made. Agents introduce variability by design. They plan, adapt, and choose workflow paths dynamically. Without first‑class visibility into that behavior, execution can appear unpredictable even when the underlying system is healthy. Observability at the agent layer acts as the feedback loop that keeps execution safely bounded. It shows how agents use the freedom you give them—and where that freedom begins to stretch into inefficiency. Observability follows how the agent did its job instead of treating the agent’s interaction as a single outcome. Several indicators help make agent behavior understandable. Step count per request reveals how much reasoning effort a prompt requires. Planning iterations show whether an agent converges quickly or cycles through alternatives. Tool invocation frequency highlights when agents rely heavily on external systems. Early exits compared to full completion explain whether limits and fallbacks activate as designed. Taken together, these indicators help distinguish healthy exploration from inefficient reasoning and degraded execution. An agent exploring briefly before converging adds value. An agent looping through tools without progress signals pressure, uncertainty, or dependency issues. This distinction reinforces a core principle of agentic systems: models reason probabilistically, adapting to context as it changes. Your system observes deterministically—measuring execution, enforcing boundaries, and clarifying outcomes. When those roles stay separate and well‑instrumented, agent behavior becomes transparent, predictable, and ready for Marketplace scale. Observability across environments The type of Marketplace offer you choose shapes what observability customers expect and how responsibility is shared. For SaaS offers, publishers typically own end‑to‑end execution. Observability centers on agent behavior, workflow completion, token usage, latency, and dependency impact across tenants. Publishers rely on consistent signals—often surfaced through tools like Azure Monitor, Application Insights, and Microsoft AI Foundry—to explain how requests behave as scale and load increase. For container‑based offers and Azure Managed Applications, observability expectations are more distributed. Publishers expose clear execution outcomes, limits, and failure signals at application boundaries. Customers, in turn, observe infrastructure health, scaling behavior, and downstream systems within their own environments. This separation ensures each party has visibility into what they control without creating ambiguity. Learn more about Choosing your marketplace offer type for AI Apps and agents. Execution behavior differs across environments for predictable reasons. Scale increases, tenant mix broadens, and external dependencies behave differently under real load. What must stay consistent is how behavior is interpreted. Signal definitions, thresholds, and failure classification should mean the same thing in Dev, Stage, and Prod. Learn more about designing a reliable environment strategy for Microsoft Marketplace AI apps and agents. Staging environments are where this consistency is validated. Observing retries, timeouts, and graceful degradation before production prepares you for Marketplace evaluations, which often resemble production conditions. Observability gaps tend to appear first during customer evaluation—when clarity matters most. Publisher and customer visibility boundaries Purpose: Parallel Post #13 responsibility clarity, now for observability As observability matures across environments, clarity around responsibility becomes essential. For Marketplace solutions, trust grows when publishers and customers each see what they own—and understand where that visibility ends. Publishers are responsible for instrumenting execution paths end to end. That means making workflows traceable, limits visible, and failure modes explainable. Observability should surface behavior—how requests progressed, where execution concluded, and why—rather than exposing raw internal errors that require insider knowledge to interpret. Customers focus their observability on what they control. This includes monitoring downstream systems, infrastructure behavior, and environment‑level alerts within their own estate. When visibility aligns with ownership, teams can act quickly and decisively. Exposing too much internal detail can overwhelm customers and blur accountability. Observing too little behavior creates friction, especially when issues cross boundaries and lack context. Clear visibility enables faster triage, sharper ownership boundaries, and fewer escalations rooted in ambiguity. Observability as an enabler for scale, billing, and trust From a customer’s perspective, observability answers two fundamental questions: Can I understand what happened? and Can I trust this at scale? When the answer to both is clear, observability becomes part of the value your Marketplace offering delivers. When system behavior is visible and explainable, customers gain confidence that adoption and growth will remain predictable. Observability directly supports usage‑based billing by tying execution behavior to measured consumption. Clear visibility into token usage, retries, and execution paths helps validate how usage is calculated and supports transparent billing conversations. It also enables ongoing performance tuning and caching strategies by showing where latency accumulates, where work repeats, and where optimization delivers measurable impact. Observability reinforces confidence in resilience mechanisms, confirming that limits, fallbacks, and degradation paths activate as designed under real‑world conditions. Beyond validation, observability creates a continuous feedback loop. Execution data informs pricing adjustments, guides changes to limits, and helps refine default configurations as customer behavior evolves. What’s next in the journey With execution behavior observable and explainable, the focus shifts to how AI systems are operated safely as change accelerates. The upcoming posts will discuss deployment strategies, CI/CD pipelines for agents, and progressive rollouts build on this foundation—ensuring AI apps evolve confidently as usage and expectations grow. Key Resources See curated, step-by-step guidance to help you build, publish, or sell your app or agent (no matter where you start) in App Advisor Quick-Start Development Toolkit can connect you with code templates for AI solution patterns Microsoft AI Envisioning Day Events How to build and publish AI apps and agents for Microsoft Marketplace Get over $126K USD in benefits and technical consultations to help you replicate and publish your app with ISV SuccessAPI resilience and reliability patterns for AI apps and agents selling through Microsoft Marketplace
Why API resilience is a Marketplace readiness requirement The previous post Design Predictable AI Performance for Apps Selling Through Microsoft Marketplace showed how to design systems that behave predictably when things go right. This post focuses on what happens when they do not. Imagine an enterprise customer launching a trial of your AI agent from Microsoft Marketplace. The first few interactions work beautifully. Then a more complex request triggers a multi‑step agent workflow: retrieval, enrichment, validation, approval. One downstream API stalls for just long enough to push the workflow beyond its timeout. The agent retries. The retry fans out into additional calls. Tokens burn. Costs rise. Eventually the entire interaction fails ambiguously. From the customer’s perspective, the trial just “didn’t work” with no explanation or architecture diagram. Just a stalled agent and decreased confidence. AI apps and agents treat APIs as their execution backbone. Every model invocation, tool call, retrieval query, and workflow step depends on APIs behaving within expected bounds. Solutions with a single unstable dependency can affect many tenants simultaneously. You can always get curated step-by-step guidance through building, publishing and selling apps for Marketplace through App Advisor. This post is part of a series on building and publishing well-architected AI apps and agents in Microsoft Marketplace. The series focuses on AI apps and agents that are architected, hosted, and operated on Azure, with guidance aligned to building and selling solutions through Microsoft Marketplace. How AI and agentic workloads stress APIs differently Traditional API platforms often assume linear, predictable request patterns. One request in, one response out. AI apps produce bursty, non‑linear traffic shaped by user behavior, token budgets, and inference variability. Agents amplify this further. A single user request may trigger planning, branching logic, parallel tool calls, and dynamic retries—all before returning a result. Single‑turn inference calls tend to be synchronous and bounded. Agent workflows may run for minutes, traverse multiple services, and consume tokens unpredictably depending on intermediate outcomes. Happy‑path assumptions break down quickly. Reliability also compounds mathematically. If you chain five APIs, each with 99.9% availability, the composite reliability drops to roughly 99.5%. Add retries without bounds, and the system can degrade traffic rather than absorb failure. For AI systems, reliability must be defined across multiple dimensions: Availability: Are dependencies reachable? Timeout behavior: How long will the system wait? Error propagation: What information crosses boundaries? Recovery safety: Can operations be retried without harm? Data access and integrity: Is contextual data available, relevant, and trustworthy? Defining reliability for AI systems Reliability becomes the mechanism that preserves trust when uncertainty appears. Reliability in AI systems is more than “the model didn’t fail.” That framing is incomplete. True reliability means providing predictable behavior under partial failure, bounding execution when dependencies degrade, and failing clearly, safely, and consistently instead of unpredictably. For publishers providing AI solutions on Marketplace, this includes protecting customers from ambiguous states—workflows that half‑complete, retries that silently multiply costs, or agents that continue planning after their assumptions are no longer valid. Designing resilient API boundaries The shift toward reliable AI systems starts with how you think about API boundaries. In this context, an API boundary is the line where responsibility changes—between your app and a dependency, between orchestration and execution, or between your system and a customer‑ or partner‑owned service. These boundaries are deliberate points of control. You must decide: how long is a call allowed to run? What happens if it fails? Is a retry safe, and if so, how many times? When agents assume that APIs will be reliable, fast, or always available, failure starts becoming systemic. Well‑designed API boundaries stop execution early when reliability assumptions break. Explicit timeouts keep your system from waiting indefinitely when a dependency slows or an API call hangs. Bounded retries allow brief recovery without inflating cost, load, or complexity. Together, these constraints help your system behave predictably, even under stress. This is where your enforcement layers come into focus. For many Marketplace solutions, Azure API Management is where you turn design intent into predictable behavior. At this boundary, you define how your system responds under pressure—how much traffic is allowed, how tokens are budgeted, and how long requests are permitted to run. These policies give you a steady way to shape execution across tenants, even when the systems behind the boundary behave unpredictably. As workflows grow more complex, orchestration layers such as Azure Durable Functions or Logic Apps carry that intent forward. They give you a way to manage long‑running or multi‑step operations explicitly, with clear execution limits, defined retry behavior, and compensating actions when steps fail so you can keep control over how work progresses and how it concludes. Core API resilience patterns for AI apps and agents Several foundational patterns appear repeatedly in resilient AI solutions published on Marketplace. Timeouts and deadline propagation ensure no call waits indefinitely. For AI workloads, these limits should be token‑aware—longer prompts or higher‑cost models require proportional constraints. Deadlines should propagate across calls so upstream services remain informed. Bounded retries protect against transient failures but with pre-defined limits and quotas. In agent workflows, retries should be explicit, counted, and observable. Retrying API calls that execute actions, attempt and fail authentications, or create updates that exceed quotas can lead to runaway failures. Circuit breakers prevent cascading failure by opening when error rates exceed thresholds. Unlike guardrails—which enforce policy by intent—circuit breakers react to system state by pausing execution paths that are no longer reliable. Azure API Management and resilience libraries such as Polly in .NET provide practical implementations. Bulkheads isolate high‑risk or high‑cost operations. Separate concurrency pools, queues, or compute tiers prevent one tenant or workflow from consuming disproportionate resources. This is especially critical for expensive reasoning paths or third‑party dependencies. Idempotency keeps retries safe by ensuring that repeating the same request produces the same result. Agents that take real‑world actions—creating records, approving workflows, triggering payments—must attach idempotency keys so repeat attempts do not multiply side effects. Together, these patterns do not eliminate failure. They contain it. Agent‑specific reliability risks and mitigations Agent autonomy shifts how reliability behaves in practice. Agents change the shape of failure. Because they plan, reason, and act across multiple steps, a single issue rarely stays isolated. When autonomy increases, failures affect more of the workflow and do so faster. Most agent failures fall into two categories and treating them the same way creates instability. Tool failures occur when an external dependency slows, times out, or becomes unavailable. An API may reject a request, enforce a quota, or fail temporarily. These failures require containment. Your system should pause execution, apply fallback behavior, or exit cleanly once limits are reached. Allowing the agent to keep calling tools under these conditions increases cost and load without improving results. Planning failures occur when the agent’s reasoning breaks down. The plan itself is flawed, incomplete, or loops without converging on an outcome. These failures require correction. Step limits, loop detection, and execution caps keep planning from expanding indefinitely and signal when the system should stop and reassess. Making this distinction explicit is what keeps agent behavior predictable. You define how far execution can go—how many steps are allowed, how long a request may run end‑to‑end, and when the system should pause or conclude. By enforcing these limits outside the model, you give agents room to reason while your system provides the structure that contains failure and keeps execution steady as conditions change. As explored in Designing AI Guardrails for Apps and Agents in Microsoft Marketplace, guardrails define what an agent is allowed to do. Resilience patterns determine how your system holds up when dependencies degrade. Together, they enable agents that feel capable and autonomous while remaining stable, bounded, and ready for Marketplace scale. Reliability across external and third‑party APIs Marketplace AI apps rarely operate in isolation. They depend on customer‑owned systems, partner services, SaaS platforms, and external LLM APIs—each with different SLAs and failure modes. Publishers must absorb this variability rather than pass it directly to customers. That means handling throttling gracefully, surfacing authentication failures clearly, and isolating quota exhaustion. Token‑based rate limiting via Azure API Management is especially important for downstream LLM calls, where cost and availability intersect. Remember the SLA math: your effective reliability is the product of every dependency. Designing for the weakest link protects customer perception—and your own margins. Environment‑aware reliability validation As outlined in Designing a reliable environment strategy for Microsoft Marketplace, environment strategy underpins reliable promotion and confident scaling. Reliability cannot be tested only in production. Before Marketplace submission, failure behavior should be validated in staging. Timeouts should trigger as expected. Retries should stop when designed to stop. Circuit breakers should open—and close—predictably. Equally important is environment consistency. Dev, Stage, and Prod environments should enforce the same resilience policies, even if scale differs. Otherwise, failures will appear only when customers are watching. Azure Chaos Studio provides controlled fault injection to test these scenarios intentionally. The goal is to confirm that systems behave consistently under stress. Reliability, ownership, and Marketplace readiness As a publisher, you are responsible for resilient defaults, protection against cascading failures, predictable failure modes, and documented service expectations. Customers, in turn, remain responsible for the reliability of their downstream systems, environment‑level scaling, and internal monitoring. When this boundary is explicit, teams know where responsibility sits and how to respond when conditions change. When ownership is unclear, support escalations increase, accountability blurs, and confidence drops on both sides. Marketplace customers expect clarity about what your solution controls, what it depends on, and how issues are handled when they arise. That clarity directly shapes Marketplace readiness. Reliable execution paths influence certification reviews, determine whether enterprise pilots progress, and establish long‑term operational confidence. During trials, predictable behavior feels professional. It reduces surprise costs, shortens evaluation cycles, and makes adoption decisions easier. In this way, reliability acts as a trust signal and a sales enabler. When customers see that ownership is well-defined and failure is handled intentionally, AI adoption through Marketplace feels safe, bounded, and ready to scale. What’s next in the journey Once execution paths are resilient, your solution’s behavior becomes visible. Circuit breaker transitions, retry frequency, timeout events, and error propagation turn into operational signals that show how your AI app or agent behaves under real load and across customer tenants. This foundation enables the next layer of operational maturity—observability, safe deployment practices, CI/CD for agents, and ongoing evaluation—so you can understand behavior end‑to‑end and operate confidently as usage grows. Reliability makes AI adoption safe; observability makes it sustainable. Key Resources See curated, step-by-step guidance to help you build, publish, or sell your app or agent (no matter where you start) in App Advisor Quick-Start Development Toolkit can connect you with code templates for AI solution patterns Microsoft AI Envisioning Day Events How to build and publish AI apps and agents for Microsoft Marketplace Get over $126K USD in benefits and technical consultations to help you replicate and publish your app with ISV SuccessDesign predictable AI performance to scale selling through Microsoft Marketplace
Trade-offs in AI performance: latency, quality and cost Imagine a software company launches a customer trial for its new AI assistant through Microsoft Marketplace. The trial begins smoothly — until more complex queries take longer than a few seconds to return a response. The cause isn’t model failure. It’s an unbounded Retrieval‑Augmented Generation (RAG) pipeline retrieving 50 documents per query before synthesizing an answer. Latency increases. Runtime token usage expands. Trial‑stage infrastructure cost rises immediately. This exposes the core runtime tradeoff in enterprise AI systems: Latency ↔ Quality ↔ Cost Improving response quality often increases retrieval depth. Increasing retrieval depth expands token usage. Expanded token usage drives both cost and latency upward. This post is part of a series on building and publishing well-architected AI apps and agents in Microsoft Marketplace. The series focuses on AI apps and agents that are architected, hosted, and operated on Azure, with guidance aligned to building and selling solutions through Microsoft Marketplace. You can always get curated step-by-step guidance through building, publishing and selling apps for Marketplace through App Advisor. How traditional cost model assumptions break down for AI In classic software models, you expect predictable runtime costs such as license allocations, storage, compute time, bandwidth consumption, etc. But in AI-powered systems, that stability gives way to new complexities driven by token-based cost structures. These costs scale in unexpected ways, depending on the length of generated outputs, the depth of information retrieval, the number of reasoning steps an agent performs, and how often external tools are invoked. Consider the RAG pipeline scenario: retrieving five documents for a single query might create a 3,000-token prompt. If the pipeline instead pulls 50 documents, that prompt balloons to 15,000 tokens—before the AI even begins to infer an answer. And the unpredictability doesn’t stop there. Agent orchestration can introduce even more variability. Planning steps may stretch or shrink depending on the query, tool-calling systems might retry failed executions multiple times, and multi-branch workflows can run in parallel, all amplifying token consumption and cost. Keep costs bounded without sacrificing quality While unpredictable token usage and orchestration steps can quickly escalate infrastructure costs in AI-powered systems, design choices can prevent runaway expenses without compromising the quality of responses. To achieve this, engineers must balance procurement expectations set by pricing with real-time operational controls. For instance, use a multi-model tiered routing strategy to allow less complex queries to be handled by lightweight models, reserving advanced reasoning models for more demanding tasks. Combining this with token budgeting strategies—such as per-session caps and API Management token-limit policies—ensures that each interaction remains within defined boundaries. Cost-aware orchestration paths become essential when running AI workloads across multiple tenants, especially when retries and multi-branch workflows threaten to multiply inference consumption. By calibrating runtime guardrails to performance and cost signals, AI systems can be designed to fail gracefully and predictably, preventing ambiguous and expensive failures. Ultimately, the goal is to deliver high-quality results at scale, maintaining control over both costs and performance as usage grows. Achieving predictable latency: Business best practices across each layer For enterprise AI systems, ensuring fast and consistent response times—while balancing quality and cost—is a top priority. Predictable latency requires intentional design at every layer of your architecture. Interaction Layer: Set clear boundaries for incoming requests using Azure API Management rate‑limit and quota policies, such as rate-limit-by-key, scoped per subscription or tenant. These controls cap request throughput and request volume over time, preventing traffic spikes from overwhelming downstream AI services and ensuring consistent, predictable response behavior across tenants. Orchestration Layer: Define and restrict system execution paths. Limit reasoning depth in workflows so complex operations don’t unexpectedly slow things down. This keeps your business processes running smoothly and predictably. At the API boundary, Azure API Management can enforce deterministic routing, retry limits, and timeout policies, while backend orchestration services such as Azure Durable Functions or Logic Apps manage multi‑step workflows with explicit bounds on execution depth and retries. Model Layer: Choose models based on expected concurrency needs. Use fallback routing to redirect traffic during busy periods—so users don’t experience delays. Rely on Azure OpenAI Provisioned Throughput Units (PTUs) for steady baseline performance and enable PAYG overflow to handle temporary surges without sacrificing speed. Microsoft AI Foundry can be used to centrally manage model selection and routing policies, enabling consistent fallback strategies and governed use of multiple models across agents and workloads. Retrieval Layer: Optimize your document indexing and narrow the scope of data being searched. This means users get relevant information faster, and your system avoids unnecessary slowdowns. Services such as Azure AI Search enable scoped, indexed retrieval over structured and unstructured content, while integrating with Azure Blob Storage or Azure Cosmos DB as source data stores to support predictable, low‑latency access for RAG‑based AI workflows. Data Layer: Keep your compute and storage resources close together and aligned regionally. By minimizing cross-region data transfers, you reduce latency and boost reliability—critical for enterprise-grade AI. Across every layer, publishers are responsible for designing bounded, predictable defaults, while customers govern configuration, scale, and operational posture—a clear separation that reduces friction, improves trial outcomes, and accelerates Marketplace adoption. By applying these best practices decisively at every layer, software development companies can move beyond isolated optimizations and design AI solutions that behave predictably under real customer load. This approach enables customers to run meaningful trials, validate performance and cost assumptions early, and scale with confidence as demand grows. More importantly, it establishes a repeatable engineering foundation—one that supports faster iteration, clearer operational ownership, and successful commercialization through Microsoft Marketplace. Design caching into your architecture from the start Predictable AI performance relies on caching that’s intentionally designed into the architecture—not added after systems are already under load. In agent‑driven and retrieval‑augmented workflows, caching is foundational to controlling latency, stabilizing runtime costs, and keeping execution behavior consistent as usage scales. Effective designs cache work wherever outcomes are deterministic. Request‑level and semantic caching reduce redundant inference when users submit identical or meaning‑equivalent queries, while Azure API Management paired with Azure Managed Redis enables governed reuse at the intent level. Retrieval pipelines benefit from embedding and retrieval caching, which avoids repeated vectorization and unnecessary search overhead. Within orchestration flows, tool‑level caching ensures stable responses for deterministic calls such as policy checks or configuration lookups, and agent plan caching allows reasoning paths to be reused without re‑incurring planning cost. Caching must be paired with clear invalidation strategies—time‑based expiration, context‑aware refresh, and event‑driven updates—to preserve correctness and trust. In Marketplace deployments, multi‑tenant cache isolation and observability are essential. When caching is visible, governed, and intentional, it becomes a powerful enabler of predictable scale. What’s next in the journey With performance and cost under control, the next question is how your system behaves when something goes wrong. The next post explores API resilience and reliability patterns—because predictable performance only matters if your AI system continues to function through the inevitable failures that occur at Marketplace scale. Key Resources See curated, step-by-step guidance to help you build, publish, or sell your app or agent (no matter where you start) in App Advisor Quick-Start Development Toolkit can connect you with code templates for AI solution patterns Microsoft AI Envisioning Day Events How to build and publish AI apps and agents for Microsoft Marketplace Get over $126K USD in benefits and technical consultations to help you replicate and publish your app with ISV SuccessDesign predictable usage-based billing for AI apps and agents selling in Microsoft Marketplace
Design predictable usage‑based billing for AI apps and agents selling on Microsoft Marketplace Compared to traditional software, pricing and billing feel harder because of the range of AI functionality. They reason, they infer, call tools, process data, all, to complete tasks on the customer’s behalf. If you’re building an AI app or agent to sell in Microsoft Marketplace, usage‑based billing needs to be designed with care, instrumented with intention, and explained in a way customers can trust. This post, along with App Advisor’s curated step-by-step guidance through building, publishing and selling apps for Marketplace, walks through how to do exactly that—without over‑engineering or surprising your customers later. This post is part of a series on building and publishing well-architected AI apps and agents in Microsoft Marketplace. The series focuses on AI apps and agents that are architected, hosted, and operated on Azure, with guidance aligned to building and selling solutions through Microsoft Marketplace. Why billing for AI systems is different Traditional software pricing is usually tied to static entitlements, such as licenses, seats, fixed feature sets and/or a predictable runtime footprint. AI apps and agents don’t work that way. Their cost and value are driven by runtime behavior, such as: How often a model is invoked How many tokens are processed per request How deep reasoning chains go How frequently tools or APIs are called How much data is accessed, transformed, or embedded AI behaviors are subject to change based on the interpretation of prompts and subsequent outputs processed by agents and models. That variability is why pricing AI like traditional software often creates friction—margins erode and customers may lose trust. Pricing decisions should start with business value in mind, not the meter level. Start with plan design before you define meters Plans explain pricing. Meters enforce pricing. Your Marketplace plan is where customers learn what they are buying and how it works. Before you design a single metered dimension, your plan should clearly answer: What AI behaviors are allowed What usage is included What usage becomes billable What limits apply How customers upgrade as they grow An effective plan design typically considers several key factors, such as the distinction between public and private plans, the allocation of included usage versus charges for overages, the balance of base fees against variable consumption, and the provision of clear upgrade paths across different tiers. For instance, if you’re creating an AI support agent, a well-structured plan might offer up to 1,000 resolved conversations each month for a set monthly fee, with additional charges for any conversations beyond that limit and a higher tier that grants access to increased usage allowances. When customers can easily understand what is included, what triggers extra costs, and how they can upgrade as their needs grow, metering feels straightforward and fair. Conversely, when plan details are ambiguous, even accurately measured charges can seem arbitrary, leading to uncomfortable billing discussions. Choose a billing model that matches how your AI behaves When structuring your AI solution’s pricing, begin by evaluating the expected usage patterns and the business value your AI delivers. Actively consider the nature of your agent’s workloads, the variability of customer interactions, and the predictability of operating costs. Flat Fee: Weigh the benefits of flat rate or subscription pricing. Opt for fixed monthly or annual fees when your AI solution operates within defined limits and usage remains consistent. This approach simplifies billing for customers and provides them with clear expectations. Subscription pricing works best for AI agents whose engagement is steady and whose costs don’t fluctuate dramatically. Usage-based (metered): If your AI’s usage varies widely or scales rapidly, usage-based (metered) pricing is often preferable. This model aligns charges with actual consumption, ensuring customers pay only for what they use. To implement it, leverage Marketplace metering APIs to track and bill usage accurately. Consider usage-based pricing when customer demand is unpredictable or your AI’s operational costs increase with higher workloads. Hybrid: For AI solutions that deliver ongoing baseline value but occasionally handle intensive tasks, hybrid models combine the strengths of both approaches. Offer a base subscription for predictable service, then layer in usage charges for overages. This structure is common for agents serving regular needs with intermittent spikes, enabling you to manage cost recovery while giving customers cost certainty. Metering looks different depending on your offer type As you move forward with your plan design and billing model, it’s important to recognize that metering varies significantly based on how your solution is delivered. SaaS offers: Usage tracking is accomplished through Marketplace Metering APIs, allowing you to capture AI-driven activities such as agent task executions, workflow runs, document analysis, or token processing. Your metering should align closely with the customer’s subscription lifecycle, plan tiers, and the included usage, ensuring transparency and consistency as customers progress through different service levels. Container-based offers: You might meter resources like nodes, cores, pods, or clusters—or even application-specific AI dimensions. Accurate attribution across tenants and deployments is crucial, so customers are billed reliably according to their actual consumption. Virtual machine offers: Metering is generally linked to VM runtime or license usage. Although the granularity is often lower than SaaS solutions, billing remains contractually enforced, and publishers must ensure that measurements are dependable and align with customer agreements. Azure Managed Applications: Metering should reflect solution management exclusively, while the underlying infrastructure costs are handled separately through Azure’s billing system. For more about offer types, visit Marketplace Offer Types for AI Apps and agents: SaaS vs Managed App vs Containers. Design metered dimensions customers can actually explain As you refine your billing model for Marketplace offers, it’s vital to consider how your metered dimensions will be perceived and understood by your customers. The most effective dimensions reflect clear, customer-visible value rather than abstract internal system mechanics. For AI-driven solutions, this often means tracking tangible outcomes such as agent tasks executed, successful workflows completed, data objects processed, or AI-assisted actions performed. Choosing these straightforward metrics not only makes invoices easier for customers to interpret but also strengthens your position during billing reviews by tying charges directly to business outcomes. For example, “documents analyzed” is a much clearer and more defensible metric than “token batches processed,” and “resolved workflows” resonates more with customers than “model invocations.” Ultimately, a strong metered dimension is one that a customer can easily explain to their finance or procurement teams. If the charge isn’t readily understandable, it’s a signal to revisit and refine your measurement approach. Track and plan metrics using the Microsoft Marketplace metering service APIs Under‑reporting impacts revenue. Marketplace enforces billing based on what you report. Once you've determined how your solution will be delivered and understood how metering varies by offer type, the next step is to ensure your billing model is both transparent and robust. This is accomplished by tracking your plan and meter metrics through the Microsoft Marketplace Metering Service APIs —a process that not only supports accurate billing but also builds customer trust. Instrumenting usage at runtime is essential: you must reliably capture and report consumption, making sure each event is precisely recorded and associated with the correct subscription and plan. Aggregating this usage and sending it to the marketplace—whether hourly or daily, covering the previous 24 hours—ensures billing remains consistent and defensible. Add metering guardrails to avoid cost surprises As you implement usage-based metering for your Marketplace offers, it’s essential to build guardrails that protect both your business and your customers from unexpected costs. Metering is a critical component of your service reliability, directly influencing customer trust and the overall transparency of your billing model. Ensuring your metering remains both dependable and customer-focused is crucial for maintaining trust and transparency. As you instrument your solution, take care to attribute usage precisely across multiple tenants, so every charge is accurately mapped to the correct customer and subscription. Additionally, aggregating usage on a consistent schedule—such as hourly or daily—not only supports predictable reporting but also helps customers better understand their consumption patterns. These practices lay a solid foundation for metering that supports both your business objectives and your customers’ needs, creating a seamless experience that aligns with the overall goals of your Marketplace offering. Marketplace-ready offerings typically feature: Usage caps that set clear maximums, limiting exposure to unforeseen charges. Soft limits with proactive alerts as customers approach their thresholds. Hard limits to enforce plan boundaries and prevent overages beyond agreed levels. Transparent usage dashboards, giving customers real-time visibility into their consumption. For example, when a customer reaches 80% of their allotted usage, they receive an alert and can decide whether to upgrade their plan, pause usage, or proceed into overage with full awareness—eliminating surprise invoices at month’s end. What’s Next in the Journey After establishing robust billing and metering, the next step is to enhance your AI solution’s performance, optimize API workloads, and improve production observability—laying the groundwork for scalable, efficient, and reliable operations. These capabilities help keep AI systems cost‑effective and reliable as usage grows. Key Resources See curated, step-by-step guidance to help you build, publish, or sell your app or agent (no matter where you start) in App Advisor Quick-Start Development Toolkit can connect you with code templates for AI solution patterns Microsoft AI Envisioning Day Events How to build and publish AI apps and agents for Microsoft Marketplace Get over $126K USD in benefits and technical consultations to help you replicate and publish your app with ISV SuccessIntegrate Marketplace commerce signals to enforce entitlements in AI apps
How fulfillment and entitlement models differ by Microsoft Marketplace offer type AI apps and agents increasingly operate with runtime autonomy, dynamic capability exposure, and on‑demand access to tools and resources. That flexibility creates a new challenge for software companies: enforcing commercial entitlements (what a customer is allowed to access or use at runtime) correctly after a customer purchase through Microsoft Marketplace. Marketplace is the system of record for commercial truth, but enforcement always lives in your application, agent, or deployed resources. This post explains how Marketplace fulfillment and entitlement models differ by offer type—and what that means when you’re designing AI apps and agents that must respond correctly to subscription state, plan changes, and cancellations. You can always get a curated step-by-step guidance through building, publishing and selling apps for Marketplace through App Advisor. This post is part of a series on building and publishing well-architected AI apps and agents in Microsoft Marketplace. The series focuses on AI apps and agents that are architected, hosted, and operated on Azure, with guidance aligned to building and selling solutions through Microsoft Marketplace. Why AI apps and agents must integrate with Marketplace commerce signals Microsoft Marketplace is the commercial system of record for: Tracking purchase and subscription state Managing plan selection and plan changes Signaling cancellation and suspension AI apps and agents, by contrast, operate in environments where decisions are made continuously at runtime. They expose capabilities dynamically, invoke tools conditionally, and often operate without a human in the loop. That mismatch makes static enforcement insufficient, including: UI‑only checks Configuration‑time gating Prompt‑based constraints Marketplace communicates commercial truth, but it does not enforce value. That responsibility always belongs to the publisher’s application, agent, or deployed resources. Correct integration starts with understanding what Marketplace provides—and what your software must implement. What Marketplace provides—and what publishers must implement Before diving into APIs or offer types, it’s important to separate responsibilities clearly. Marketplace provides authoritative commercial signals, including: Subscription existence and current state Plan and entitlement context Licensing or usage boundaries associated with the offer Marketplace does not: Enforce your business logic Control runtime behavior Automatically limit feature or resource access Publishers are responsible for translating Marketplace signals into: Application behavior Agent capabilities Resource access boundaries That enforcement must be deterministic, auditable, and aligned with what the customer actually purchased. How those signals surface—through APIs, deployment constructs, licensing context, or metering—depends entirely on the fulfillment and entitlement model of the offer. How fulfillment and entitlement models differ by offer type Microsoft Marketplace supports multiple offer and fulfillment models, including: SaaS subscriptions Azure Managed Applications Container offers Virtual machine offers Other specialized Marketplace offer types Each model determines: How a customer receives value Where commercial signals appear Which integration mechanisms apply Where entitlement enforcement must occur Some offers rely on Marketplace APIs. Others rely on deployment‑time enforcement, resource scoping, or usage constraints. There is no single integration pattern that applies to every offer. Understanding this distinction is essential before designing entitlement enforcement for AI apps and agents. Marketplace integration responsibilities by offer type This section is the technical anchor of the post. Marketplace APIs are not universal; they apply differently depending on the offer model. SaaS offers SaaS offers integrate directly with Microsoft Marketplace through the SaaS Fulfillment APIs. These APIs are used to: Activate subscriptions Track plan changes Enforce suspension and cancellation In this model, Marketplace communicates subscription lifecycle events, but it does not enforce access. The publisher must: Map Marketplace subscriptions to internal tenants Maintain a durable subscription record Enforce entitlements at runtime For AI apps and agents, that enforcement typically happens in orchestration logic or tool‑invocation boundaries—not in the UI or prompts. SaaS Fulfillment APIs are the primary mechanism for receiving commercial truth, but the application remains responsible for acting on it. Container offers Container offers deliver value as container images and associated artifacts, such as Helm charts. In this model, the publisher is shipping a deployable artifact—not an application endpoint or API managed by Marketplace. Marketplace provides: Entitlement to deploy the container image Optional usage‑based billing and metering Ability to deploy to an existing AKS cluster or to a publisher configure one Enforcement occurs at: Deployment time, by controlling access to images Runtime usage, through configuration and limits Metered dimensions, when usage‑based billing applies For AI workloads packaged as containers, entitlement enforcement is typically embedded in the runtime configuration, resource limits, or metering logic—not in Marketplace APIs. Virtual machine offers Virtual machine offers are fulfilled through VM image deployment. In this model: Fulfillment is based on VM deployment Licensing and usage are enforced through the VM lifecycle Subscription state is less event‑driven but still contractually binding While there is no SaaS‑style fulfillment callback, publishers must still ensure that deployed workloads align with the purchased offer. For AI solutions delivered via VM images, enforcement is tied to licensing, configuration, and operational controls inside the VM. Azure Managed Applications For Azure Managed Applications, fulfillment is enforced through the Azure Resource Manager (ARM) deployment lifecycle. In this model: A Marketplace purchase establishes deployment rights Resources are deployed into a managed resource group Operational boundaries are defined by ARM and Azure role assignments Publishers enforce value through: Deployment behavior Resource configuration Lifecycle management and updates For AI solutions delivered as managed applications, entitlement enforcement is tied to what is deployed and how it is operated—not to an external subscription API. Marketplace establishes the contract, and Azure enforces access through infrastructure boundaries. Other offer types Other Marketplace offer types follow similar patterns, with varying degrees of API involvement and deployment‑time enforcement. The key principle holds: Marketplace establishes commercial rights, but enforcement is always implemented by the publisher, using the mechanisms appropriate to the offer model. Designing entitlement enforcement into AI apps and agents Entitlements must be enforced outside the model. Large language models should never be responsible for deciding what a customer is allowed to do. Effective enforcement belongs in: The interaction layer The orchestration layer Tool invocation boundaries Avoid: UI‑only enforcement Prompt‑based entitlement logic Soft limits without auditability AI agents should request capabilities from deterministic services that already understand subscription state and plan entitlements. This ensures enforcement is consistent, testable, and resilient. Handling plan changes, upgrades, and feature tiers Plan changes are common in Microsoft Marketplace. AI capability must align continuously with: The active subscription tier Purchased dimensions or limits Common examples include: Agent autonomy limits Tool or connector access Rate limits Data scope Feature gating must be deterministic and testable. When a plan changes, your application or agent should respond predictably—without manual intervention or redeployment. Failure, retry, and reconciliation patterns Marketplace events are not guaranteed to be: Ordered Delivered once Immediately available AI apps must handle: Duplicate events Missed callbacks Temporary Marketplace or network failures Reconciliation processes protect customers, publishers, and Marketplace trust. Periodic verification of subscription state ensures that runtime enforcement remains aligned with commercial reality. How Marketplace API integration affects readiness and review Marketplace reviewers look for: Clear enforcement of subscription state Clean suspension and revocation paths Strong integration leads to: Faster certification Fewer conditional approvals Lower support burden after launch Correct enforcement is not just a technical requirement—it’s a Marketplace readiness signal. What’s next in the journey Once entitlement enforcement is solid, the next layer of operational maturity includes: Usage‑based billing and metering architecture Performance, caching, and cost optimization Observability and operational health for AI apps and agents Key resources See curated, step-by-step guidance to help you build, publish, or sell your app or agent (no matter where you start) in App Advisor Quick-Start Development Toolkit can connect you with code templates for AI solution patterns Microsoft AI Envisioning Day Events How to build and publish AI apps and agents for Microsoft Marketplace Get over $126K USD in benefits and technical consultations to help you replicate and publish your app with ISV SuccessDesign tenant linking to scale selling on Microsoft Marketplace
Designing tenant linking and Open Authorization (OAuth) directly shapes how customers onboard, grant trust, and operate your AI app or agent through Microsoft Marketplace. This post explains how to design scalable, review‑ready identity patterns that support secure activation, clear authorization boundaries, and enterprise trust from day one. Guidance for multi‑tenant AI apps Identity decisions are rarely visible in architecture diagrams, but they are immediately visible to customers. In Microsoft Marketplace, tenant linking and OAuth consent are not background implementation details. They shape activation, onboarding, certification, and long‑term trust with enterprise buyers. When identity decisions are made late, the impact is predictable. Onboarding breaks. Permissions feel misaligned. Reviews stall. Customers hesitate. When identity is designed intentionally from the start, Marketplace experiences feel coherent, secure, and enterprise‑ready. This post focuses on how software development companies (like ISVs) can design tenant linking and consent patterns that scale across customers, offer types, and Marketplace review—without rework later. You can always get curated step-by-step guidance through building, publishing and selling apps for Marketplace through App Advisor. This post is part of a series that focuses on AI apps and agents that are architected, hosted, and operated on Azure, with guidance aligned to building and selling solutions through Microsoft Marketplace. Why identity across tenants is a first‑class design decision Designing identity is not just about authentication. It is about how trust is established between your solution and a customer tenant, and how that trust evolves over time. When identity decisions are deferred, failure modes surface quickly: Activation flows that cannot complete cleanly Consent requests that do not match declared functionality Over‑privileged apps that fail security review Customers who cannot confidently revoke access These are not edge cases. They are some of the most common reasons Marketplace onboarding slows or certifications are delayed. A good identity and access management design ensures that trust, consent, provisioning, and operation follow a predictable and reviewable path—one that customers understand and administrators can approve. Marketplace tenant linking requirements A key mental model simplifies everything that follows: separate trust establishment from authorization. Tenant linking and OAuth consent solve different problems. Tenant linking establishes trust between tenants OAuth consent grants permission within that trust Tenant linking answers: Which customer tenant does this solution trust? OAuth consent answers: What is this solution allowed to do once trusted? AI solutions published in Microsoft Marketplace should enforce this separation intentionally. Trust must be established before meaningful permissions are granted, and permission scope must align to declared functionality. Making this distinction explicit early prevents architectural shortcuts that later block certification. Throughout the rest of this post, tenant linking refers to trust establishment, not permission scope. Microsoft Entra ID as the identity foundation Microsoft Entra ID provides the primitives for identity-based access control, but the concepts only become useful when translated into publisher decisions. Each core concept maps to a choice you make early: Home tenant vs resource tenant Determines where operational control lives and how cross‑tenant trust is anchored. App registrations Define the maximum permission boundary your solution can ever request. Service principals Determine how your app appears, is governed, and is managed inside customer tenants. Managed identities Reduce long‑term credential risk and operational overhead. Understanding these decisions early prevents redesigning consent flows, re‑certifying offers, or re‑provisioning customers later. Marketplace policies reinforce this by allowing only limited consent during activation, with broader permissions granted incrementally after onboarding. Importantly, activation consent is not operational consent. Activation establishes the commercial and identity relationship. Operational permissions come later, when customers understand what your solution will actually do. OAuth consent patterns for multi‑tenant AI apps OAuth consent is not an implementation detail in Marketplace. It directly determines whether your AI app can be certified, deployed smoothly, and governed by enterprise customers. Common consent patterns map closely to AI behavior: User consent Supports read‑only or user‑initiated interactions with no autonomous actions. Admin consent Enables agents, background jobs, cross‑user access, and cross‑resource operations. Pre‑authorized consent Enables predictable, enterprise‑grade onboarding with known and approved scopes. While some AI experiences begin with user‑driven interactions, most AI solutions in Marketplace ultimately require admin consent. They operate asynchronously, act across resources, or persist beyond a single user session. Aligning expectations early avoids friction during review and deployment. Designing consent flows customers trust Consent dialogs are part of your product experience. They are not just Microsoft‑provided UI. Marketplace reviewers evaluate whether requested permissions are proportional to declared functionality. Over‑scoped consent remains one of the most common causes of delayed or failed certification. Strong consent design: Requests only what is necessary for declared behavior Explains why permissions are needed in plain language Aligns timing with customer understanding Poor explanations increase admin rejection rates, even when permissions are technically valid. Clear consent copy builds trust and accelerates approvals. Tenant linking across offer types Identity design must align with offer type; a helpful framing is ownership: SaaS offers The publisher owns identity orchestration and tenant linking. Microsoft Marketplace reviewers expect this alignment, and mismatches surface quickly during certification. Containers and virtual machines The customer owns runtime identity; the publisher integrates with it. Managed applications Responsibility is shared, but the publisher defines the trust boundary. Each model carries different expectations for control, consent, and revocation. Designing tenant linking that matches the offer type reduces customer confusion. When consent actually happens in Marketplace lifecycle Many identity issues stem from unclear timing. A simple lifecycle helps anchor expectations: Buy – The customer purchases the offer Activate – Tenant trust is established Consent – Limited activation consent is granted Provision – Resources and configurations are created Operate – Incremental operational consent may be requested Revoke – Access and trust can be cleanly removed Making this sequence explicit in your design—and in your documentation—dramatically reduces confusion for customers and reviewers alike. How tenant linking shapes Marketplace readiness Identity tends to leave a lasting impression as it is one of the first architectural design choices encountered by customers. Strong tenant linking and consent design leads to: Faster certification (applies to SaaS offer only) Fewer conditional approvals Lower onboarding drop‑off Easier enterprise security reviews These outcomes are not accidental. They reflect intentional design choices made early. What’s next in the journey Tenant identity sets the foundation, but it is only one part of Marketplace readiness. In upcoming guidance, we’ll connect identity decisions to commerce, SaaS Fulfillment APIs, and operational lifecycle management—so buy, activate, provision, operate, and revoke work together as a single, coherent system. Key Resources See curated, step-by-step guidance to help you build, publish, or sell your app or agent (no matter where you start) in App Advisor Quick-Start Development Toolkit can connect you with code templates for AI solution patterns Microsoft AI Envisioning Day Events How to build and publish AI apps and agents for Microsoft Marketplace Get over $126K USD in benefits and technical consultations to help you replicate and publish your app with ISV Success
