Delay in Marketplace Revenue Being Reported in Revenue Report
We're having an issue where we're missing a large chunk of our July 2026 revenue being reported in our https://partner.microsoft.com/en-us/dashboard/insights/commercial-marketplace/analytics/revenue. We usually see a small delay of up to a few days for the previous month's revenue to show up, but it's been over 2 weeks now and we're still missing a large portion of our expected Revenue. We've confirmed in our service that we sent the correct meters and we haven't churned a large chunk of our customer base. Is there a place we can go or API we can call to pull more up to date information? Or is there a known delay in August that is causing a longer-than-usual delay?Microsoft Marketplace Partner Digest
What's new in Marketplace Convert more buyers into customers Microsoft recently expanded Marketplace listing capabilities with enhancements to free trials and the introduction of an option to request private offers, giving partners more ways to engage buyers at different stages of the purchasing journey. Customers can now discover and evaluate solutions through expanded trial experiences and transition more easily into paid subscription discussions by requesting custom pricing and terms directly from your Marketplace listings. ✨ Help customers evaluate your solution with free trials What's new On July 23 we announced the release of Marketplace enhanced trial capabilities. Customers can try solutions with confidence with the free trials in Microsoft Marketplace. Trials are available for multiple offer types, including SaaS, Azure virtual machines, Dynamics 365, and Power BI offers. New capabilities include: Custom meter trials: Partners can configure trials for SaaS solutions with metered pricing. Flexible trial durations: Partners can now configure SaaS trial durations from 1 to 180 days. Partner analytics: Partners can access SaaS trial analytics - including free trials initiated, active free trials, free trials converted, free trials not converted, and average trial duration - all within Partner Center Insights workspace. Customer discovery and management: Customers can better discover and manage trials. Upgrade to paid subscription during trial: Customers can upgrade to paid subscription at public pricing any time during a SaaS trial. Why it matters With enhanced trial capabilities in Microsoft Marketplace, partners can run self-service trials that make it easier for customers to try before they buy — whether for metered, per-user, or flat-rate pricing offers. Marketplace gives partners one place to manage trials end to end — from provisioning and mid-trial changes to insights — while improving offer discoverability through improved search, filters, and dedicated trial badges. Recommended action Review your Marketplace offers and trial strategy. For eligible SaaS offers, evaluate whether free trials can help you engage with more qualified buyers, faster. 📖 Learn more about free trials for SaaS ⚡ Customers can now request a private offer on Marketplace What’s new As of July 20, you can add a private offer request option directly on your Marketplace product pages. Customer requests are captured as Marketplace leads in referrals workspace and connected customer relationship management (CRM) integrations you’ve setup. This setting is disabled by default. You can easily activate it for applicable public offers. Why it matters More and more customers are seeking customized contracts and subscription pricing and terms tailored to their individual needs. This simple call to action reduces friction and helps you start the conversation with prospective buyers. Recommended action In the Marketplace offers workspace of Partner Center, update each of your offers for which you provide customers private offers. Enable the Request Private Offer setting and republish the offer. Events Recent events Multiparty private offers expand channel growth opportunities in Australia, Japan and South Africa Multiparty private offers continue to help software companies accelerate channel-led sales through Microsoft Marketplace. This past month, we hosted two region-focused Marketplace office hours sessions designed to help partners better understand local market opportunities, engage distributors and resellers, and scale Marketplace transactions through channel ecosystems in Australia and Japan. Whether you're looking to expand an existing Marketplace motion or explore new geographic opportunities, these sessions will provide practical guidance and market-specific insights to help you grow. See a list of currently supported countries/regions. Check out the recorded sessions: • Channel growth in Australia (English) • Channel growth in Japan (Japanese) Helping developers build, monetize, and scale AI solutions with Marketplace Discover how Microsoft Marketplace helps software companies access AI models and developer tools, accelerate application development, and reach customers through Microsoft's global commercial ecosystem. Learn how to monetize applications and agents without building and maintaining your own commerce and distribution infrastructure. Watch the recording Upcoming events Build AI-powered solutions, monetize through Microsoft Marketplace, and scale revenue through Microsoft expertise, skilling, and investments. Frontier Accelerate for Marketplace is an upcoming unified offering for software development companies to bring AI-powered solutions to market, drive customer acquisition and revenue growth, and scale through Microsoft Marketplace with technical guidance, skilling, and investments aligned to every stage of growth. 📆 Join us on August 26th before general availability to learn about the new offering, benefit alignment, migration guidance, and enrollment requirements. Next steps Turn insights into FY27 success — starting today. Ready to carry the momentum forward from MCAPS Start for Partners? Get everything you need to refine and execute your FY27 strategy in the Partner Activation Zone, including session recordings, ready-to-use playbooks, and tools to start building pipeline. Leverage your Marketplace Rewards benefits Discover use cases and how to leverage your Azure sponsorship. With Marketplace Rewards Azure sponsorships, eligible software development companies can increase sales through Microsoft Marketplace by using the sponsorships for customer deployments tied to Marketplace deals—and to offset infrastructure costs from eligible free trial offers. 📍Review the Marketplace Rewards Azure sponsorship policy guide for the latestHelp partners convert more trials into revenue with enhanced Marketplace capabilities
New enhanced trial capabilities in Microsoft Marketplace are now available, helping software development companies accelerate customer acquisition, improve trial-to-paid conversion rates, and gain deeper visibility into trial performance. With expanded support for SaaS offers, including metered, per-user, and flat-rate pricing models, partners can give customers more opportunities to evaluate solutions through a trusted, self-service Marketplace experience. The latest enhancements introduce configurable SaaS trial durations from 1–180 days, simplified trial management, improved solution discoverability through dedicated trial badges and filters, and actionable analytics within Partner Center Insights. Partners can track free trials, monitor conversion trends, and optimize their Marketplace growth strategy using data-driven insights. Learn how these new capabilities can help you reach more customers, reduce operational overhead, and turn customer interest into revenue. Learn more about the enhanced trial capabilitiesMicrosoft Marketplace Partner Digest
In this edition of the Microsoft Marketplace Partner Digest, you'll find essential announcements, events, and key updates designed to drive your business forward, accelerate deal closures, and maximize your Marketplace success. Partner Center announcements As we kick off the new fiscal year, we're building upon a quarter that delivered valuable enhancements for both Marketplace partners and customers. We’ve focused on expanding partner-led growth across regions, simplifying SaaS transactions, and helping you improve co-sell outcomes. 🌍 Multiparty private offers expand across EMEA and APAC On May 27, Microsoft Marketplace expanded multiparty private offers to 30 countries in Europe, with availability in Australia, Japan, and South Africa coming July 15. Read the blog to discover how we are enabling new opportunities for channel-led growth through Marketplace. Why it matters Software companies gain more opportunities to reach new customers and drive growth without adding operational complexity. Channel partners differentiate their offerings with vetted software solutions while maintaining customer relationships. Recommended action Microsoft’s Jason Rook breaks down six practical steps to activate your channel strategy through Microsoft Marketplace, helping software companies recruit, enable, and scale partner-led growth. 📗Get the playbook 🌏 Resale enabled offers support expands to New Zealand Microsoft continues expanding channel-led sales opportunities by making resale enabled offers available through Microsoft Marketplace to customers in New Zealand as of May 26. Why it matters Channel partners can create and manage offers directly, without relying on software companies to build bespoke private offers. For software companies, resale enabled offers provide a scalable way to grow through trusted channel partners and expand into new markets. 👉 Learn more 📆 Custom contract lengths As of July 6, custom contract lengths for private offers are generally available. Partners can now create private offers with custom contract lengths of up to 10 years in Microsoft Marketplace. Why it matters Flexibility to better meet customer requirements Ability to configure contract durations from 1 to 120 months Define non-standard contract lengths, like 18 months or 45 months Support for both SaaS and professional services transactions 👉 Read the announcement ⚡ Auto activation for SaaS offers On May 18, Microsoft released the optional auto activation for SaaS offers, streamlining customer's Marketplace purchase and onboarding experience. What’s new Billing and subscription activation can now begin immediately when a customer completes a purchase Partners receive a real-time webhook signal to trigger onboarding Available for both public and private offers Default behavior For existing plans auto activation is off, unless you enable it When creating new plans auto activation is on, by default, unless you disable it Why it matters Reduces friction between purchase and onboarding Improves revenue predictability with immediate billing Enables a faster, more seamless customer experience Recommended action Evaluate your SaaS offers and enable auto activation where it aligns with your onboarding model. Make sure your sales and customer guidance reflect the updated experience. 👉 Learn more 🔔 Improve referral quality to accelerate co-sell deals Microsoft has updated how inbound co-sell referrals are reviewed and processed to improve speed and alignment with Microsoft account teams. What’s changing All referrals are now automatically checked for completeness and quality at submission. To avoid delays, ensure every referral includes: Solution area / play Estimated deal value Estimated close date (valid future date) Clear customer need and business context Customer contact (or consent to share later) Why it matters Submitting complete referrals helps you: Get faster seller engagement Reduce rework and follow-ups Improve acceptance rates Move deals forward more predictably Recommended action Audit your referral submission process and ensure these five fields are consistently included across all deals. 👉 Learn more about managing co-sell opportunities ⚠️ Review: Ensure the right contacts receive important partner communications Now is a great time to take care of digital housekeeping. Microsoft is reminding partners to review assigned Partner Center roles and email configurations to avoid missing critical notifications and account updates. Why it matters Having assigned roles like global admin or billing admin does not guarantee email delivery. If accounts aren’t configured correctly, you and your team may miss time-sensitive notifications. Missing communications can result in missed compliance deadlines or delayed actions that may impact your business. Recommended actions Verify your primary contact email is up to date Ensure role-based accounts can receive emails Add Microsoft system emails as safe senders Review role guidance on Microsoft Learn ✨ Bonus: Sign up for the monthly Microsoft AI Cloud Partner Program newsletter to stay informed of updates, incentives, and partner opportunities. It’s an easy way to get partner news delivered directly to your inbox. Events Recent events Marketplace as a FinOps platform Explore how Microsoft Marketplace helps simplify purchasing, centralize billing, and better align software investments to optimize cloud spending. As organizations scale cloud and AI investments, managing spend across tools and vendors becomes more complex. Tune in to learn practical ways to better understand the ROI of your organization’s cloud and AI investments. You will walk away with actionable insights to use Microsoft Marketplace as part of your FinOps strategy 📽️ Watch the recording The Marketplace playbook for channel-led sales Get step-by-step guidance and go-to-market resources to help you recruit and activate partners for channel-led sales through Microsoft Marketplace. Through resale enabled offers and multiparty private offers, software companies can empower partners to sell on their behalf to drive scale, reach new markets, and unlock new co-sell opportunities. In markets where both resale enabled offers and multiparty private offers are available, software companies can also scale through distributors, who can activate their broader channel networks. 📽️ Watch the recording Multicurrency transactions explained As Marketplace adoption continues to grow more partners are navigating sales that involve multiple currencies, local customer invoicing, and evolving seller of record responsibilities. Understanding how currency exchanges impact private offers, partner payments, and customer billing is critical to successfully managing Marketplace transactions across global geographies. 📽️ Watch the recording Upcoming events Channel growth in Australia ⌚Wednesday, July 15 at 9:30 AEST Microsoft Marketplace provides several ways for partners to collaborate and grow through the channel. With multiparty private offers launching in Australia on July 16, alongside resale enabled offers, this expansion helps partners strengthen customer relationships, fuel more partner-to-partner opportunities, simplify transactions, and find new growth opportunities. Leave with practical guidance on how these capabilities work together and how to put them into action. 📆 Save to your calendar MCAPS Start for Partners 📆 Wednesday, July 22 from 7:00 – 11:00 am PDT MCAPS Start for Partners gives software companies an early look at Microsoft’s FY27 priorities, investments, and growth opportunities. Learn how AI innovation and agentic applications are creating new customer demand, discover marketplace and co-sell opportunities to expand reach, and explore strategies to modernize, differentiate, and grow your business in the year ahead. 👉 Learn more and register today 🚀 Closing thoughts The last quarter delivered meaningful platform enhancements to make Microsoft Marketplace easier to scale, faster for customers to discover solutions and transact, and more effective for partners to manage business. 👍 Take the next step Explore new regions for multiparty private offers and resale enabled offers Review your strategy for activation of customer SaaS subscriptions Improve your co-sell submission quality Small changes in these areas can have a big impact on your pipeline, conversion, and overall Marketplace success.A cautionary tale if you have customers who use Coupa
We learned the very very very hard way that next-day Marketplace invoicing does NOT play nicely with Coupa. Here's what happened: Back in April, we closed a Marketplace transaction via private offer with one of our enterprise customers. Not a new customer, either - this was for a license extension with a current customer with which we'd transacted through Marketplace twice before. 30 days go by, and Partner Center still shows the invoice as 'uncollected.' 60 days go by, and Partner Center still shows the invoice as 'uncollected.' I open a ticket with Marketplace support. And kudos to them, they pick up my ticket within an hour. "Customer hasn't paid the invoice," they tell us. So now we are forced to take on the role of collections agency for a Microsoft invoice our customer hasn't paid and for which we don't know why they haven't paid. (Partner Center's Revenue reports are rather light on useful details.) Our buyer inside the customer also has no idea why the invoice wasn't paid: She sits far away from the folks who pay the Microsoft bills. Her colleague in IT who pushed the buttons to purchase the private offer likewise has no idea why the invoice wasn't paid: He too sits far away from accounts payable. We're baffled because never before have we had any delay in getting our payouts for this customer's Marketplace purchases. Our first thought is okay, maybe they now have custom net 60 payment terms with Microsoft. (A different issue we experienced on a different delayed payout back in January!) After ten days of intensive investigations involving nearly a dozen different people, we finally discover the source of the issue: The customer pays its Microsoft bills through Coupa, BUT: they did NOT know about nor integrate into Coupa workflow the (relatively new) next-day invoicing mechanism for Marketplace transactions. For their accounts payable team, if an invoice doesn't land in Coupa, it doesn't exist. The invoice for this Marketplace purchase was generated, but it got sent . . . nowhere, I guess? So in picking up my support ticket, Marketplace Support could only say "Customer hasn't paid the invoice." They probably had no way to know the correct response was "Customer hasn't received the invoice." Moral of the story: Ask your customers if they use Coupa. And if yes, prepare them for the possibility they might not receive the invoice for your software.
Introducing Windows Ready Print and Modernized Driver Selection
Windows Ready Print: A clearer path to modern printing on Windows Printing on Windows is evolving. As printing environments modernize, customers and partners are asking for solutions that are reliable, secure, and easy to manage across today’s devices. To reflect this shift and make the value of our platform clearer, we are evolving the Modern Print Platform under a new name: Windows Ready Print. Windows Ready Print highlights what matters most: a streamlined, dependable printing experience built for modern Windows environments. It represents our commitment to simplifying printing, aligning modern standards, and delivering consistent, forward-looking experiences for users, IT admins, and partners. Driving the transition to Windows Ready Print with driver selection controls At the core of Windows Ready Print is a transition away from legacy, third party drive-based workflows toward modern, standards-based printing with IPP (Internet Printing Protocol) using the Windows inbox IPP printer driver. Starting in July 2026, new printer installations will default to Windows Ready Print where supported, enabling a simpler and more reliable setup experience. This change reduces the need for traditional driver management and lays the foundation for a more scalable and predictable print experience. However, we recognize that not all environments can move to Windows Ready Print immediately. To ensure a smooth and flexible transition, we are introducing the ability for users to configure Windows to install their printers using Windows Ready Print (if supported) or the OEM printer driver during installation. You can find this setting under Settings > Bluetooth & Devices > Printers & Scanners > Default install printer using Windows Ready Print. This feature enables users and IT admins to control how Windows selects drivers when installing printers: When “Default install printers using Windows Ready Print” is enabled, Windows Ready Print installation is preferred When “Default install printers using Windows Ready Print” is disabled, default driver selection is used The configuration applies to new printer installations only, without affecting existing devices. To enable/disable this feature via group policy, go to: Launch Group Policy Editor Navigate to Local Computer Policy -> Administrative Templates -> Printers Find and select 'Configure Windows Ready Print driver ranking' -> double click to open it Select 'Enabled' (if you wish to enable Windows Ready Print driver selection) or 'Disabled' (if you wish to explicitly disable Windows Ready Print driver selection). Select Apply Select OK How driver selection configuration works with Windows protected print mode When you enable "Default install printers using Windows Ready Print”, new printer installations will default to Windows inbox IPP printer driver when supported. When you enable Windows protected print mode, printers are exclusively installed with Windows Ready Print. Devices that do not support Windows Ready Print cannot be installed. Note: When you’ve enabled Windows protected print mode, you cannot disable "Default install printers using Windows Ready Print".Pitch Maker Agent: Turn Copilot Chat Signals into Microsoft 365 Copilot Deals
Executive Summary Customers are already using free Copilot Chat at scale, but adoption is often ungoverned and disconnected from the Microsoft 365 workloads where measurable productivity and risk controls live. The Pitch Maker Agent (BETA) helps partners convert Partner Center Copilot growth opportunity signals into customer-ready narratives—reducing pitch preparation from days to minutes and improving consistency across stakeholders (replace with your measured baseline). What it enables (partner outcomes) Turn raw usage signals into an executive business case with clear opportunity, risk, and next steps. Standardize value conversations across IT and business buyers while keeping customer context specific. Accelerate conversion from exploration to governed deployment by anchoring on Microsoft 365 workloads. Why it’s different Evidence-led: uses Partner Center Copilot growth opportunities (ASPX) signals rather than generic prompts. Buyer-ready: outputs a structured narrative (not a feature list) designed for executive alignment and action. Inputs required Partner Center Copilot growth opportunities export (all columns) for the target customer. The Opportunity: From AI Exploration to Enterprise Direction The move from free Copilot Chat to Microsoft 365 Copilot is a timing advantage: customers have intent and familiarity, but need a governed path that ties AI to real work in Teams, Outlook, Excel, and beyond. Advisory gap: translate usage metrics into business insight executives can fund. Governance gap: balance opportunity with security, compliance, and lifecycle controls. Workflow gap: connect AI usage to measurable outcomes inside Microsoft 365 workloads. How the Agent Works (BETA) The Agent follows a simple, repeatable flow to generate an executive-ready pitch narrative from Partner Center Copilot growth opportunity signals. See the agent in action below. In three steps Upload the Partner Center Copilot growth opportunities export (all columns). Run the Agent to translate usage signals into a customer-specific executive narrative. Use the generated business case, recommendations, and next steps in the customer conversation. What the Output Enables Translate Partner Center signals into a fundable business case, faster. Improve executive alignment by presenting opportunity, risk, and plan in one narrative. Increase repeatability across accounts with a consistent structure and messaging. The figure below illustrates how the Agent turns usage signals into a concise, executive-ready pitch narrative and action plan. Figure 1. From Copilot Chat signals to an executive pitch narrative and next-step plan. For customers, the conversation shifts from features to outcomes—clear productivity impact, role-based change, and risk-aware governance. Deployment and Execution The Agent is delivered as a solution package and deployed through Copilot Studio with a straightforward publish-and-run flow. Prepare Partner Center ASPX export (all columns) and validate sensitivity labels. Import the solution package into Copilot Studio. Verify dependencies, publish the Agent, and enable access in Microsoft 365 Copilot and Teams. Run the guided pitch flow by uploading customer data and capturing the narrative output. The run guide provides step-by-step visuals for data preparation, import, publication, and how to use the output in customer conversations. Why This Matters for Partner Practices The Pitch Maker Agent (BETA) supports a repeatable value motion: identify opportunity, align stakeholders, and move customers from experimentation to governed Microsoft 365 Copilot adoption. Higher conversion: clearer executive rationale anchored in evidence and outcomes. Lower effort: less time drafting, more time on discovery and delivery. Better governance: built-in prompts to address risk, readiness, and controls early. Call to Action This week: 15-minute start Locate the solution package and run guide in the Agent folder. Deploy the Agent in Copilot Studio and publish to Microsoft 365 Copilot/Teams. Export Partner Center Copilot growth opportunities data and validate sensitivity labels. Upload the dataset and generate a customer-specific executive pitch narrative. Resources Helpful links to learn more and access supporting materials: Partner Center Copilot growth opportunities data GitHub repository Overview: Run guideScaling Seller Impact with ASPX Insights: From Data Access to AI-Driven Execution
ASPX Insights in Partner Center Most sellers are not constrained by opportunity; they are constrained by time and signal. With up to 70% of effort spent on administrative work, portfolio coverage continues to expand while insight quality declines. Sellers are forced to manually interpret fragmented telemetry across multiple systems, slowing decision-making and reducing precision in where they focus. The result is missed revenue signals, delayed interventions, and inconsistent execution at scale. Productivity is not just about efficiency, it is about enabling every seller to consistently identify and act on the highest-value opportunity, in real time. To drive consistent, data-led growth across Security and AI Business Solutions, partners should connect to ASPX Insights within Partner Center. This provides direct access to adoption propensity models, customer telemetry, and actionable account-level insights across Microsoft 365 Copilot, E7, and Agent 365 scenarios. Access to ASPX Insights is only the starting point. The real value comes from how you operationalise that data and surface it directly to sellers in the flow of work. The most effective pattern is to build a lightweight “opportunity agent” that connects to ASPX data via API and translates telemetry into clear actions. This ensures your sales teams have the right conversation with the right customer at the right time - Conversations that are backed by intelligent insights to help guide your customer's on their AI and security journey. The Architecture ASPX Insights is powered by Partner Center data and exposes rich telemetry and propensity signals that can be accessed programmatically. This allows partners to move beyond dashboards and embed insights directly into seller workflows. As demonstrated in internal adoption patterns, partners can connect to ASPX via API and pull Customer-level adoption and usage telemetry Copilot, Security, and Agent usage signals Propensity scores for expansion, adoption, and conversion Licensing, whitespace, and engagement indicators The M365 Partner API – AI Business Solutions & Security Insights allows partners to ground an agent in real, actionable data rather than static pipeline assumptions. By pulling live telemetry and seat-level signals directly into the agent, the solution continuously reflects actual customer usage patterns - who is adopting, who is stalled, and where there is untapped potential. This means opportunity identification is no longer based on periodic reporting or manual interpretation, but on near real-time behavioural insight. As a result, account prioritisation, upsell motions, and intervention strategies are driven by evidence rather than instinct, enabling account teams to act with precision and focus on the highest-impact opportunities across their portfolio. The agent should act as a translation layer between raw telemetry and seller action. The goal is not to expose more data, but to remove ambiguity and tell the seller exactly where to focus. A simple architecture looks like this: Data layer Ingest ASPX Insights data via API on a daily or scheduled basis. Optionally store monthly snapshots to track trends and smooth out variability. This creates both real-time signal and historical context. With the data layer you have a couple of options. You can integrate directly into Partner Centre ASPX Insights by using the API. This is technically complex and may have a longer lead time to see results. Alternatively, to see results with less complexity, you can simply download snapshots of the data monthly from ASPX Insights in Partner Centre. This is manual but easy to achieve and offers a shorter time to value for your agent. Scoring layer Use ASPX propensity outputs directly or combine them with your own logic to rank accounts across a small set of opportunity lenses Expansion ready (Copilot scale) Conversion ready (free to paid) At risk (low adoption vs paid licenses) Transformation ready (Agent 365 and advanced AI scenarios) These align directly with the machine learning models and signals already surfaced in ASPX. Action layer Translate scores into next best actions Who to engage Why now What motion to run (sell, enable, expand, govern) This is where agents create value. Sellers should not see raw dashboards. They should see prioritised accounts and recommended actions. Internal Adoption Path The key design principle is simple: bring insight into the tools sellers already use. CRM integration Push ranked accounts and recommendations directly into CRM as opportunities, tasks, or account insights. This ensures data becomes part of pipeline management, not a separate activity. Copilot / Agent interface Expose the agent through Microsoft 365 Copilot or a custom chat interface where sellers can ask Which customers should I prioritise this week Which accounts are ready for Copilot or E7 expansion Where are my adoption risks The agent queries the ASPX-backed dataset and returns structured recommendations in seconds. Proactive notifications Trigger alerts based on signal changes Spikes in Copilot usage Drops in adoption for paid tenants New high-propensity accounts entering threshold This shifts sellers from reactive to proactive engagement. Portfolio dashboards (secondary) Maintain dashboards for leadership and planning, but not as the primary interaction model for sellers. Dashboards support strategy, agents drive execution. Extending into E7 and Agent 365 scenarios Once the agent is connected to ASPX, partners can extend the same model across broader solution plays E7 opportunities Use signals such as usage depth, licensing posture, and workload adoption to identify customers progressing toward advanced security and compliance requirements. The agent can flag these accounts as ready for E7-led conversations. Agent 365 opportunities Combine Copilot maturity with agent usage signals to identify customers moving beyond productivity into process automation. These are high-value transformation plays where partners should proactively engage. This ensures sellers are not operating in silos but are guided toward the next logical workload based on real behavior, not assumptions. Where to Next If you lead a partner sales team, connect to ASPX Insights and see how these insights can empower your sales teams to achieve more. Check out our ready made ASPX Insights agent in Github.Design 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, forming the foundation of AI reliability engineering. 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 and supports effective AI incident management. 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. AI app 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 support post-launch AI operations 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, which requires monitoring AI agent behavior to remain understandable and consistent at scale. 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 Success
