Microsoft Marketplace 101: Insights from high performing software development company sellers
Microsoft Marketplace is probably the one topic that can give 'AI' a run for its money in terms of the number of mentions on LinkedIn, on cloud hyperscaler blogs, and in Partner Ecosystem presentations. But ask the average SaaS seller what a marketplace is, and you’ll probably get a different answer every time. That’s because marketplaces have become more than just a listing catalog, it’s now a pervasive commerce platform across the entire B2B Software purchase process. Jay McBain @ Omdia described Cloud Marketplaces as the "epicenter of partnerships, co-selling and co-innovation” and we see that play out at Microsoft. The combination of Microsoft's co-sell model and Microsoft Marketplace has created the platform for modern procurement and modern partnerships. Today, Microsoft Marketplace: Impacts all personas and incentives – from customers commercial incentives, to software company program sale incentives, channel partner benefits, and hyperscaler seller compensation models Enhances B2B purchase processes for customers – Streamlining supplier onboarding, to internal FinOps, to governance and guardrails on purchasing Brings agility to the sales process for software companies and channel partners – from pricing and quoting, budget allocation, billing & payments, right through to co-selling and go-to-market. With this level of impact, it’s not surprising that Microsoft Marketplace represents a significant growth opportunity for software companies. Customers are increasingly transacting through Marketplace as they align Azure commitments with third-party software purchases and adopt a more “marketplace-first” procurement approach. Research shows 69% of partners report larger deals and 75% close deals faster (Omdia), reinforcing the role of Marketplace as a strategic channel for enterprise software procurement. So, if you are a seller at a Microsoft SaaS software company and you want to take advantage of this opportunity, here are my five top learnings for high performance software sellers! This article assumes you are running your SaaS software platform on Microsoft Azure and you are already transactable in Marketplace. If you aren't, there are plenty of great resources for software companies to help get you there, and I have summarized them here: New Software Company Partner Guide. LEARNING 1 - Understand the customer benefits of Microsoft Marketplace and weave it into your customer proposal: This is about understanding the bigger picture of Marketplace for Microsoft customers, as the benefits go way beyond an individual transaction. The average enterprise is managing over 600 applications (Source - Zylo) and >60% of these applications being purchased outside of IT. Marketplace is a great way for customers to scale and bring efficiency across their B2B Software estate, giving them: Rapid access (find, try, buy) to software and AI innovation they need to run their business, Governance and guardrails for each purchase – so you are never compromising control and compliance. Streamlined procurement – onboarding suppliers in minutes using their Microsoft Agreement, invoicing and payment terms, Improved cloud economics – aligning the cloud consumption with your software company spend can unlock additional P&L impacting benefits, If you need to get up to speed on these aspects, check out: Microsoft Marketplace 101 - Top Customer Questions. LEARNING 2 - Understand how Microsoft partners can help you scale and close customer opportunities: Microsoft has always been a partner led organization. Today we have 500,000 partners globally ranging from a small start-up in a garage, to the largest Global Systems Integrator. These partners play different roles in our customers helping them transform and compete in the AI era through Microsoft Cloud & AI technologies. The great news for you is that we have empowered Microsoft channel partners and sales partners to sell Marketplace solutions. So, think about how you can use channel partners to (i). expand your reach, (ii). drive new opportunities or (iii). accelerate deal closure. We have a range of different models to support your channel led motions in our customers, including: Multi-party private offers (MPO) - Partner led sales agents for individual transactions. Resale enabled offers (REO) - Nominated and enabled partner representative by geo. Cloud solution provider (CSP) resellers - to scale into SMB/Corporate Accounts via a managed service provider For each opportunity, understand who the incumbent Microsoft partner is, and how you can use these mechanisms to accelerate your deal. Or better still, if you are looking to explore a more proactive partnership, check out the 1000s of Partners that are building Marketplace practices to support customers and software companies. Examples include Bytes, Softcat, CDW, Trustmarque, Crayon, Computacenter etc. LEARNING 3 - Accelerate your deal closure by including Microsoft programs and incentives into your customer proposal: Here are the most commonly used accelerators used by software company sellers to close deals: If you are marketplace transactable: Marketplace Rewards - Azure Sponsorship Credits - A performance related benefit that provides up to $400k in Azure Sponsorship Credits. These credits can be used as a deal sweetener with your Marketplace transaction and passed on to the customer for consumption. Up to 40% of transactions involve these credits today. If you are IP co-sell ready: Azure Benefit Eligible - This enables customers to decrement their Microsoft Azure Consumption Commitments (MACC) with eligible Marketplace purchases. By aligning their cloud consumption with their software company spend, it can unlock additional P&L impacting benefits. More than 85% of MACC customers buy via Marketplace. Microsoft IP co-sell incentive - This enables Microsoft sellers to get paid on the license value sold via Microsoft Marketplace. It also allows eligible Marketplace transactions to contribute to retiring Microsoft seller quota, helping accelerate deal alignment between partners and Microsoft field teams. If you have a Certified Software Designation (CSD): Marketplace Rewards - Azure Sponsorship Credits - If you come CSD Certified, Microsoft extends this benefit to $1M. These credits can be used as a deal sweetener with your Marketplace transaction and passed on to the customer for consumption. Customer Migrate & Modernize Incentive - This partner incentive is used to drive migrations to Microsoft Azure. Cash incentives vary based project size, but Microsoft will pay up to $200k per opportunity for NEW customer migrations to Microsoft Azure. High-performing software companies and sellers will combine these incentives into their proposals to help drive customer acquisition success. LEARNING 4 - Know your Microsoft customer Three things I urge every software company Seller to do as part of their Marketplace and co-sell conversations: Know your customer 1 - Understand the customer's Marketplace Propensity Score to help prioritize your opportunities Marketplace Propensity Scoring (combined with your co-Sell conversations) has proven a powerful tool for prioritizing pipeline and accelerating sales cycles. Offered as a Marketplace Rewards benefit, propensity scoring provides you with a score that ranks your pipeline prospects by their likelihood (0 to 100) to transact through Marketplace. The score is based on a number of factors including their commercials, existing spend and transaction volumes, relationship metrics etc. Access the benefit at: Microsoft Marketplace Rewards Know your customer 2 - Enable more tailored offers for customers by updating your MEDDIC, MEDDPICC or BANT qualification questions with these Marketplace qualifiers: Are they a Microsoft customer? This means they have agreed Microsoft terms and conditions to enable Marketplace transactions. Are they a Managed Microsoft Customer? This opens up the possibility of selling with Microsoft. What Microsoft segment/industry are they in? This opens up sales play alignment, industry go-to-market etc. How do they buy Microsoft Azure today? This helps navigate potential commercials, incentives and programs, purchase routes and the role of channel partners. Does the customer have a Microsoft Azure Consumption Commitment (MACC)? This could unlock the MACC benefit of Azure Benefit Eligible which allows customers to decrement marketplace purchases. What is the status of their Microsoft Azure Consumption Commitment (MACC)? Are they ahead or behind of their consumption commitment? Is it coming up for renewal? This is all about getting access to planned Azure budgets at the right time. Is there an incumbent Microsoft partner in the customer and what role do they play? It is forecasted that 60% of ALL marketplace sales will involve a channel partner, so get them involved early in the process. Know Your Customer 3 - Use the Partner Center referral process to engage incentivized Microsoft sellers and gain customer intelligence: Submitting your referrals via Partner Center will enable you to engage incentivized Microsoft sellers directly. For most Microsoft sellers, Microsoft Marketplace and co-sell deals are critical for how they will make their Azure quota. Help could include: Navigate and increase your visibility with the customer's buyers Gain insights on the customer's Azure commitments, Understand the partner landscape in the customer Potentially find ways to combine sales motions to drive bigger/better outcomes for all. Build this discipline with every opportunity is a key characteristic of a high-performance software company seller. LEARNING 5 - Celebrate and amplify Microsoft co-sell/Marketplace success The best Microsoft Marketplace and co-sell partners treat Microsoft as a customer. They market to the Microsoft sales and go-to-market teams the success they are driving, which in turn is driving further engagement and activity. Work with your aligned Microsoft Partner Development Manager to create a regular drumbeat of communication or use your Marketplace Rewards GTM benefits to amplify your success with the Microsoft sales teams. Need more help? Speak to your Partner Development Manager or aligned engagement manager Check out App Advisor for a guided experience on the journey for software development companies. Let me know your feedback or if you have any additional recommendations. Thanks Lee Corbett - EMEA ISV Recruit & Grow LeadWhen cloud apps become a weak link: How FortiAppSec Cloud in Microsoft Marketplace bridges the gap
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Author Juhi Saha is CEO at Partner1, a two-time Inc. Power Partner Award winner and an official Microsoft Partner Led Network. Partner1 helps B2B software and services companies maximize the value of their partner ecosystems and transform partnerships into scalable profit engines. Specializing in channel development and strategic alliances, Partner1 empowers organizations to unlock their partnership potential through expert guidance, partnership program design, and actionable growth strategies. By focusing on partner-driven growth, Partner1 helps businesses, from startups to scale-ups, maximize revenue, accelerate market expansion, and build a lasting competitive advantage. ________________________________________________________________________________________________________________________________________________________________ Key takeaways from recent NYC founder and investor events “It’s no longer the era of go fast. It’s the era of go faster.” That sentiment, shared by an investor during one of our recent New York City gatherings, captures a broader shift underway in how startups are expected to scale. Speed is no longer just a function of product development or hiring. It is increasingly a function of how effectively companies leverage platforms, ecosystems, and commercial infrastructure that already exist. Over the past several weeks, Partner1 hosted two curated events bringing together founders, investors, and ecosystem leaders to explore how startups are accessing enterprise customers and accelerating growth through partnerships. The conversations centered on a practical question that continues to surface across early-stage and growth-stage companies: how do startups break into enterprise and scale in a market defined by AI, platforms, and increasingly complex buying environments? What emerged from these discussions is a clear pattern: the traditional model of building a product, hiring a sales team, and scaling through direct enterprise relationships is being supplemented, and in many cases replaced, by ecosystem-led growth. Partnerships are no longer a downstream channel decision. They are becoming a primary system through which companies access customers, accelerate revenue, and compete. Across both sessions, with perspectives from leaders at Microsoft, NVIDIA, Plug and Play Tech Center, and investors including Trajectory Ventures, several consistent themes emerged around how this shift is playing out in practice. Marketplace is becoming the default commercial infrastructure Evaluate your Marketplace readiness- understand how Microsoft Marketplace supports discovery, procurement, and scalable growth, and were your solution fits today. One of the most concrete shifts discussed was the role of Marketplace as the commercial backbone for modern software transactions. Marketplace is no longer positioned as an optional distribution channel. It is increasingly how Microsoft goes to market with software companies of all sizes, and how customers expect to discover, evaluate, and procure solutions. This shift is being driven by practical realities. Enterprise procurement has historically been one of the most significant sources of friction in software sales. Vendor onboarding, legal negotiations, billing complexity, and fragmented purchasing processes extend deal cycles and introduce risk. Marketplace addresses these issues directly by standardizing terms, consolidating billing, and pre-vetting vendors through the publisher agreement. These are not cosmetic improvements. They materially change how quickly transactions can occur. During the discussions, the Marketplace opportunity was reinforced with both data and real examples. Marketplace is enabling larger deals, faster sales cycles, and measurable revenue growth for companies that treat it as a core go-to-market motion and speakers shared examples from companies like Neo4j, Pangaea Data and ShookIoT. The examples shared ranged from small, niche startups closing their largest deals through Marketplace to companies significantly expanding their customer base by leveraging Microsoft’s commercial infrastructure. What stands out is that these outcomes are not isolated. They are becoming repeatable. As customer awareness of Marketplace increases, it is increasingly seen as the fastest path to the right solution, regardless of who built it. Several startups shared how their deals languished in procurement and were excited to hear from other companies in attendance around how they successfully used Marketplace to speed up procurement. Rethinking scale: why “Microsoft is too big” is the wrong assumption A recurring concern from founders was whether they are too early or too small to meaningfully engage with Microsoft. This perception is common, but it does not reflect how the ecosystem is evolving. The perspective shared by Microsoft leaders was clear. AI-native startups are not peripheral to the ecosystem. They are central to it. Supporting startups is not about proximity to large partners. It is about helping early-stage companies build faster, reduce risk, and reach enterprise customers sooner. This dynamic was described as a balance. Startups bring speed, specialization, and differentiated AI use cases. Microsoft brings global reach, enterprise relationships, and a mature commercial engine. When aligned, that combination becomes a multiplier. Multiple conversations touched on how Marketplace is where this alignment materializes. It serves as the convergence point between innovation and demand. Whether a company is early-stage or scaling, it provides a consistent path to reach customers and transact at enterprise scale. The implication is direct. Companies should not wait to be “big enough.” They should start early with Microsoft Marketplace and design for this motion from the beginning. The results will be reduced friction and enable them to reach enterprise customers faster. Co-sell is evolving from access to alignment Many founders approach partnerships with a familiar question: how do we get Microsoft sellers to pay attention to us? That framing is increasingly misaligned with how the system actually works. The more scalable model described in the sessions is based on alignment rather than attention. Becoming co-sell eligible is important, particularly as solutions begin to align with Azure consumption and commercial priorities. However, co-sell eligibility is a starting point. It allows a solution to be recognized within Microsoft’s system and to count toward seller objectives. The more important shift is where growth actually comes from. The fastest growing motion is not seller-led. It is partner-to-partner. System integrators and channel partners already have established customer relationships. They are the ones driving adoption at scale. Microsoft’s investment in channel-led growth reflects this, with partner-led motions representing one of the highest growth vectors. The takeaway for founders is practical: instead of asking how to get seller attention, the better question is how to become easy for partners to sell. Alignment to platform, customer need, and partner incentives drives outcomes more reliably than individual relationships. Partnerships are not a channel. They are a go-to-market system One of the most consistent misconceptions observed across attendees was treating partnerships as a secondary channel, but insights from the panelists as well as conversations during networking sessions highlighted how partnerships function as an integrated system that shapes how companies build, sell, and scale. Marketplace, co-sell eligibility, and partner-to-partner relationships are interconnected. Product decisions influence how easily a solution can be transacted. Marketplace presence influences discovery and procurement. Partner relationships determine how widely a solution can be distributed. This system view is especially important in AI. As solutions become more complex, both buyers and sellers are optimizing for simplicity and speed. Centralized platforms and ecosystems provide a way to meet those requirements. Companies that treat partnerships as a system create compounding advantages. Those that treat them as an add-on often struggle to gain traction, even with strong products. Expanding beyond enterprise: a multi-segment opportunity While many startups initially focus on landing large enterprise customers, the opportunity within the Microsoft ecosystem is broader. Microsoft’s reach extends across enterprise, mid-market, and SMB segments. With the rise of AI and agent-based solutions, there is increasing focus on embedding applications into environments where customers already operate, such as Microsoft 365, and leveraging channel partners to scale distribution. This creates a unified go-to-market path that spans multiple segments. Startups can reach enterprise customers while also expanding into mid-market and SMB through the same ecosystem infrastructure. Channel partners play a critical role in this expansion. They provide access, distribution, and scale that would be difficult to replicate through direct sales alone. For startups, this represents a meaningful opportunity to grow faster and more efficiently across segments. Investor perspective: partnerships as a signal of maturity From an investor standpoint, partnerships are increasingly a signal of go-to-market maturity. The ability to leverage platforms, align with ecosystem dynamics, and accelerate revenue through structured partnerships is becoming a differentiator. Going back to the investor’s comment that “It’s no longer the era of go fast. It’s the era of go faster. I am going to ask all my portfolio companies about their marketplace strategy.” - this reflects a broader shift in evaluation criteria. Marketplace and ecosystem alignment are not viewed as optional enhancements. They are becoming central to how companies compress time to revenue and scale efficiently. When evaluating companies with similar technical capabilities, investors are looking closely at how founders approach distribution. Companies with a clear strategy for leveraging ecosystems and Marketplace are often better positioned to scale with less friction and more capital efficiency. A practical starting point The guidance shared across both events was consistent and actionable. Start early. Do not wait for a specific stage to engage with the ecosystem. Build on the platform with clear, differentiated use cases that solve real customer problems. Treat Marketplace as a core go-to-market motion. This includes investing in strong listings, clear pricing, and a working knowledge of Marketplace capabilities such as private offers and partner-led transactions. Design for partner-to-partner distribution. Ensure that your solution is easy for others to position, sell, and deploy within existing customer environments. At a fundamental level, the objective is to reduce friction. Companies that are easy to buy, easy to deploy, and easy for partners to sell are the ones that scale most effectively. Enterprise growth is no longer driven solely by direct sales execution. It is increasingly shaped by how well a company integrates into an ecosystem that already has distribution, demand, and commercial infrastructure. For startups building in AI and enterprise software, the question is no longer whether to engage with platforms like Microsoft. It is how early and how intentionally they design for it. The companies that do this well are not simply participating in the ecosystem. They are using it to accelerate outcomes that would be difficult to achieve on their own. Live in NYC on April 21st: Hear from Redis, Datadog, Eden and Microsoft on how strategic Marketplace partnerships are built and scaled in practice Strategic partnerships across hyperscalers, database providers, observability platforms, and application ecosystems are no longer abstract concepts, but important GTM relationships. As customers' infrastructure becomes more complex, they require solutions that are interoperable, scalable, and easy to implement. With the rise of AI, marketplaces have become critical enablers of technology adoption. With each product offering a wide range of integrations, it's the first-party relationships between providers that set these solutions apart, delivering best-in-class support for customers' infrastructure. Partnerships, like those between Microsoft, Datadog, Eden, and Redis, accelerate and derisk enterprise cloud transformations, with the Microsoft Marketplace playing a central role in how services are delivered and scaled. Eden's migration platform, Exodus, enables zero-downtime database migrations, while Datadog is deeply integrated to ensure that these autonomous migrations are fully observed. Azure Managed Redis is a first-party Azure service that is becoming foundational for customers optimizing their data infrastructure for modern and agentic AI workloads. Eden and Datadog's autonomous migration service for Azure Managed Redis is now available on Microsoft Marketplace, making it easy for enterprises to get the most out of new Redis products. As enterprises make this shift, a broader pattern is emerging in which marketplaces are not just procurement vehicles but also enablers of ecosystem execution, particularly in the context of AI. Many AI initiatives fall short not because of model capability, but because underlying infrastructure and data environments are not properly optimized. Migrations, when executed well, become an opportunity to modernize architecture, improve performance, and prepare for scalable AI and agent deployments. Through coordinated partnerships across Microsoft, Eden, Datadog, and Redis, companies are aligning product, sales, and delivery into a unified operating model that accelerates time to value and reduces risk for enterprise customers. This is all before discussing AI as an autonomous agent for deploying new infrastructure via marketplaces. If you want to understand how these partnership models are being built in practice, and how to use marketplaces and ecosystem alignment to unlock growth and AI readiness in your own organization, this event will provide a direct view into how leading companies are executing today. Sign up here and follow for more events with partners for partners by Partner1 and Microsoft. Resources Marketplace readiness assessment Learn more about Microsoft Marketplace: Microsoft Marketplace overview - Marketplace customer documentation | Microsoft Learn Explore Microsoft Marketplace Microsoft Marketplace | cloud solutions, AI apps, and agents Join Microsoft Marketplace community: Microsoft Marketplace community | Microsoft Community HubMicrosoft Marketplace at Channel Partners Conference & Expo 2026
If you’re a channel partner, you’ve probably felt the shift: customers are relying on trusted advisors like you now more than ever as they transition to an AI-first world. As part of this change, channel‑led sales through Microsoft Marketplace have grown rapidly over the past year, fueled by new offer constructs and simplified procurement paths that make it easier for partners to source, bundle, and deliver the cloud and AI solutions customers need, while accelerating deals and expanding their services footprint. To continue to drive momentum with channel-led sales, the Marketplace team is excited to sponsor the Channel Partners Conference & Expo, April 13–16 at the Venetian Resort in Las Vegas, and connect with the advisors, resellers, and services partners who are delivering value for customers every day. How to engage with Microsoft Marketplace at the event We want to meet you! Throughout the week, Marketplace experts will lead sessions, host conversations at our booth, and support private meetings to help you activate and accelerate your Marketplace strategy. ✔ Join our sessions Keynote interview: Scaling channel impact in an AI-first world with Microsoft Marketplace Tech sponsor session: Unlock the channel opportunity through Microsoft Marketplace Theater session: 5 tips for channel success through Microsoft Marketplace ✔ Visit us onsite Stop by our booth (#1536) to meet experts and learn how partners are using Marketplace to: Pair your solutions with vetted offerings Accelerate vendor relationships Scale faster with bigger deals ✔ Request a private meeting If your team will be in Las Vegas, we’d love to connect. Submit a meeting request here. Register with our sponsor discount code As a Platinum Sponsor, we’re pleased to offer complimentary Expo + Keynote passes and discounted Standard and Premium passes. Use code “Microsoft” when registering here. We hope to see you in Las Vegas!Unlock AI Agent communication, enhance customer engagement with MCP servers in Microsoft Marketplace
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Software companies today are navigating a rapidly evolving go-to-market landscape shaped by cloud adoption, AI innovation, and changing buyer behavior. Microsoft Marketplace has emerged as a central commercial engine designed to help software providers scale faster, reach new customers, and drive meaningful revenue growth through modern co-sell and partner-led motions. A Marketplace built for growth and innovation At its core, Microsoft Marketplace is more than a digital storefront. It is a unified, enterprise-grade platform that supports discovery, procurement, contracting, and deployment of software solutions across customer segments—from SMBs to global enterprises. By consolidating SaaS, virtual machines, containers, and emerging agent-based solutions into a single AI-first marketplace, Microsoft enables faster time to value for customers while simplifying how software companies transact and scale globally. The marketplace aligns closely with three critical priorities for software growth: Building and scaling innovative AI-driven solutions Accelerating revenue through co-sell with Microsoft sellers Expanding market reach through trusted partner ecosystems Together, these priorities position the marketplace as a foundational component of modern software go-to-market strategies. Turning co-sell into a revenue engine One of the most impactful advantages of the Microsoft Marketplace is its role as the commercial engine behind co-sell. Rather than serving as a last-mile transaction tool, the marketplace enables earlier engagement in the sales cycle—supporting joint planning, customer mapping, and pipeline execution. This approach helps to close deals faster, grow larger, and move through procurement more efficiently. Customers benefit from streamlined purchasing and the ability to apply eligible marketplace purchases toward their cloud consumption commitments, while software companies gain stronger alignment with Microsoft field teams and improved deal velocity. Meeting buyers where they are Buyer behavior has fundamentally shifted. Many purchasing decisions are now driven by line-of-business stakeholders who expect self-service discovery, trials, and rapid deployment—often before engaging with sales teams. The marketplace supports this reality through product-led growth motions, enabling customers to find, try, and adopt solutions quickly, while still maintaining enterprise governance and procurement controls. This balance between agility and control makes the marketplace especially compelling for organizations modernizing application portfolios or adopting AI-powered solutions at scale. Expanding reach with resale-enabled offers A significant recent advance is the introduction of resale-enabled offers, which unlock a powerful, globally scalable channel motion. With resale-enabled offers, software companies can authorize channel partners to sell their marketplace listings directly to customers using private offers—without requiring partners to create or manage their own listings. This model delivers several key benefits: Faster access to customers through trusted channel relationships Larger deal sizes driven by partner-led adoption and services Global scalability with consistent marketplace benefits, including cloud commitment eligibility Importantly, software companies retain visibility into partner-led transactions through marketplace insights, while partners gain the flexibility to manage pricing and customer engagement. The power of the ecosystem Data consistently shows that channel-led marketplace deals outperform direct-only motions, often resulting in two to three times higher deal value. This success is driven by the combined strengths of software innovation, Microsoft’s global sales reach, and the deep customer relationships held by channel partners. By embracing resale-enabled offers and marketplace-first strategies, software companies can tap into this ecosystem effect—accelerating growth while reducing friction across sales, procurement, and deployment. Key takeaways Microsoft Marketplace is a strategic growth platform, not just a transaction layer Co-sell through the marketplace enables earlier engagement, faster deals, and higher revenue Resale-enabled offers unlock global, partner-led scale with minimal operational complexity Customers benefit from faster time to value, governance, and cloud commitment optimization Software companies gain access to a powerful ecosystem that amplifies reach and impact As software markets continue to evolve, the Microsoft Marketplace provides a clear path to scalable, sustainable growth, connecting innovation, partners, and customers through a single, integrated commercial engine. Find out more about channel-led opportunities on the Microsoft Marketplace Marketplace resources for channel-led opportunitiesHow AI closes requirements gaps, and how Modern Requirements and Microsoft Marketplace can help
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