Microsoft to drop commercial marketplace fees to 3% (from 20%) in latest dig at platform rivals

Nick Parker, Microsoft corporate vice president of Global Partner Solutions, speaks at an earlier conference. (Microsoft Photo)

Microsoft is escalating its campaign against the traditional business model of online marketplaces, reducing the fees it charges independent software vendors in its commercial marketplace to 3% from the 20% industry standard.

“We’re really challenging that business model of these marketplaces as profit vehicles unto themselves,” said Nick Parker, Microsoft corporate vice president of Global Partner Solutions, in an interview this week.

It’s one of a series of announcements emerging from Microsoft’s virtual Inspire partner conference, which starts Wednesday with a keynote address by CEO Satya Nadella.

The lower fees will impact the Azure Marketplace and AppSource, where businesses can purchase commercial software and business apps. The change will allow software vendors who sell through the Microsoft marketplaces to boost their own profit margins, and provide better economics to companies that resell their software, Parker said.

Although the move doesn’t involve consumer apps, it echoes the themes from Microsoft’s clash with Apple over its attempts to bring its cloud gaming and streaming services to iOS devices.

Microsoft published 10 principles for app stores following a report last year from the U.S. House Judiciary antitrust subcommittee, which focused in part on Appleā€™s monopoly power over the distribution of apps on iOS devices.

Among other Inspire announcements, Microsoft says it has signed up 21 new industry partners for its Viva employee experience platform.

It’s also committing to boosting its investments in marketing and development support for partners building apps for Viva and its Microsoft Teams communications and collaboration platform.

In addition, Microsoft says it’s developing a new cloud offering focused on sustainability, to help companies track and meet carbon reduction and other environmental goals.

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Cloud tech Microsoft Azure Nick parker Satya nadella