Welcome to our news!
July's Partner Center updates split into two camps: deadlines to close out, and margin to open up. Two deprecations, MDTI and DLP in Defender for Cloud Apps, force cleanup work on existing customer environments. Growth margins, Copilot in 30, and an SMB eligibility change open new room to grow, all landing within weeks of an Azure reservation policy shift partners need to get ahead of.
TL;DR:
- DLP file policies in Defender for Cloud Apps retire January 6, 2027, and policies don't migrate automatically to Purview, plan the rebuild now.
- MDTI subscriptions end August 1, with a credit memo process partners must pass through to customers.
- CSP growth margin sandbox access is live now, ahead of the October 1 launch, test the required API and UX changes before then.
- Copilot in 30 becomes transactable in CSP starting August 1, a new 30 day trial motion built for SMB customers.
- Azure reservation exchanges for savings plan eligible services end February 1, 2027, customers are already receiving notifications, get ahead of the conversation.
- The SMB track eligibility bar just dropped for three Azure Solutions Partner designations, the ACR threshold is gone.
Here are the announcements that matter most for CSP partners this month.
Ready to start?
Microsoft Updates - [07/2026]
Summary Table
| Update | Date | Who's Affected | Action Required |
|---|---|---|---|
| DLP in Defender for Cloud Apps deprecation | Effective January 6, 2027 | CSP partners, SI/advisory partners, MAICPP members | Yes |
| CSP growth margins available in sandbox | Sandbox now; margin launches October 1, 2026 | CSP distributors and direct bill partners | Yes |
| Introducing Copilot in 30 | Transactable in CSP starting August 1, 2026 | CSP partners supporting SMB customers (under 300 employees) | No, optional new motion |
| MDTI reaches end of life | Effective August 1, 2026 | CSP direct bill partners, indirect resellers, distributors with active MDTI subscriptions | Yes |
| Azure reservation exchange policy update | Effective February 1, 2027 | Partners with customers holding Azure reservations under savings plans | Yes |
| Expanded SMB track eligibility | Effective July 31, 2026 | Partners pursuing Solutions Partner for Data & AI, Digital & App Innovation, or Infrastructure (Azure) | No, review eligibility |
DLP in Defender for Cloud Apps deprecation
What's happening:
Data Loss Prevention (DLP) file policies in Microsoft Defender for Cloud Apps are being deprecated, covering SharePoint, OneDrive, and connected third-party SaaS apps like Box, Dropbox, Google Workspace, and Salesforce. Microsoft Purview becomes the unified home for data security and DLP going forward.
Date of Announcement July 6, 2026
Effective Date January 6, 2027
Who is affected CSP partners, SI/advisory partners, and Microsoft AI Cloud Partner Program members with customers using DLP file policies in Defender for Cloud Apps
Action Required Yes. Identify customers with DLP file policy usage now. Policies don't migrate automatically to Purview, so plan the rebuild before the January 2027 cutoff.
💡 Quick Note No auto migration means this is a scoping project, not a checkbox. Pull the list of customers with active DLP file policies this quarter, not next, and use the conversation to open a Purview upsell: CSP partners can transact the discounted Microsoft Purview E5 Information Protection and Governance SKU through Modern Commerce. Details on the transition are in the Defender for Cloud Apps Partner FAQ.
CSP growth margins available in sandbox
What's happening
Ahead of the October 1, 2026 launch, Microsoft opened sandbox access, documentation, and resources for the new CSP growth margin. Growth margin pays a higher margin to partners driving new-to-offer sales, seat expansion, and adoption across select AI workloads.
Date of Announcement July 7, 2026
Effective Date Sandbox available now; growth margin launches October 1, 2026
Who is affected CSP distributors and direct bill partners
Action Required Yes. Test the required API and UX changes in the sandbox before the October launch. Offers are subject to eligibility, terms, and conditions.
💡 Quick Note Three months between sandbox access and go live sounds comfortable until integration testing eats into it. Treat this like any API deadline: build the test cycle into this quarter, not next. The growth margin documentation covers qualifying scenarios in detail.
Introducing Copilot in 30
What's happening:
Copilot in 30 is a new CSP partner led trial: a 25 user, 30 day Microsoft 365 Copilot Business trial built for SMB customers under 300 employees, paired with targeting guidance, campaign materials, and adoption content.
Date of Announcement July 14, 2026
Effective Date Transactable in CSP starting August 1, 2026
Who is affected CSP authorized partners (global admin, billing admin roles) supporting SMB customers
Action Required No immediate transaction required, but partners should download the launch kit and build a targeting list ahead of the August 1 start.
💡 Quick Note A repeatable 30 day trial framework is worth more than another one off pilot: it gives every SMB rep the same playbook instead of improvising each time. Start building the targeting list against ASPX data now, so August 1 isn't a cold start. The Copilot in 30 launch kit has the full campaign package.
MDTI reaches end of life August 1, 2026
What's happening:
Microsoft Defender Threat Intelligence (MDTI) is retiring as a standalone SKU. All MDTI capabilities remain available at no extra cost through the Microsoft Defender portal for any customer with Microsoft Defender or Microsoft Sentinel, so customers don't need to take migration action themselves.
Date of Announcement July 23, 2026
Effective Date August 1, 2026
Who is affected CSP direct bill partners, indirect resellers, and distributors with customers holding active MDTI subscriptions
Action Required Yes. Microsoft issues a credit memo to the partner account for any remaining subscription term past August 1. Partners are responsible for passing that credit through to end customers.
💡 Quick Note This is a billing task with a customer facing side, not just a backend credit. Loop in billing now so the credit memo doesn't sit unprocessed while a customer wonders why their invoice changed. Volume Licensing customers are handled directly by Microsoft, so this only applies to your CSP book. Background on the transition is in MDTI converging into Microsoft Sentinel and Defender XDR.
Azure reservation exchange policy update
What's happening Starting February 1, 2027, Azure reservation exchanges won't be available for services covered by savings plans. Impacted customers began receiving action recommended notifications on July 30, 2026.
Date of Announcement July 30, 2026
Effective Date February 1, 2027
Who is affected Partners with customers holding Azure reservations for compute and database services covered by savings plans
Action Required Yes. Review customer reservation portfolios now and guide each customer toward the right mix of savings plans and reservations before the window closes.
💡 Quick Note Customers are getting Microsoft's notification cold. A partner who reaches out first with a recommendation looks like an advisor, not someone catching up. This is also a natural opening for a broader cost optimization conversation, not just a reservation swap. The policy details are in Azure reservation exchange policy changes.
Expanded SMB track eligibility
What's happening Microsoft removed the Azure consumed revenue (ACR) threshold for SMB track eligibility across three Solutions Partner solution paths: Data & AI (Azure), Digital & App Innovation (Azure), and Infrastructure (Azure). Partners with at least 80% of their customer base in small, medium, and corporate-corporate segments can now qualify for the SMB track.
Date of Announcement July 31, 2026
Effective Date July 31, 2026 (already in effect)
Who is affected Partners pursuing Solutions Partner for Data & AI (Azure), Digital & App Innovation (Azure), or Infrastructure (Azure) designations
Action Required No immediate transaction required, but SMB focused partners should review the updated qualification criteria and assess their designation path.
💡 Quick Note If the ACR threshold was the reason an SMB heavy practice never bothered pursuing a Solutions Partner designation, that reason is gone. Pair this with the growth margin news above: both reward partners for winning and expanding smaller accounts, not just large ones. Full criteria are in the Solutions Partner for Cloud & AI Platforms qualification requirements.
The Bottom Line
July's announcements split cleanly along a line: two deprecations forcing cleanup, and three openings for new margin. MDTI and DLP retirements aren't just security news, they're billing and migration workload that lands on partners, not just customers.
Growth margins, Copilot in 30, and the SMB eligibility change point the same direction: Microsoft is rewarding partners who go after new-to-offer and SMB expansion, not just renewal volume.
Partners who treat the deprecations as cleanup projects and the margin changes as growth projects, rather than filing both under "general Microsoft news," get more out of both.
Source
All announcements sourced from the official Microsoft Partner Center announcements: Microsoft Partner Center Announcements July 2026
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