Microsoft has caused an uproar among its partners by canceling one of their favorite perks: software for their own use (MSFT)


Satya Nadella Microsoft Inspire 2018

  • Over the course of the next year, Microsoft will stop allowing its partners to use its software for their own businesses as a perk — and instead, charge them, same as anybody else. 
  • These partners are the companies that sell, support and develop their own add-ons to Microsoft’s products and services.
  • Some partners are so upset with the change that they’ve signed an internet petition ahead of the company’s giant partner conference in Las Vegas next week.
  • Microsoft says it is balancing the resources it gives its partners to encourage them to focus on its cloud.
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Some 1,800 people so far have signed an internet petition in protest of changes Microsoft has made to its reseller partner programs.

The big change is that Microsoft is doing away with one of its most beloved and valuable perks: As of July 1, 2020, the tech titan will no longer allow its partners to use Microsoft software internally in their own business for free as part of their low-cost annual subscription to its partner program.

Subscription rates to that program currently range from $475 a year for small partners to $4,730 a year for its gold-level partners. And, until this announcement, all levels included access to any Microsoft software.

On top of that, Microsoft will also ending their partners’ access to technical support for on-premises software. 

Partners authorized to sell specific Microsoft software will still be granted limited licenses to use that software as part of their sales process, such as product demos, or to test their homegrown apps built on top of that software. But if they want to use the software internally, they’ll have to pay up, just like everybody else.

In announcing these changes it’s clear Microsoft is going to war with its partners,” the petition reads, in part. 

The changes had been slowly announced over the past couple of months. But the petition was launched in the run-up to Microsoft Inspire, its annual partner conference, being held next week in Las Vegas. The petition was posted July 7th and by July 8th, almost 1,800 people had signed it.

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‘Microsoft is going to war with its partners’

Allowing the channel partners who sell and support Microsoft software to use that software every day themselves has historically been seen as a common-sense policy, just as it makes sense that Microsoft employees would be allowed to use Microsoft software.

Last year a record-breaking 18,000 attendees came to Microsoft’s partner conference, representing just a fraction of Microsoft’s worldwide partners. This means that Microsoft could suddenly be asking tens of thousands of businesses to start paying it for software.

“For some partners this is going to cost them thousands of dollars a month extra,” the petition proclaims. It points out the example of a small partner with 15 employees that specializes in selling Microsoft Dynamics, Microsoft’s competitor to Salesforce. 

“To ask a company using 15 x Dynamics 365 Customer Engagement licenses to now pay $160 each for them doesn’t sit right. That’s $2400 a month,” the petition says. 

Microsoft’s perspective

Microsoft, however, says that it is merely rebalancing its investment to encourage its partners to move in the direction it needs them to go: away from software and into the cloud.

Microsoft wants its partners to focus on advanced cloud technologies, rather than software, and is doing its part by creating more specialty certifications, it said in a blog post in May that teased these changes. New specialties includes everything from SAP on Microsoft’s cloud Azure to security certifications. The company says those that qualify for its upper-level Silver or Gold level programs may also be eligible for new programs intended to help them with marketing. 

Several resellers told CRN’s Kyle Alspach that they are not worried about giving up the perk of Microsoft software because they have already moved away from on-premise software internally. Another said that push for more specialized technical certifications will help each of them compete in Microsoft’s enormous network of partners. Another said that nudging partners away from software is no surprise, given how Microsoft is pushing the cloud.

Microsoft did not immediately respond to a request for comment, but a spokesperson gave a statement to CRN. 

“Like any business, we need to prioritize where we are going to commit funds,” the spokesperson told CRN, adding “While we understand this may be an adjustment for our partners, we believe the evolution of our partner business investments will allow partners to better capitalize on the cloud opportunity.”

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