Microsoft Partners Protest Decision to End Internal Use Rights

Microsoft partners are fuming over the company’s plan to stop offering Internal Use Rights (IUR) that have effectively let them use the company’s software with Action Packs at no charge to run their businesses. Thousands of partners from around the world have signed an online petition protesting the company’s decision to “retire” the highly coveted benefit offered with its Microsoft Action Packs.

Partners will have to pay to use Microsoft products to run their businesses, but the company will continue to offer free licenses for demonstrations and software development. The new requirement that partners pay for software licenses goes into effect July 1, 2020.

Starting on Oct. 1, however, Microsoft said it will only offer product licenses that are specific to the partners’ competencies; moreover, starting next month, the company also is doing away with product support offered to partners with silver or gold competencies for incidents with Microsoft Action Packs.

Microsoft quietly acknowledged the benefit cutbacks late last week in advance of the long July 4 weekend and on the eve of its annual Inspire partner conference, which kicks off this weekend. The announcement, posted on the Microsoft partner portal, gave notice of the change.

“Product license use rights will be updated to be used for business development scenarios such as demonstration purposes, solution/services development purposes, and internal training,” according to the announcement.

Asked why Microsoft is taking away such a popular benefit, a spokesperson responded with a statement that the company is shifting its investments to partners.

“Like any business, we need to prioritize where we are going to commit funds,” according to the statement. “In this case, we made the decision to invest more heavily in programs and resources that support business growth, helping partners connect with more customers, other partners and Microsoft sales teams. One of the tradeoffs is changing our approach to providing product licenses for internal use.”

The spokesperson noted that a May 29 blog by Toby Richards, GM of go-to-market programs at Microsoft, pointed to how the company planned to shift its partner investments.

Microsoft’s Toby Richards

“Partners that provide value-added services will see strong margins when they focus on specialized business applications deployment and projects that require planning, implementation, integration, security and compliance,” Richards noted.

Ben Johnson, CEO and founder of Liberty Technology, a Microsoft silver partner, said in an interview that communications have come out piecemeal and said the IUR announcement before the holiday weekend was vague.

“To just kind of leak it without a whole lot of information is creating a lot of mistrust,” said Johnson, who recently renewed his silver designation, which cost approximately $2,000. “Will that cost go down once these changes go into effect to offset it? They haven’t mentioned that. These benefits are part of the value we pay to Microsoft.”

More than 3,000 signatures appeared on the petition as of Tuesday, primarily disapproving of the move. Microsoft’s decision to rescind the benefits is a sign that the company is looking to squeeze out partners, especially smaller ones, according to comments on the petition and those who spoke to Channel Futures about the move.

Many expressed anger or questioned Microsoft’s commitment to partners. “There is essentially no value in maintaining silver/gold status as we pay for that,” according to a comment on the petition by Pamela Santangelo, CEO of Interpreting Technology. “I always saw the licenses as …