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  • 1.  Microsoft to partners "The free ride are over! "

    Posted 07-09-2019 06:53
    Partners Pummeled
    In recent months, partners have seen a continuous barrage of changes that are catching most off-guard. Many have described some of these changes as types of "Partner Taxes". For example:

    • Mandatory, but unnecessary, requirements to purchase Advanced Support for Direct CSP Partners (Minimum $15K/yr)
    • 10%-20% of ISV's Revenue to now be shared with Microsoft
    • The elimination of Internal Use Rights licenses (IUR), as I was the first to tweet about last week.

    Add to these, recent changes to the Competency Requirements, tripling the number of certified individuals. It all has a lot of partners wondering… WTF! Let's break it down.

    Microsoft to partners - "The free rides are over"

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    Wayne Schulz - Schulz Consulting - 860-516-8990
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  • 2.  RE: Microsoft to partners "The free ride are over! "

    Posted 07-09-2019 08:28
    Yeah, this has been deja vu for me since I also run our MSP division.  The cynic in me assumes that this was an attention grab to get the bad news out of the way for this months' Partner conference, and that Microsoft will 'give' something back at the Partner conference so that everybody can see how well they listen and respond to feedback.  Sigh...

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    Steve Iwanowski, NextStep Technology Advisors, aka DSD Lancaster PA ¯\_(ツ)_/¯
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  • 3.  RE: Microsoft to partners "The free ride are over! "

    Posted 07-09-2019 16:29
    Edited by Peter Wolf 07-09-2019 16:29

    I love when vendors "explain" by pointing to some high-level blog post and say "see, we already explained our position" when the blog article actually doesn't explain jack shit.

    The $15k for the Advanced Support was a pain but a minor pain for us. We paid it happily to get the extra level of support for our customers and we kept our margin level intact (mid-30s).

    The reduction of IURs is unfathomable at first glance. We are slowly and steadily incorporating in the Microsoft technology to serve our customers and our internal needs. Would I be doing that if I didn't have free licenses? Maybe. Maybe not. But the free licenses have made the decision a no-brainer. And as we use it, it makes us evangelists for Microsoft.

    Every other partner is similar to us. Microsoft has been getting a ton of free, positive, enthusiastic press through those free internal use licenses. I wonder what the cost in marketing $$ will be as they shut them down.

    The angle they are taking is old news: It's too costly to deal with all the small fry resellers. They have slowly and steadily been implementing tactics to "solve this problem" and push partners to go through distribution as what's called an "indirect partner" versus go through Microsoft directly as a "direct" or "Tier-1" partner. 

    This move will accelerate that somewhat as the distributors will beef up to provide first level of support around technical and licensing issues.

    As for me and Azamba, I made the decision at the start of the year that I am going to evolve my model to be independent from software license revenue so I'm grateful to be a step ahead of most partners. But adding up what I'm going to pay in internal usage and my head starts to spin. That takes money away from conferences, training, marketing, and other critical investments. It's going to be an adjustment.



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    Peter Wolf
    Azamba Consulting Group
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  • 4.  RE: Microsoft to partners "The free ride are over! "

    Posted 07-10-2019 08:46
    Peter's comments, while specific to Microsoft, can likely be applied to most publishers of software.

    I agree 100%.
    Consultants = make money consulting
    Publishers = make money licensing

    And if that is not presently your model you must change it.

    This is going to cause pain for organizations with significant processes and costly salespeople in place who don't want to make that shift.

    I guess they can always sign the petition and hold their breath waiting for the 1990s to come back.



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    Wayne Schulz - Schulz Consulting - 860-516-8990
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  • 5.  RE: Microsoft to partners "The free ride are over! "

    Posted 07-10-2019 10:22
    Happy birthday Wayne!

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    Peter Wolf
    Azamba Consulting Group
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  • 6.  RE: Microsoft to partners "The free ride are over! "

    Posted 07-12-2019 11:59
    Microsoft blinks - rolls back changes to partner channel - https://www.zdnet.com/article/microsoft-capitulates-and-agrees-to-undo-planned-partner-product-licensing-changes/#ftag=RSSbaffb68

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    Wayne Schulz - Schulz Consulting - 860-516-8990
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  • 7.  RE: Microsoft to partners "The free ride are over! "

    Posted 07-12-2019 12:40
    A little earlier than I expected...

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    Steve Iwanowski, NextStep Technology Advisors, aka DSD Lancaster PA ¯\_(ツ)_/¯
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  • 8.  RE: Microsoft to partners "The free ride are over! "

    Posted 07-12-2019 14:22
    Microsoft reverses field on the IUR announcement...

    "Your partnership and trust matters to us," wrote Gavriella Schuster, the corporate vice president in charge of Microsoft's One Commercial Partner Organization, in a post Friday morning. "Given your feedback, we have made the decision to roll back all planned changes related to internal use rights and competency timelines that were announced earlier this month. This means you will experience no material changes this coming fiscal year, and you will not be subject to reduced IUR licenses or increased costs related to those licenses next July as previously announced."

    The GeekWire news release can be found here.  
    https://www.geekwire.com/2019/nevermind-backlash-microsoft-says-partners-will-keep-internal-software-usage-rights/?utm_source=GeekWire+Newsletters&utm_campaign=e34566d77e-daily-digest-email&utm_medium=email&utm_term=0_4e93fc7dfd-e34566d77e-233566429&mc_cid=e34566d77e&mc_eid=5aa077a9a4

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    Jeff Mack
    President and CEO
    ICS Support
    Redmond WA
    425-820-6120
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