Microsoft isn’t relenting on cutting off internal user rights for Microsoft Partners

Earlier this week, just a week before Microsoft’s annual Inspire Partner conference, word got out that the company was cutting a long-standing perk for partners as part of an annual Microsoft Action Pack subscription available to them. For years and years, partners were able to gain “internal use rights” for software from Microsoft, meaning that with an Action Pack you could use the software to run your business. The idea apparently was to make it easy for partners to be running the Microsoft software they were helping to sell.

Some partners were quite incensed by the change in policy, which is to take effect at the beginning of Microsoft’s next fiscal year on July 1, 2020. In response to the complaints, company execs held a Partners only AMA webcast, attended by some 230 partners, according to a post by Mary Jo Foley outlining details of the webcast. According to Foley, “Microsoft officials held fast to their stance, saying the company had to make some trade-offs in order to deliver on other priorities, such as making it easier for partners to connect with more users, partners and sellers.”

Details of the costs and benefits of a Microsoft Action Pack are locked behind Partner Network gauntlets, but a 2014 post by RedmondMag, detailing a 44% rate hike in the costs of the Action Pack, revealed that for 10 licenses, partners would pay $475 per year. This included “full licenses for Windows desktops and servers, as well as other server products, such as SQL Server, Exchange Server, SharePoint Server and Lync Server…  internal-use seats of Office 365, Dynamics CRM Online and Windows Intune and Windows Azure usage credits…. (and) technical support, developer tools, marketing campaign materials and services and $100 in Bing advertising credits for the subscriber and $500 for the subscriber’s customers.”

So, for example, taking these 2014 numbers, a small business joining the Partner program could get full licenses for Windows, Office, and a number of server products, Office 365, Intune, and Azure credits (the post doesn’t detail how much credit was included), and technical support and other perks for 10 seats, for a price of less than $4/mo per seat. That’s an amazing deal, and it’s not beyond reason to believe that at least some companies realized that becoming a partner and subscribing to an Action Pack was an extremely cost effective way to get Microsoft products, regardless of any “partner” work they did (getting into the Partner program has some criteria, but it’s not that hard).

For whatever reason, Microsoft has decided to pull the plug on this perk of the program, and after next year partners are going to have to rethink their product licensing. For Microsoft, that may be the point, to cull out partners that are in the program for the cheap software as opposed to helping the company sell software and services more effectively.

We expect to hear some more about the kerfluffle at Inspire, but don’t expect Microsoft to back down on this one.