Microsoft Rescinds Decision To End Internal Use Rights

Company will 'roll back all planned changes' after outcry from partners about the decision to end the longtime channel benefit.

Microsoft has fully rescinded its decision to stop providing partners with internal use rights on its products, Microsoft Channel Chief Gavriella Schuster announced Friday.

Speaking to reporters this week, Schuster had noted that partner feedback had “not been good" on the plan, which would have ended internal use rights (IUR) for partners a year from now. The IUR benefit provides free product licenses for business usage by partners, and the perk has been a staple of Microsoft's partner program for decades.

[Related: Microsoft Channel Chief: Internal Use Rights 'Overran My Budget']

In a blog post on Friday, Schuster said that Microsoft will not move forward with ending IUR.

"Your partnership and trust matters to us. 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," Schuster said. "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."

Schuster said the decision was made after hearing feedback from partners in recent days. "We listened to you, and we have acted," she said.

The move has also come just ahead of the company's Inspire 2019 partner conference next week.

In addition, Schuster said that Microsoft will strive for better communication and engagement with partners around future changes affecting the channel.

"As we move forward, we commit to providing even more advance notice and consultation with our partner community to mitigate concerns and address issues up front," she said.

Ultimately, "our decision to rescind these changes required a thorough review, and a key determining factor was the connection and trust we have with you, our partners -- a valuable asset we do not take for granted," Schuster said. "We appreciate your feedback, apologize for the confusion this caused some members of our partner community, and look forward to growing our partnership with you in the months and years to come."

A Change.org petition criticizing the IUR move had received more than 6,000 signatures. Among the partners who had been advocating for Microsoft to re-consider its decision was Miguel Zamarripa, CIO of Colorado Springs, Colo.-based Simpleworks IT, who shared his message for Microsoft with CRN this week: "you still have time to make a course correction on this before you lose a large percentage of our advocate base."

Microsoft had disclosed last week that it would stop offering the IUR benefit starting July 1, 2020. The company had said it would re-purpose the money into other partner investments. Schuster had described the move as crucial for Microsoft's ability to continue funding new channel initiatives.

As Microsoft's products have shifted to being delivered as cloud services, rather than as on-premise software, the cost of covering internal use rights has risen substantially, she said. The bill for IUR had become "really big," Schuster said.

"It really overran my budget this year," she said. "I had to cut back on things that I was going to invest in this year. I had to cut back so that I could pay those bills."

Schuster said the budgetary issue had been exacerbated by the fact that Microsoft has been seeing a massive influx of new partners joining its programs, with an average of 7,000 new partners joining per month over the past year.