Microsoft finally explains why it decided to end Internal Use Rights for its partners

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When you join Microsoft Partner Network, Microsoft gives free licenses to Microsoft products and services for internal usage. Microsoft calls this benefit as internal use rights (IUR) and it was introduced in early 2000s.

Early this month, Microsoft announced that it will retire the internal use rights (IUR) association with the product licenses partners receive in the Microsoft Action Pack. This change will be effective from July 1, 2020. This change does not affect product license use rights for business development scenarios such as demonstration purposes, solution/services development purposes, and internal training. However, many partners are not happy with Microsoft’s decision. Because, they need to start paying several thousand dollars for Microsoft products and services from 2020.

Microsoft Channel Chief Gavriella Schuster explained Microsoft’s decision to end Internal Use Rights for its partners, read about them below:

  • IUR program was started when most of the product licenses were for on-premise software. When Microsoft offered it for free to partners, Microsoft was only losing some revenue from the sale of the software. For example, if a Microsoft partner uses 1000 Office 2013 licenses, Microsoft has to just give away 1000 license codes.
  • Due to huge shift in market landscape, Microsoft partners have started using Microsoft cloud services for free through IUR program. Unlike on-premise software, delivering and offering support for cloud services comes with a huge recurring cost. In the recent years, Microsoft realized that bills for cloud services usage by Microsoft partners have increased substantially.
  • Due to significant growth in partners and their cloud usage, Microsoft has reached a point where they can’t afford offering free cloud services to partners. According to ZDNet, Microsoft is spending around $200 million plus annually for IUR program.
  • Every organization will have a limited budget. In order to continue IUR program, Microsoft channel team had to cut other important programs for partners. So, they have decided to end the IUR program.

Microsoft is explaining their situation to partners through various channels. Microsoft is confident that partners will understand the reason behind this decision. On a related note, Microsoft yesterday the following new programs that will offer huge opportunities for partners in the coming months.

  • General availability of the Microsoft Security competency. This new competency allows partners to market their expertise and provides access to a range of benefits designed to enable business growth and profitability.
  • Five advanced specializations. These include Windows Server and SQL Server Migration to Microsoft Azure, Linux and Open Source Databases Migration to Microsoft Azure, Data Warehouse Migration to Microsoft Azure, Modernization of Web Applications in Microsoft Azure, and Kubernetes on Microsoft Azure.
  • New advancements in marketplace. Additional pricing models, a rewards program and a new route to market are rolling out in July for companies that publish transactable offers in Microsoft’s expanded commercial marketplace. The pricing models include monthly and annual SaaS billing, flexible, custom-metered billing options, standard contracts, and free SaaS trials that convert to paid engagements.

Source: Microsoft

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