back to article Microsoft giveth and Microsoft taketh away: Partner boss explains yanking of free licences

Microsoft's Toby Richards, General Manager of programmes within the Commercial Partner organisation, has explained the company's removal of free licences from the benefits assigned to resellers. Richards presented an "Ask me anything" (AMA) session yesterday on the subject of "Partner investments and incentives" – and there …

  1. bpfh Silver badge

    I will admit

    Over a decade ago, and at about 300 euros at the time for 10 internal use full-fat-except-for-Visio Office licences, servers, expression web (before it went free) and a ton of development it was a poor man’s msdn... price vs roi, I signed up. Cheap licence compliance at the time. I can understand people being annoyed!

    1. MatthewSt

      Re: I will admit

      Yep, we're part of the problem too. Been on Action Pack for years, but we're a software shop and don't resell any Microsoft products. It'll increase our costs a bit (O365 licenses etc), but we see it more as a discount coming to an end really.

      1. AMBxx Silver badge
        Unhappy

        Re: I will admit

        A lot of the affected people aren't resellers. I'm a one man band. I don't resell any MS software, but I do provide services to customers who spend lots on MS. Part of the idea of Action Pack was to get the likes of me to be familiar with the MS software stack.

        First technet subs went, now Action Pack is being restricted. I can't qualify for any of the programmes as they all need 2+ people to be qualified in some way.

        1. DontFeedTheTrolls Silver badge
          Facepalm

          Re: I will admit

          I regularly provide my services to Microsoft who place me on site with a couple of large banking institutions who spend millions on MS every year.

          Oh well, the banks are looking at AWS, time to stop tinkering with MS in my bench time and take up some AWS courses.

  2. chivo243 Silver badge
    Windows

    It has to be teleprompter error

    10,000 enthusiastic resellers sign up every month or 120,000± a year?

    I wonder how many won't be able to afford MS terms, and use another solution and continue to sell MS products?

    1. John Brown (no body) Silver badge

      Re: It has to be teleprompter error

      The churn rate must be enormous. You just can't sustain that many resellers at such a growth rate. Unless most of them are, as some posters have admitted, just using it as a way get free/cheap licences and never make a single sale.

      It sound s like MS created a system and put no controls in place to restrict abuse. Oh....wait....that's their business model.

  3. Andy Taylor

    The real problem is their entire licencing model:

    Want to serve DHCP from a MS server? Every client needs an MS licence even if it's not running Windows.

    Microsoft once charged an organisation I worked for a £12,000 licence fee because the clients connecting to IIS were neither company employees or members of the public. £12k for literally nothing.

    1. Anonymous Coward
      Anonymous Coward

      Wish the DHCP nonsense was a myth; it has been confirmed many times over. Fortunately, there are plenty of alternatives out there.

    2. Richocet

      That was a mistake.

      I have had that exact conversation about IIS a couple of times with Microsoft at different previous employers. The license droids soon realised that the the 'per seat' licensing model that they see the world through is not appropriate for websites and online businesses.

      For a number of reasons, but one being that you can't predict or control how many different people view your website.

      1. david 12 Bronze badge

        Website

        MS used to have a server licence that was specifically for web servers, where the clients didn't connect using Windows authentication. If they aren't still offering that licence, it would be because not many people use Windows Server as a web server. Frim memory, t was a cheap licences too

      2. Andy Taylor

        In this case the site wasn't for the public, only affiliated organisations. It was the fact that they were neither "internal" or "Internet" that meant the licence was "required". Personally I would have told them where to go on that.

        Add that to the fact that a Wiki server running on LAMP would have been a perfect alternative to the proprietary CMS, the whole thing cost a lot more than it could have.

  4. Starace Silver badge
    Facepalm

    Shows the decline in their thinking

    Once upon a time they would have treated the nominal cost of free or discount licenses as a worthwhile way to ensure their products were widely used and as many people as possible were familiar with them, ensuring they won the larger market.

    Now they screw the pennies but ignore the long term cost.

    Not a huge surprise considering they also 'save' money by cutting back on QA (which once used to be actually not too bad) while forgetting that selling an unreliable product ultimately costs you sales.

    No need to name names as it's pretty obvious who's responsible!

    1. MatthewSt

      Re: Shows the decline in their thinking

      For your first point, it's not so much a nominal cost anymore. Some of these internal use rights licences are for subscription products which made them severely discounted. Not to mention there's no restriction on who can buy them so if you have fewer than 10 employees you can pretty much run your business at a substantial discount.

      As for your quality comment, something has bugged me about it for a while and I've just worked out what it is: Has Microsoft's quality really gone downhill? Have I mis-remembered 95 (before OSR2), 98 (before SE), NT (both before and after SP4), ME, 2000 and XP? Were these all great products at launch when they had the QA department? I'm not sure the "lack" of a QA department has really changed the quality at all to be honest, we just think it has because it spreads on the internet as soon as something goes wrong.

      Just my 2p :)

      1. AMBxx Silver badge

        Re: Shows the decline in their thinking

        After the first release of XP, MS changed a lot of their internal workings and went for a security first mindset. Post SP1, XP was close to being a new release and it was very stable.

        With the old 95/98 etc, a lot of the problem was being built on top of DOS. It was doing stuff it wasn't designed to do.

        I think a bigger problem, in general terms, is that it's so much easier to patch software now. In the past, to release a service pack involved a lot of cost and distributing all those cover CDs. Now we can download a monthly patch to (hopefully) fix any problems. It's so easy that it's removed much of the incentive to test software.

        1. Doctor Syntax Silver badge

          Re: Shows the decline in their thinking

          "It's so easy that it's removed much of the incentive to test software."

          The incentive should be the reputation for quality.

          1. Doctor Syntax Silver badge

            Re: Shows the decline in their thinking

            On rereading that I've spotted an error. It should have been "a reputation for quality". Using the definite article implies they have one.

      2. Dan 55 Silver badge

        Re: Shows the decline in their thinking

        If you remember the Trustworthy Computing department was set up in 2002 and killed by SatNad in 2014. It did sort out XP and whatever your complaints about Vista or 8, they probably didn't include the huge fuckups like we've seen for Windows 10.

        Also, Balmer was a salesman and understood why he had to give licenses to the salespeople selling their products. SatNad is all about "this is my cloud and you will pay for usage by the second", he's only ever worked on cloud projects at MS.

    2. Updraft102 Silver badge

      Re: Shows the decline in their thinking

      Before they were looking to gain dominance of the desktop market, and it worked. Now they're clearly not interested in the desktop market anymore, and are looking for a way to turn that monopoly into quick cash. Everything MS has done with Windows since Windows 10 arrived has been about making or saving money now while harming the Windows platform long-term.

      There were lines that the company "cleverly" parodied as 'Micro$oft' for their relentless pursuit of cash never would have crossed during the Gates or Ballmer eras, when Windows was at the center of the Microsoft universe. Nadella-era Microsoft crossed those lines so long ago that we can't even see 'em from where we are now.

      Nothing about Microsoft's actions regarding Windows suggests any desire whatsoever to preserve the platform going forward. It's all about cashing in now regardless of how much it harms the platform in the future, and has been since Nadella came on board. This is not Microsoft failing to realize that they're killing Windows by monetizing it to death short-term. This is about the rest of us failing to realize that this is, in fact, the desired result.

      The Windows citadel is being demolished and sold for scrap as we watch.

    3. Marty McFly
      Thumb Down

      Re: Shows the decline in their thinking

      >Now they screw the pennies but ignore the long term cost.

      You say that like it is unique to Micro$oft and not representative of the entire software industry.

  5. Franco Silver badge

    I, and the vast majority of contractors I know, subscribe to the Action Pack. Yes, the software benefits are great, but it is also a great boost to your chances of securing more contracts when you tell potential clients that you are a Microsoft Partner and have access to technical support incidents which they would have to pay through the nose for.

    As I said in another post, pulling the lot is pretty draconian. It would be a much smoother transition for everyone and would win MS back some good will if they cut the allocations and/or allowed companies to choose their benefits depending on their needs.

  6. Claverhouse Bronze badge

    This was the removal of "Internal use rights" (IUR) from the licences granted to resellers who sign up for Microsoft's "Action Pack" or earn a gold or silver "competency" in a specific area. A fee is payable, starting at £350 for an Action Pack, but it is small compared to the cost of the licences awarded.

    Not being a Softie I have no real understanding nor interest in all this, but it is not reflexive Microsoft bashing to mention this model seems very reminiscent of multi-level marketing schemes, and evangelical prosperity churches, both of whom have valued partners who 'earn' bonuses through increased giving...

  7. a_yank_lurker Silver badge

    Penny Wise, Pound Foolish?

    What strikes me about this is the partners exist primarily to market to and support small to mid sized businesses that MS would not directly sell to or properly support. The partners need to be have access and familiarity with the product line to properly support their customers. In essence the partners, being smaller companies, handle similarly sized companies who would be minuscule accounts at the behemoth; a net win for MS as it promotes their products in this market. Rising the prices to the partners likely will drive some out of business leaving their clients adrift. Others might start pushing other solutions to their clients and they would be in better position to know which clients could ditch MS either partially or fully. MS gets a few more bucks now but they might be setting up a major long term shift in business market as the partners try to stay afloat.

    1. Doctor Syntax Silver badge

      Re: Penny Wise, Pound Foolish?

      "Others might start pushing other solutions to their clients and they would be in better position to know which clients could ditch MS either partially or fully."

      If they really see their future as running servers for their customers to connect to they maybe don't care what clients the customers are running and if they can ditch Windows altogether then they don't have to support it.

  8. scottyctalk

    Microsoft isn't stupid...

    Check eBay and you'll find where those 9600 monthly members are coming from. $15 Visio licenses (well, actually just a key) and $25 for Win 10 and Office 2019 are great deals, but Microsoft isn't stupid, they clearly see where these keys are coming from. There is an entire industry around getting your hands on an action pack, then selling off the keys. As usual, 9600 people ruin it for the rest...

    1. martinusher Silver badge

      Re: Microsoft isn't stupid...

      Surely in this day and age when software's always phoning home it should be really easy to track keys licensed to one user that turn up somewhere else?

    2. Updraft102 Silver badge

      Re: Microsoft isn't stupid...

      $25 for Win 10 and Office 2019 are great deals,

      I wouldn't take Windows 10 for free... why in hell would I pay $25 for it? That is, of course, assuming you meant $25 each for Windows 10 and Office.

      If you meant $25 for both of them together, it makes more sense. $50 for Office, and pay them $25 to take Windows 10 along with it...

  9. Tim99 Silver badge
    Windows

    The rot set in

    when MS crippled their Small Business Server. It was included in the DAP.

    Many small/medium consulting/software businesses, including mine, used it themselves and and sold it to our customers. It was normally cheaper for the punter with 25 users to buy SBS than to buy the base Server and SQL Server, and they got Exchange and a number of other goodies thrown in too.

    I realized then that MS were moving towards the "Enterprise" and "home users" as separate businesses, and that they didn't much care about the large SMB base that had helped drive their business to the then current levels of ubiquity. It was just after this that I saw the big Enterprise boys sell a small charity with 20 seats separate PDC, SDC, Exchange, SQL, and Back-Up servers (yes, really, 5 servers for 20 users) Needless to say it hardly worked, and the charity had to rely on personal mail for 4 weeks when the Exchange Server didn't have a big enough (mirrored) disk to run eseutil/move/export after it had grown to nearly fill the disk in 3 months.

  10. david 12 Bronze badge

    Small Business

    Not to be repetative, but .... MS started moving out of the "small business" market more than 10 years ago. "Small Business" was never more than a niche that MS created between residential and enterprise, and MS is an Enterprise and Residential player now: they don't need small business.

    1. Gaius

      Re: Small Business

      Yes and no. Microsoft ‘s goal is small business == Azure. On-prem is for consumers and enterprise.

  11. Simon Beckett

    Gartner et al

    "Microsoft's strategy is influenced by the supposition that customers now have a preference for more specialist resellers/ integrators, according to a slide presented that was credited to Gartner and Forrester researchers."

    Gartner and Forrester eh? Those well known proponents of independent opinion and research in the race to the bottom of "average"? One has to wonder why Microsoft's strategy isn't based on the influence of things their partners are telling them, since 90% of their revenue is transacted via partners. And none of their revenue is transacted by Gartner (although a chunk of Gartner's is presumably paid for my Microsoft)

    "The problem with this narrative is that it ignores the millions of small businesses who look for more generalist help, provided by the small resellers most affected by Microsoft's changes."

    Any small partners who took the time to read anything coming out of Microsoft since the OCP changes in 2015 will already know deep down that Microsoft have been ignoring the opinions and needs of small partners for years. We just didn't want to admit that Microsoft were happy to throw us all under the bus. I have heard Microsoft staffers complaining that MPN members do not engage with Microsoft, but we've tried, and tried, and we've failed. At the same time they ask us to wrap new products round their tech and be innovative, then they change incentives to reflect what Microsoft want us to do, stifling any kind of invention in the process. Time to face facts fellow partners, unless you're a gold partner jumping through their hoops and letting Microsoft dictate how to run your business and what to sell to your customers, we're of no value to them anymore. Put simply Microsoft have too many partners and they just want to concentrate on the big tickets, in the assumption that the direct CSP resellers will pick up the pieces, as they already have been for the last couple of years.

    1. AMBxx Silver badge

      Re: Gartner et al

      >> Microsoft staffers complaining that MPN members do not engage with Microsoft,

      How do we engage with MS then? By the time I've filled in one set of 'engagement' forms, they rename the process and release new documentation. There's a limit to the number of times I'm going to complete forms for them.

  12. Anonymous Coward
    Anonymous Coward

    Am I the only one...

    who immediately thought "then stop running Microsoft software"? I suppose there's a number of customers who are arc-welded to Microsoft for various reasons, but in-house, running a Linux distro and open-source office software would save a HUGE amount of money.

    1. Robert Sneddon

      Support

      When your Linux distro doesn't play nice with some hardware and your open-source solution goes boink! who do you, the naive computer user without ten years experience of coding and Linux kernel hacking go for support?

      " Ask ye not on Usenet for they will tell you 'yes' and 'no' and 'try another distro' "

      The Web is worse, OSS and Linux forums are bloody useless for help, a lot of what is searchable is dated and not relevant any more. MS despite all their problems have up-to-date support documentation and HOWTOs available and, pace this article's theme, there are a lot of third-party support companies and one-man-and-a-dog folks who can fix MS-based stuff for people and keep them running.

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