Microsoft is axing internal use rights for its products for its reseller partners

Microsoft is discontinuing internal use rights for product licenses, as well as cutting previously included on-premises support incidents provided to its reseller partners.
Written by Mary Jo Foley, Senior Contributing Editor

Microsoft plans to discontinue its practice of providing its reseller partners with internal use rights for product licenses next year. Microsoft notified partners of this change via a post to its partner.microsoft.com site on July 1, the start of its fiscal 2020. The change will be final in a year, on July 1, 2020.

The post on Microsoft's site doesn't provide any reasons for discontinuing partners' internal use rights. All it notes is that product license use rights "will be updated to be used for business development scenarios such as demonstration purposes, solution/services development purposes, and internal training."

The post also says that starting October 1, 2019, product licenses included with partners' competencies will be specific to the competencies attained, and "additional licenses can be purchased through commercial licensing."

Microsoft also is cutting back on the on-premises product support incident benefits that its partners got as part of the Microsoft Action Pack (MAP) and competencies. As noted by CRN.com, Microsoft has included in a footnote to its page on technical support for partners a statement that says as of August 2019, on-premises product support incidents are not longer available for Action Pack and competencies. Those MAP subscribers or Gold or Silver partners whose renewal date falls before August 2019 will be able to keep this benefit "until your next anniversary," the footnote says.

Unsurprisingly, partners who considered compensated product licenses to be part of their partner benefits, as they have been traditionally, were none too pleased. No doubt Microsoft officials will get an earful from partners about these changes in mid-July during the company's annual Inspire partner conference in Las Vegas.

I've asked Microsoft if anyone is providing reasons for the discontinuation of these partner benefits, but so far no word back.

The move to cut back on product use rights reminds me of a similar move Microsoft made in 2013 when it eliminated TechNet Subscriptions, which provided many with a relatively cheap way to get access to many Microsoft products and services. At that time, Microsoft was guiding those affected to purchase paid MSDN subscriptions and/or use evaluation copies of the software which are free for a limited time.

Update (July 8): I've still not received any further word from Microsoft, but RCPMag got a statement from Microsoft on Friday night. A spokesperson's statement noted that Microsoft is "refocusing our partner business investments and programs." Among those changes is the removal of on-premises product support incidents currently included in Gold and Silver competencies and the Microsoft Action Pack. As my article above noted, partners who attain a competency will still get product licenses affiliated with that competency as part of their benefits.

Microsoft will continue to make the Microsoft Action Pack available for purchase for those who want Microsoft products and technologies "for business development scenarios" like app development and internal training, but there will be no more free product licenses for internal use as of July 1, 2020.

Update No. 2 (July 8): I just got a somewhat different response from a Microsoft spokesperson. I asked whether this change in policy was the result of Microsoft cutting costs. The response:

"We are continually looking at where and how to make investments in our partner business to create the most value for our partners. We outlined our approach to these investments in a recent blog post, 'Investing in partner success and growth.'  Like any business, we need to prioritize where we are going to commit funding and resources. In this case, we made the decision to invest more heavily in programs and resources that support new business growth, and helping partners connect with more customers, other partners, and Microsoft sales teams. One of the trade-offs is changing our approach to providing product licenses for internal use. We will continue to offer product licenses for dev/test scenarios and to win business, and the internal use rights won't change until July 1, 2020, to allow time for partners to plan. While we understand this may be an adjustment, we believe the evolution of our partner business investments will allow partners to better capitalize on the cloud opportunity."

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