Microsoft rescinds channel changes

Microsoft has rescinded its planned changes to internal use rights (IUR) and other aspects of its channel program.

Channel chief Gavriella Schuster blogged early on Saturday morning, Australian time, that based on channel 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. 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.”

The reason? Schuster said “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.”

Microsoft has also promised to communicate more about such changes in future.

“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,” Schuster wrote.

 “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.”

"George", the reseller who started the petition that did much to bring attention to the issue, wrote that "Partners across the world should feel a sense of victory today. The power of community transcends even the largest corporations for our power comes from the heart. Our power comes from the commitment to one another knowing that alone we can do nothing but united we can achieve anything."

COMMENT

The decision to rescind these changes will be mightily welcome.

But Schuster’s words ring hollow. Microsoft clearly did take partner trust for granted. Then the company made matters worse by explaining the changes were made because IUR had blown its internal budgets.

CRN knows many channel businesses who budget carefully and watch every cent to ensure they can make payroll every month. When a vendor that boasts annual revenue of US$110 billion tells those partners it needs to balance its own books by shifting costs onto them, it was bound to rankle. That removing IUR also had the potential to make it harder for those partners to sell Microsoft products meant the planned changes looked not just harsh, but also illogical.

There’s some small upside here for Microsoft in its swift reversal. Your correspondent recalls how VMware’s vTax incident in 2011 rumbled on for weeks before the vendor changed its tune.

By acting faster, Microsoft has avoided weeks of bleeding and given itself clearer air ahead of its Inpsire partner conference.

But damage has been done: as CRN will reveal on Monday, trust in the company collapsed after the changes.

Now Microsoft has to win it back.