Mixed reaction from partners after Microsoft decision to end internal use rights

July 8 2019

Update: Microsoft announced on July 12 that it would backtrack on plans to remove internal use rights for now.

Microsoft quietly announced on July 5 a decision to end its policy of granting internal user rights (IUR) to its partners as part of the Microsoft Action Pack, an offering used by many smaller partners to allow them to run a range of Microsoft systems, both on premises and in the cloud (including Dynamics 365 Customer Engagement) at no cost.

Microsoft also explained that licenses for partners will be tied to specific competencies:

Beginning October 1, 2019, the product licenses included with competencies will be specific to the competency you attain. Please review the benefits you will receive with your competency in Partner Center at time of purchase. Additional licenses can be purchased through commercial licensing to run your business.

In a statement to RCPMag, Microsoft explained that the Action Pack remains available for purchase by partners, and that the change is in line with other updates announced in May.

The announcement has generated a mix of reactions from the channel as partners size up the move. 

Microsoft MVP and perennial channel watcher Steve Mordue evaluated the news as another indicator of the company's current priorities. Along with other changes like increases in competency staffing requirements, fees for support, and ISV revenue sharing, he sees the impending loss of IUR as part of Microsoft's effort to reshape the channel.

It seems that Microsoft is struggling with how to achieve a new goal: dramatically increase the “Quality” of partners in their channel. One part of reaching that goal, is reducing the “Quantity”.

And he continued:

About Jason Gumpert

As the editor of MSDynamicsWorld.com, Jason oversees all editorial content on the site and at our events, as well as providing site management and strategy. He can be reached at jgumpert@msdynamicsworld.com.

Prior to co-founding MSDynamicsWorld.com, Jason was a Principal Software Consultant at Parametric Technology Corporation (PTC), where he implemented solutions, trained customers, managed software development, and spent some time in the pre-sales engineering organization. He has also held consulting positions at CSC Consulting and Monitor Group.

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jkoshar's picture

It is obvious that Microsoft thinks they can now do everything without Partners. This has been their attitude for the last several years. This only confirms our decision to pick another ERP product as our main cloud product.

DonPugh's picture

Internal Use costs Microsoft nothing. Is this just a ploy to wring some revenue from the channel?

In earlier years, many VAR's I know choose to use Dynamics GP for their internal accounting and billing. They would also upgrade to the new versions as they came out to develop competency in them, in order to provide better service to their customers. They also provided valuable feedback on system issues they encountered also.

So in my view, this is a lose-lose proposition for Microsoft and for partners.