Microsoft’s Recent Partner About-Face Shows White Labeling is a Smart Move

Gavriella Schuster, corporate vice president and One Commercial Partner channel chief at Microsoft, had recently stated:

We have essentially let them [partners] run their environment on Microsoft for free. Now, just like every other customer, they’ll have to pay for the services that they use

In other words, Microsoft partners will no longer receive internal user rights (IUR) for software and cloud services such as Office 365 as of July 1, 2020, the technology disclosed online.

Gavriella Schuster, corporate vice president and One Commercial Partner channel chief at Microsoft

The company has backtracked on this policy after an outcry from resellers.

Gavriella wrote in a post online:

Over the last several days, we’ve heard from many of you about changes we were planning to make regarding benefits included with gold and silver competencies, and those in the Microsoft Action Pack. These included benefits related to internal use rights, or IUR — specifically the terms governing the use of product licenses to run partner businesses.
I want to thank you for sharing your feedback with us and would like to provide an update on partner benefits.
Your partnership and trust matters to us. Given your 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.
We listened to you, and we have acted.

She goes on to say Microsoft will continue to invest in partners – they are a “valuable asset” and they will not take them for granted.

What some may learn from this news is companies can change reseller agreements and given sufficient pressure can reverse course if they feel the pressure from MSPs and VARs is sufficient.

Mark Sher of Intermedia

This week we had an exclusive interview with Mark Sher, Vice President UC Product and Marketing at Intermedia – his company provides white label UC service to MSPs. He explained his company allows MSPs to own the UC relationship as opposed to giving it up to a third-party company who could change terms at any time.

Intermedia helps MSPs with taxation, billing, increased margins and has month-to-month contracts. In this way, Mark says, the MSP gets full value for these relationships in the case of acquisition and are protected from a change in terms from the provider.

We couldn’t stop thinking about Mark’s thoughts as we reported on Microsoft’s various stances on this issue. We aren’t saying Microsoft is at fault for changing terms mind you, just that what they did is not uncommon. Providers are under pressure to increase margins – often, UCaaS companies aren’t even making money so they have to look everywhere to generate extra income. Sometimes it is the reseller or MSP who takes a hit for the greater profit good.

Selling white-labeled solutions when possible is a smart move.

Attention MSPs…

Learn about the latest in everything you need! UCaaS, the Channel, IT, IOT, Edge, Cybersecurity, AI, SD-WAN, and the Future of Work at the world’s only SD-WAN Expo and MSP Expo, part of the ITEXPO #TechSuperShow, Feb 12-14, 2020 Fort Lauderdale, FL.


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