Microsoft reassures LARs over fees

Fenton: the timing of the change is interesting

Microsoft has moved to reassure its large account resellers (LARs) that its upcoming enterprise agreement (EA) fee change will not leave them out of pocket.

On 1 May, the software giant will overhaul its EA fee structure for the first time in nearly two years as it looks to place greater emphasis on new business generation and its high-growth category products.

Fees for adding category products, such as SharePoint, into EAs will be raised by two percentage points across the board. Fees for signing net new EAs will be raised by the same margin, but only for firms with fewer than 6,000 staff.

However, with Microsoft cutting fees across the board for software activation, LARs last month were concerned that it will be impossible to claw back the same margins under the new system.

However, Simon Aldous, UK partner group manager at Microsoft, said that the changes would be “net neutral”.

“If you look at the models we have run on our historical business over the past 12 months, it is net neutral. We are not looking to reduce the fee,” he said. “We are evolving our partner programme and the incentive structure to ensure we are aligned with our strategic objectives.”

Tim Dickens, sales director at LAR Trustmarque, claimed the timing of the changes – shortly before Microsoft’s financial year-end – suggest Microsoft had commercial as well as strategic motivations.

“Microsoft is doing this to change behaviour, which I accept,” he said. “But the timing is designed to help its bottom line as May is its biggest month for transacting direct EAs.”

Stuart Fenton, EMEA president of LAR Insight, said: “We certainly understand Microsoft’s long-term objectives, but the timing of the change is interesting.”