Microsoft is introducing tougher payment rules after admitting that it lacked the power to terminate direct large account resellers (Lars).
The programme is codenamed 'three strikes and you're out'.
Under the terms of the deal, resellers struggling to make payments and those that slip up on reporting will be stripped of the right to sell Select after just two warnings.
It is understood that Microsoft wanted to 'put more teeth into the contract' as defaulting dealers were causing problems.
One Microsoft dealer said: 'Microsoft is pissed off at having to carry any debt so it is playing hard ball. Select is beginning to have a distie-like sales value - distributors have to pay bang on the button so they are issuing distie-like terms.'
Lars that fail to meet the criteria will receive 'strike one', a warning letter, and a monthly charge of 1.5 per cent on their late payment. If they fall foul again, they will receive 'strike two', a threat of termination.
A third failure to comply will result in 'strike three', a notice informing them the termination process has begun.
Chris Lewis, MS enterprise partner and licensing manager, confirmed there were problems with existing Lars. 'It was difficult to legitimately terminate a contract with a Lar unless it was agreed by mutual consent.
'There are bigger fiscal implications now that the Select business is growing so we've devised this programme across Europe to ensure prompt payment. Lars are causing unrest by not paying on time.'
Despite this, Lewis claimed it was not the beginning of a culling process.
Select makes up one-third of the company's turnover. The programme rolls out this week.
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