Microsoft slip-up to land channel multi-million windfall

Vendor opts not to recoup miscalculated Solution Incentive Programme payments

Microsoft is allowing its channel partners to keep mistakenly overpaid incentive payments thought to total around £20m, following a calculation error.

Microsoft Solution Incentive Programme (SIP) partners have benefited from the windfall, which an anonymous source told ChannelWeb was worth in the region of £20m worldwide.

According to an email sent to affected partners on Tuesday, which has been seen by ChannelWeb, a routine financial analysis on its incentive calculations and payments uncovered an error in which "ineligible Software Assurance only and/or Recurring Revenue were included in the incentive calculation".

Microsoft remained tight-lipped on the details of the slip-up when asked about it by ChannelWeb, and only said that it had "no plans to recoup funding related to solution incentives from our partners" and that it would not respond to further questioning.

Microsoft would not say how many of its partners have benefited from the miscalculation, but ChannelWeb has spoken to multiple partners who have received the email.

At the time it was launched last year, almost 400 UK partners were eligible for deal-registration discounts under SIP.

An anonymous source said that Microsoft originally planned to claw back the money from its partners, but changed its mind after "a mountain of negative feedback".

In the email, Microsoft said that it chose not to reclaim the overpaid money after "recognising that these incentive payments have been used to drive sales capacity and growth".

The source told ChannelWeb: "Microsoft was going to claw it back, but it got a mountain of negative feedback and concluded that it [should] take accountability for its mistakes, which is a nice surprise; it does not do that enough.

"[Microsoft makes] countless errors on incentives and payments and rarely apologises. This is a case where we have seen some maturity from Microsoft by taking responsibility for its own errors and not shifting it into the channel which lives on tiny [margin] percentages."

In the email to its partners, Microsoft said it was "committed to the highest standards of incentive calculation and payment accuracy", and advised those with queries to contact them.