'We can't afford it anymore' - Microsoft partner boss breaks silence on IUR withdrawal

Gavriella Schuster breaks silence over deeply unpopular decision to end free Internal Use Rights for partners

Microsoft has opened up on its controversial decision to remove internal use rights from the MPN, with global partner boss Gavriella Schuster claiming the vendor can no longer afford to give away its software for nothing.

Last week, Microsoft revealed that MPN partners will no longer receive internal user rights (IUR) for software and cloud services, including Office 365, as of 1 July 2020.

In a press briefing ahead of Microsoft's Inspire conference in Las Vegas next week, Schuster (pictured) explained that the vendor's rapidly expanding partner base means that licensing freebies are now no longer affordable.

"We can't actually afford to run every single partner's organisations all around the world anymore, because it's not free," she said.

"We didn't really think that through until recently - until the bills started getting really big. We were like: 'wow, if our partner ecosystem keeps growing like this, we can't afford this…'

"We service 300,000 organisations around the world, and have around 7,000 join every month… We have to make trade-offs."

She acknowledged that allowing partners free access to its software has been instrumental in the growth of Microsoft's cloud services thus far.

However, she claimed that times have changed too drastically for the status quo to remain.

"I just don't know that people have taken enough time to realise what cloud has done to our business," she said.

"Traditionally Microsoft has had a natural supply chain and that's what partnering was. We had software and a partner would resell it, deploy it or integrate it. But cloud services changes everything and really collapses that supply chain.

"Now a partner says, 'help me to deliver more value, help me find my space in that collapsed supply chain'...

"So there's a lot of us helping them to understand what would be that value proposition for their organisation and working out how we pull them along."

The only exceptions to the end of IUR will be for development and test scenarios.

Schuster said that this will still help partners continue to gain new customers.

"We have tried to figure out: how do we help partners utilise the products so that they can sell them? With demonstration purposes and training, proof of concepts for their customers, dev-test environments, how do we help them get access in that way?"

She added: "I will say that after 24 years of working with partners, they're really great at working with customers and really great at innovation; [but] they're not so great at go to market.

"So helping them to create their value proposition, helping them to work out "What is different about you than the last twelve partners I just met with?...That's where we can help them by investing in go-to-market services and teaching them how to do digital engagement."

Despite Schuster's explanations, and insistence that partners play a "pivotal role to everyone at Microsoft", there is currently a groundswell of resentment against Microsoft's treatment of its partners.

A petition on change.org currently has 5,270 signatures, with people calling for the IUR decision to be reversed, and accusing Microsoft of being "at war" against "those who have been loyal".

Microsoft Inspire will start on Monday morning with Microsoft handing out its partner of the year awards.