Could Microsoft stop partners selling its products? Resellers not signed up to new terms facing axe
CRN's sister title CPI assesses the changes made my Microsoft as deadline to accept new partner terms passes
Resellers that haven't signed up to Microsoft's new Partner Agreement risk being blocked from transacting with the vendor or on-boarding new customers.
All cloud solution provider (CSP) indirect resellers are required to accepted Microsoft's new Partner Agreement by 31 January, or else they will be restricted from transaction through Microsoft CSP programme.
It first launched on 1 September and partners have been able to on-board for up to 18 months. But, according to data from SoftwareONE released in December, around 70 per cent of CSP indirect resellers haven't completed the agreement or been on-boarded to Microsoft's system.
Paul O'Connor, head of SoftwareONE's OneClub, warned that partners who fail to sign the agreement will cause disruption to their business with customers.
He said that most resellers haven't anticipated that signing the agreement also involves an on-boarding process that could take several days - a delay that most partners haven't had to deal with before.
"Before they haven't had to do that - there wasn't a profile to be uploaded onto partner centre, but now there is," he told CRN's sister title Channel Partner Insight (CPI)
"Come 1 February, if partners want to on-board new customers or add new cloud services, then they will be restricted. Then looking further out, it's August 2020 when Microsoft says that if a partner still hasn't on-boarded by then, then they will effectively be removed as partner."
Microsoft first notified partners that it was going to launch the Partner Agreement in June 2019. The vendor claims that the new agreement is an evolution of the Microsoft commerce experience "to better support customer needs and demands of a cloud-first world".
The new agreement effectively consolidates six existing programmes, affecting Direct Bill Partners, CSP Indirect Providers and any partners on the various Microsoft Cloud Reseller agreements.
Microsoft claims the new agreement will provide a "modular, perpetual agreement that partners execute and store digitally", offering a simpler and faster way to manage your Microsoft account.
According to O'Connor, it will give more visibility to Microsoft indirect resellers on the vendor's digital platform, while also allowing Microsoft to better monitor and reward partners that are driving cloud consumption among their customers.
"Nothing has fundamentally changed, it's just a maturity in the partnership we have to have with them. The difference being that it's bringing the entire ecosystem into the terms. So before, indirect resellers were less contracted by Microsoft and less visible," he said.
"Now, for example, indirect resellers will be recognised by Microsoft for driving cloud consumption and adoption through their customers, which goes towards their partner status, recognition, rewards and engagement with Microsoft. So it's just bringing all of that together."
But with so many indirect resellers still not signed up to Microsoft's terms and conditions, Microsoft customers could face disruption as of February once the agreement deadline passes.
O'Connor said that the rate of change from Microsoft - including Windows 7 end of life and changes to Microsoft's multi factor authentication (MFA) policy - could have caused the MFA deadline to slip through the cracks.
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"Let's be honest, there have been lots of changes from Microsoft that we as a partner community had to adapt to. I think things like MFA on the security side, which has brought a lot of new requirements for partners to meet. This MPA part is just slightly newer. So maybe there's the element that MPA didn't get the same priority of focus because some other changes were more significant."
Rune Syversen, CEO of Microsoft partner Crayon Group, said that Microsoft's new Partner Agreement is part of a wider push by the vendor to get more partners to invest in its online platforms and transact through its online marketplaces
"They are raising the bar and asking for a higher degree of commitment, especially in platforms. They are looking at how they are structuring the channel both direct and indirect. There have been too many direct players in the market and too many have not been performing because they have not made the right investments," he said.
"This is quite typical for Microsoft in the ecosystem. They drop things out there and the ones that pick it up are the ones that will succeed. If you have not invested in digital platforms and you are still dependent on the more traditional stuff, then you will struggle with Microsoft."
"All of the big vendors are looking for partners that are strategically working on their platforms," he added.
Rich Gibbons, a software licencing specialist who is head of content and training at ITAM Review, questioned whether Microsoft would enforce its 31 January cut off point if so many partners have yet to be onboarded.
"The big question will be, if 70 per cent of partners have not signed up to it as SoftwareOne says, then will Microsoft actually block them?"
"To stop customers from being able to buy from a partner for an extended period of time will be quite a bold move, so I wonder if Microsoft will actually go through with it."