7 ms·

Microsoft backtracks on Partner Network changes that sparked uproar

63 points by miles 7y ago

Sujan 7y ago
Relevant bit here: > Given your feedback, we have made the decision to roll back all planned changes related to internal use rights and competency timelines that were announced earlier this month. This means you will experience no material changes this coming fiscal year, and you will not be subject to reduced IUR licenses or increased costs related to those licenses next July as previously announced.
- jlgaddis 7y ago
  > ... this coming fiscal year ... No mention of the next fiscal year, or the one after that. Microsoft already decided they want to push these changes through -- and they will. It might just take them a little longer than originally planned but Microsoft will continue to "extinguish" anyone or anything standing in their way. (I know this isn't a popular opinion with some of the developers here on HN -- who seem to think they are Microsoft's BFFs -- but some of us don't forget so quickly.)
  - erk__ 7y ago
    Microsoft is a public company so they have to keep the investors and the board happy, and they are happy when there is more money flowing into the company.
    - techntoke 7y ago
      Yet they are so desperate to continue making money that they had to adopt Linux and containers to stay relevant.
      - jlgaddis 7y ago
        That wasn't desperation at all. Offering their customers exactly what they wanted so that they didn't go elsewhere to get it? That's just a smart business move.
      - manigandham 7y ago
        Staying relevant is good business.
    - redis_mlc 7y ago
      > is a public company so they have to keep the investors and the board happy No. The US courts have held that company managers have wide latitude in how they perform their duties. Managers don't have to do anything in particular, since you know, they were hired to manage the company. They do not have have to "maximize shareholder profit" as HN commenters always say. Having said that, the board or large shareholders (more than 5%, or a large group of shareholders) could influence mgmt. if they wanted to either via the board or the courts. But the onus is on them, not mgmt., to make that effort.
  - Dayshine 7y ago
    They're withdrawing subsidies for resellers of their products. It's pretty hard to see how that is them extinguishing competition... Isn't subsiding by a major market power generally seen as an anticompetitive action?
    - galaxyLogic 7y ago
      I believe that businesses are allowed to give special deals to customers of their choice as long as they don't discriminate based on race color religion sexual preference, maybe age? It's really just a question if it is in MS interest to make sure their "partners" always use MS products instead of those of the competition. It's not a question of ethics. I think the term is "price differentiation". Some people get it cheaper.
    - jlgaddis 7y ago
      > They're withdrawing subsidies for resellers of their products. It's pretty hard to see how that is them extinguishing competition... Microsoft was going to yank internal use rights from the "partners". For many (most?) of them, this is the primary reason they remain partners. Without this benefit, lots of them will choose not to remain partners. Many companies will only work with Microsoft partners. Lots of them would work directly with Microsoft if that were an option (as some are speculating it will soon be). So there will be a lot less "partners" standing in between Microsoft and their customers. Then, at some point, Microsoft will start working directly with these customers, cutting out the middleman, sucking them into their subscription models (which will be expanding), have more insight into their operations, and will be better able to track (and enforce) licensing. To put it a simpler way, Microsoft is simply going to cut out the middleman -- the partners -- and take their customers -- and revenue -- away from them.
      - zubspace 7y ago
        There are many partners which are not simple resellers. Dev shops and integration businesses which do a lot of customer oriented work, which Microsoft itself could never reliably take over. Those partners profit from the MPN licenses by using them internally and on the other hand get in touch with new tech from Microsoft, which they could maybe use in one or another way. Losing them would be really bad for Microsoft, because they are at the forefront installing, integrating and extending the Microsoft stack into their customer base. Think of deals in the government or education sector. Microsoft should not put those businesses and resellers into the same basket. But they are right now and every change affects them both. Hard to get out of that program which has been running since decades...
  - manigandham 7y ago
    Who exactly are they "extinguishing"?
dang 7y ago
The earlier thread: https://news.ycombinator.com/item?id=20389077 https://news.ycombinator.com/item?id=20389077
zubspace 7y ago
This is so strange to observe from the outside. The statements of Gavriella Schuster, when that whole debacle started, provided some insight into the partner program: "We can't afford to run every single partner's organisation for free anymore, because it's not free" "Put it this way, when customers are paying for services they turn them off very quickly. When we give it away for free the partners leave these services on. While my budget has to pay internally for this." "We have given partners a year to figure this out. I just can't make it free anymore." "If we hadn't had such an influx of new partners and everyone's usage hadn't been this high, then we may not have been in this situation" The article, where these quotes are from, talks of 7000 new partners each month [1]. So, on one hand, Microsoft clearly has a communication problem. The proposed changes slipped in without a clear, official statement and wasn't the backlash obvious? Why didn't anyone stop Schuster from doing this? On the other hand, how can they continue like this? They lose huge amounts of money because partners get a ton of licenses for free. So what's their plan? Unfortunately the announcement is as shallow as possible. Hard to regain trust this way. But many development shops, as the one I'm in, are so dependent on Microsoft and the partner program, that switching is nearly impossible... [1] https://www.dailytimes.live/business/microsoft-cuts-partner-benefit-surprise-move-88246844 https://www.dailytimes.live/business/microsoft-cuts-partner-...
- drawkbox 7y ago
  This highlights why budgets and metrics don't always tell the full picture. The manager/bizdev/MBA on the team sees a loss to their budget. To CYA they want to fix that budget issue, but they are only looking at the short term cost not the long term. The "I just can't make it free anymore." statement shows this with the "I" word, only thinking of their short term focused budget. But the long term point is this: > But many development shops, as the one I'm in, are so dependent on Microsoft and the partner program, that switching is nearly impossible... Most Microsoft partners have high switching costs, higher because they get lots of it free, so developers/network/technology teams are locked into Microsoft due to this. These policies helped build the Microsoft product adoption. Just as anything that is free, some of those free licenses led to pay licenses, and some wouldn't be used at all without free licenses. I have seen this with many Microsoft products and it is really how products like Windows and Photoshop came to such widespread use, people got it free or pirated it and eventually the purchases came. It appears this manger/product lead is more focused on the business metrics of short term and right now rather than historical policies that locked lots of teams/partners to Microsoft. This plays out over and over at organizations: - If the engineers/designers/developers/product people win, they keep the long term programs and research and development going that builds better products to bring people in making marketing and business multipliers easier. - If bizdev/managers/MBAs win, they cut all that out because short term it looks better to them. To them the 'open' mode [2] and research and development or free programs hit the immediate bottom line but it may not be clear how much they are responsible for the products that are marketable. Much of that is customer adoption due to good policies around engineering/product/design that these types start to strip away because they don't have a clear ROI but may in fact be a big reason for success. A bit of the Ballmer era tried to come back from the dead, they put it under the lake like Jason Voorhees from Friday the 13th for a while again. This is the age old battle in innovative/technology/product companies. Looks like the engineers/product/developer side won this round which is a good sign for Microsoft. Bizdev/MBA/manager/marketing/metric focused companies kill the long term product lifeline and the 'open' mode every single time [2][3] This is also mentioned in 'How Software Companies Die' which is almost law now: > "The environment that nurtures creative programmers kills management and marketing types - and vice versa." [1] I wonder when this knowledge will make it back to HBS MBA business school, there are plenty of examples in the market. Business and marketing should be the multiplier of your value, they are not the value creators. The product / engineering / creative / research / development / design departments and the people you have are the value creators and customers are also a stakeholder that must be considered long term not just short term. Product development has two sides, value creation (engineering/design/product) and value extraction (MBA/bizdev/marketing). It is a balance, when one side has too much power, it kills the product but much faster on the value extraction side. In most cases, lack of power in the value creation side ends the company or leads to stagnation because all the value and grace is extracted. [1] http://www.call-with-current-continuation.org/rants/how-companies-die.txt http://www.call-with-current-continuation.org/rants/how-comp... [2] https://genius.com/John-cleese-lecture-on-creativity-annotated https://genius.com/John-cleese-lecture-on-creativity-annotat... [3] https://news.ycombinator.com/item?id=20353914 https://news.ycombinator.com/item?id=20353914
FooHentai 7y ago
My previous employer did a lot of cloud migration/integration work for clients. They erred in their sales strategy where cloud became 'the only thing we'll talk to clients about'. In doing so, they not only dried up their sales pipeline, but lost most of their existing customer base as well. This (attempted) change to the partner internal-use licensing feels like it's cut from the same cloth - The existence of IUR didn't seem to be an issue previously and the need to change it now doesn't pass the sniff test. Probably a better play here would be to give partners a choice - Each year you can have the IUR OR equivalent entitlements in Azure/0365. That gives partners a transition path, within a construct where the deal can be sweetened/tweaked as necessary, and doesn't make the mistake of brow-beating anyone towards cloud adoption (which tends to have the opposite effect).

63 points by miles 7y ago

Relevant bit here: > Given your feedback, we have made the decision to roll back all planned changes related to internal use rights and competency timelines that were announced earlier this month. This means you will experience no material changes this coming fiscal year, and you will not be subject to reduced IUR licenses or increased costs related to those licenses next July as previously announced.

jlgaddis 7y ago
> ... this coming fiscal year ... No mention of the next fiscal year, or the one after that. Microsoft already decided they want to push these changes through -- and they will. It might just take them a little longer than originally planned but Microsoft will continue to "extinguish" anyone or anything standing in their way. (I know this isn't a popular opinion with some of the developers here on HN -- who seem to think they are Microsoft's BFFs -- but some of us don't forget so quickly.)
- erk__ 7y ago
  Microsoft is a public company so they have to keep the investors and the board happy, and they are happy when there is more money flowing into the company.
  - techntoke 7y ago
    Yet they are so desperate to continue making money that they had to adopt Linux and containers to stay relevant.
    - jlgaddis 7y ago
      That wasn't desperation at all. Offering their customers exactly what they wanted so that they didn't go elsewhere to get it? That's just a smart business move.
    - manigandham 7y ago
      Staying relevant is good business.
  - redis_mlc 7y ago
    > is a public company so they have to keep the investors and the board happy No. The US courts have held that company managers have wide latitude in how they perform their duties. Managers don't have to do anything in particular, since you know, they were hired to manage the company. They do not have have to "maximize shareholder profit" as HN commenters always say. Having said that, the board or large shareholders (more than 5%, or a large group of shareholders) could influence mgmt. if they wanted to either via the board or the courts. But the onus is on them, not mgmt., to make that effort.
- Dayshine 7y ago
  They're withdrawing subsidies for resellers of their products. It's pretty hard to see how that is them extinguishing competition... Isn't subsiding by a major market power generally seen as an anticompetitive action?
  - galaxyLogic 7y ago
    I believe that businesses are allowed to give special deals to customers of their choice as long as they don't discriminate based on race color religion sexual preference, maybe age? It's really just a question if it is in MS interest to make sure their "partners" always use MS products instead of those of the competition. It's not a question of ethics. I think the term is "price differentiation". Some people get it cheaper.
  - jlgaddis 7y ago
    > They're withdrawing subsidies for resellers of their products. It's pretty hard to see how that is them extinguishing competition... Microsoft was going to yank internal use rights from the "partners". For many (most?) of them, this is the primary reason they remain partners. Without this benefit, lots of them will choose not to remain partners. Many companies will only work with Microsoft partners. Lots of them would work directly with Microsoft if that were an option (as some are speculating it will soon be). So there will be a lot less "partners" standing in between Microsoft and their customers. Then, at some point, Microsoft will start working directly with these customers, cutting out the middleman, sucking them into their subscription models (which will be expanding), have more insight into their operations, and will be better able to track (and enforce) licensing. To put it a simpler way, Microsoft is simply going to cut out the middleman -- the partners -- and take their customers -- and revenue -- away from them.
    - zubspace 7y ago
      There are many partners which are not simple resellers. Dev shops and integration businesses which do a lot of customer oriented work, which Microsoft itself could never reliably take over. Those partners profit from the MPN licenses by using them internally and on the other hand get in touch with new tech from Microsoft, which they could maybe use in one or another way. Losing them would be really bad for Microsoft, because they are at the forefront installing, integrating and extending the Microsoft stack into their customer base. Think of deals in the government or education sector. Microsoft should not put those businesses and resellers into the same basket. But they are right now and every change affects them both. Hard to get out of that program which has been running since decades...
- manigandham 7y ago
  Who exactly are they "extinguishing"?

dang 7y ago

The earlier thread: https://news.ycombinator.com/item?id=20389077 https://news.ycombinator.com/item?id=20389077

zubspace 7y ago

This is so strange to observe from the outside. The statements of Gavriella Schuster, when that whole debacle started, provided some insight into the partner program: "We can't afford to run every single partner's organisation for free anymore, because it's not free" "Put it this way, when customers are paying for services they turn them off very quickly. When we give it away for free the partners leave these services on. While my budget has to pay internally for this." "We have given partners a year to figure this out. I just can't make it free anymore." "If we hadn't had such an influx of new partners and everyone's usage hadn't been this high, then we may not have been in this situation" The article, where these quotes are from, talks of 7000 new partners each month [1]. So, on one hand, Microsoft clearly has a communication problem. The proposed changes slipped in without a clear, official statement and wasn't the backlash obvious? Why didn't anyone stop Schuster from doing this? On the other hand, how can they continue like this? They lose huge amounts of money because partners get a ton of licenses for free. So what's their plan? Unfortunately the announcement is as shallow as possible. Hard to regain trust this way. But many development shops, as the one I'm in, are so dependent on Microsoft and the partner program, that switching is nearly impossible... [1] https://www.dailytimes.live/business/microsoft-cuts-partner-benefit-surprise-move-88246844 https://www.dailytimes.live/business/microsoft-cuts-partner-...

drawkbox 7y ago
This highlights why budgets and metrics don't always tell the full picture. The manager/bizdev/MBA on the team sees a loss to their budget. To CYA they want to fix that budget issue, but they are only looking at the short term cost not the long term. The "I just can't make it free anymore." statement shows this with the "I" word, only thinking of their short term focused budget. But the long term point is this: > But many development shops, as the one I'm in, are so dependent on Microsoft and the partner program, that switching is nearly impossible... Most Microsoft partners have high switching costs, higher because they get lots of it free, so developers/network/technology teams are locked into Microsoft due to this. These policies helped build the Microsoft product adoption. Just as anything that is free, some of those free licenses led to pay licenses, and some wouldn't be used at all without free licenses. I have seen this with many Microsoft products and it is really how products like Windows and Photoshop came to such widespread use, people got it free or pirated it and eventually the purchases came. It appears this manger/product lead is more focused on the business metrics of short term and right now rather than historical policies that locked lots of teams/partners to Microsoft. This plays out over and over at organizations: - If the engineers/designers/developers/product people win, they keep the long term programs and research and development going that builds better products to bring people in making marketing and business multipliers easier. - If bizdev/managers/MBAs win, they cut all that out because short term it looks better to them. To them the 'open' mode [2] and research and development or free programs hit the immediate bottom line but it may not be clear how much they are responsible for the products that are marketable. Much of that is customer adoption due to good policies around engineering/product/design that these types start to strip away because they don't have a clear ROI but may in fact be a big reason for success. A bit of the Ballmer era tried to come back from the dead, they put it under the lake like Jason Voorhees from Friday the 13th for a while again. This is the age old battle in innovative/technology/product companies. Looks like the engineers/product/developer side won this round which is a good sign for Microsoft. Bizdev/MBA/manager/marketing/metric focused companies kill the long term product lifeline and the 'open' mode every single time [2][3] This is also mentioned in 'How Software Companies Die' which is almost law now: > "The environment that nurtures creative programmers kills management and marketing types - and vice versa." [1] I wonder when this knowledge will make it back to HBS MBA business school, there are plenty of examples in the market. Business and marketing should be the multiplier of your value, they are not the value creators. The product / engineering / creative / research / development / design departments and the people you have are the value creators and customers are also a stakeholder that must be considered long term not just short term. Product development has two sides, value creation (engineering/design/product) and value extraction (MBA/bizdev/marketing). It is a balance, when one side has too much power, it kills the product but much faster on the value extraction side. In most cases, lack of power in the value creation side ends the company or leads to stagnation because all the value and grace is extracted. [1] http://www.call-with-current-continuation.org/rants/how-companies-die.txt http://www.call-with-current-continuation.org/rants/how-comp... [2] https://genius.com/John-cleese-lecture-on-creativity-annotated https://genius.com/John-cleese-lecture-on-creativity-annotat... [3] https://news.ycombinator.com/item?id=20353914 https://news.ycombinator.com/item?id=20353914

FooHentai 7y ago

My previous employer did a lot of cloud migration/integration work for clients. They erred in their sales strategy where cloud became 'the only thing we'll talk to clients about'. In doing so, they not only dried up their sales pipeline, but lost most of their existing customer base as well. This (attempted) change to the partner internal-use licensing feels like it's cut from the same cloth - The existence of IUR didn't seem to be an issue previously and the need to change it now doesn't pass the sniff test. Probably a better play here would be to give partners a choice - Each year you can have the IUR OR equivalent entitlements in Azure/0365. That gives partners a transition path, within a construct where the deal can be sweetened/tweaked as necessary, and doesn't make the mistake of brow-beating anyone towards cloud adoption (which tends to have the opposite effect).