Published in News

Microsoft sees revolt against its licensing scheme

by on27 April 2022


Partners push back against the scheme

Software King of the World Microsoft said that it is having problems selling its new "new commerce experience" licensing scheme to partners.

In its Q3 2022 earnings, Vole noted that the transition to the scheme was “slower than expected” which is Vole speak for “partners are treating it as if it were a rabid dog and not touching it with a barge pole.”

Vole reported glowing numbers for its Q3 with revenue reaching $49.4 billion, an 18 per cent year on year jump. Cloud revenue jumped 26 per cent to reach $19.1 billion, with Azure and other cloud services growing 46 per cent.

However, the numbers would have been a lot better if it had not come up with this dumb idea for a partner scheme. Analyst firm Canalys said the new scheme was more beneficial to Microsoft than anyone else and would see significant price rises. Canalys said the new scheme "has drawn significant ire from partners around the world."

Those partners appear are not using the new scheme – even though it became Microsoft's default offering early in 2022.

The licensing scheme, announced in September 2020, was supposed to be "a simplified approach and greater flexibility in how customers purchase software licenses in a way that's easy to understand, that directly improves licensing asset management, and with predictable costs."

The scheme de-emphasised sales of perpetual licenses in favour of what Microsoft claimed was a "new commerce experience" that focuses on fixed-term subscriptions to cloudy products and makes paying month-to-month more expensive.

However, Volish partners feared it could leave them on the hook if customers failed to pay up.

Dynamics grew 22 per cent. Office's commercial incarnation increased revenue by 12 points, one ahead of Office's consumer services. LinkedIn grew by 34 per cent. Windows surfed the PC boom to record 11 per cent growth from sales to computer-makers, while commercial Windows products added 14 per cent to Q3 2021's revenue haul.

The company remains wildly profitable. Net income was $16.7 billion – an eight per cent improvement.

 

Last modified on 27 April 2022
Rate this item
(1 Vote)

Read more about: