back to article Microsoft partners balk at new licensing scheme, dent growth

Microsoft's partners appear to have pushed back against Redmond's "new commerce experience" licensing scheme, as the software giant noted a slower-than-expected transition to the arrangement in its Q3 2022 earnings. The company today announced typically robust results: Q3 revenue reached $49.4 billion, an 18 per cent year on …

  1. Kevin Johnston

    Let me see now

    Do I want to pay a one of cost of $1,000 per license and then have a small support cost every year of, say, $20 per license or would I rather pay a much smaller $80 per month for the rest of my life?

    If you can force the bean counters to do some real accounting then a perpetual license is a no-brainer as if revenue gets tight you can stop the annual support and just stay on the version you have got used to using rather than pay an escalating support cost which means the software is continually updating and you never know where the button has moved to. Worst case, if revenues get tight you lose the software and possibly your data too if it was sat in the cloud

    1. Anonymous Coward
      Anonymous Coward

      Re: Let me see now

      It never works out like that though does it? Microsoft are twats for withholding features and up-selling.

      Here's how all cloud purchasing decisions go:

      You look at the Office 365 stuff and you think "£4:50 per user? That's not bad".

      Within hours you realise you need the £8 package.

      Your company or IT needs grow a little bit (maybe a month or two) and suddenly you need Business Standard, which is £9.40 per user.

      You start to look into things, and realise that the best features (especially security features) are hidden in the Premium package, so you throw down £16.60 per user.

      Now you've started down the path of securing your data, you suddenly need Mobility and Security, that's another £12.40.

      Wait, what's that, I also need Defender for Endpoint? That's another £4.

      Wow. I can plug all this stuff into a SIEM solution? Ok, that's another £x per month for log analytics and Sentinel.

      Now you've started down the cloud route, you may as well move your other services there, now you have Azure VMs, and SQL instances, and yada yada yada, and your £4.50 per user has turned into £100 per user.

      I'm not knocking cloud (I work with it daily). But the costs of moving to cloud are never fully appreciated until you're living it (and by then, you've invested so much time and effort into the shift that you can't pull out).

      1. DJV Silver badge

        @ac

        Yep, the old drug-dealer methodology.

        1. X5-332960073452
          Megaphone

          Re: @ac

          I think it's more like car sales, add the extras to get a decent vehicle, especially Volkswagen.

      2. Anonymous Coward
        Anonymous Coward

        Re: Let me see now

        Withholding features? Huh? You mean offering a product at a lower price because some users only need those features? There are comparison charts that clearly show what you do and don’t get for you £4.50 a month.

    2. 43300

      Re: Let me see now

      Microsoft have been working on that one - e.g. Azure Stack HCI where you pay monthly licensing costs to run your own VMs on your own hardware, in addition to paying for perpetual or monthly licenses for any Windows Server OSs on the VMs!

    3. Twanky Silver badge
      Childcatcher

      Re: Let me see now

      IIRC with MS, annual support costs are typically 25-33% of the perpetual licence costs - not 2%. We then get 'support' and upgrade 'rights' when a new version comes out - though usually they'll move useful features to the next grade up so you'll have to upgrade from 'pro' to 'pro-plus' or some such bollocks.

      Whatever happens they'll stick us for more money each year until we get off the damn treadmill.

      Their brilliant licencing move was the 'no-downgrade' rule - so we can't buy a perpetual licence for a newer version for new staff and then run the (less capable) older version to remain compatible with colleagues.

      icon: Would you like a sweetie?

    4. bombastic bob Silver badge
      Unhappy

      Re: Let me see now

      Related, from the article: "some clearly struggle to see the benefits"

      It is hard to see "benefits" in a monthly subscription fee (rent) for the rest of your life when you used to be able to OWN things...

      "The Emperor's clothes are WONDERFUL!'" they say. And then they question why WE cannot see them, too...

  2. Anonymous Coward
    Anonymous Coward

    Ransom

    The annoying phrases are the ones like: "This change is super good for both the partners, the customers, and Microsoft long term" While at the same time seeing the $16billion profits.

    This is not "Super plus good" for the resellers. On the M365 level it is a 20% price hike per month OR pay a year up front. I cannot take a risk for a company to pay me monthly and then default on a contract.

    It is the stitching up of the reseller is the most unbelievable part. If a client walked out in the middle of an annual package, why is it the Reseller who then has to pay that bill? Why do Microsoft want to penalise us resellers when our clients go bankrupt?

    1. Anonymous Coward
      Anonymous Coward

      Re: Ransom

      I'm a Microsoft Partner too, but I don't agree with your perspective.

      It's up to you to credit check your customers. If a customer has paid up front for an annual contract, then where's the risk? Ensure your terms and conditions are such that you get paid in advance of you getting charged by Microsoft. If they don't like your T&Cs, they can buy direct from Microsoft.

      Most partners make money from services (consultancy, support, training) and their own solutions - not licences for standard products. You'd have to shift a lot of product to get close to match rates for services.

      1. Anonymous Coward
        Anonymous Coward

        Re: Ransom

        Yeah, I agree with what you say. But it is the fun conversations I have coming up with a number of my clients where it is "20% increase to stay on monthly, or a year up front please".

  3. Zippy´s Sausage Factory
    Flame

    Microsoft's long game seems to be to transition everybody to monthly payments for everything and try to get rid of perpetual licences, the channel, resellers, the lot. Anyone who can take a cut of their revenue they now seem to see as being a parasite sucking the cash from their very wallet...

    1. VoiceOfTruth

      This strategy works for Adobe. It's greedy. But it works.

      1. Marty McFly Silver badge
        Facepalm

        Does it work for Adobe?

        CS6 still does everything I need to do. Gotta jack around with it a bit to get it to install on Win10, but works fine otherwise.

    2. Youngone Silver badge

      The vast corporation I work for has bought into it lock stock and barrel too.

      There was a point when I tried to fight back because I think everything in the cloud is a bad idea for a big company, but I have realised that I don't really care if it all turns to poo, as it is not my money and no-one is listening anyway.

      I will just do my best to mitigate the pain for my users.

  4. anthonyhegedus Silver badge

    I don't care whether it's monthly payments or fixed-cost. Monthly payments means that you're paying for something. It's good for us because it makes us money selling to clients.

    HOWEVER: ""a simplified approach and greater flexibility in how you purchase software licenses in a way that's easy to understand, that directly improves licensing asset management, and with predictable costs."" and "super good..." is actually a total and utter lie.

    OK, prices go up - fine, I suppose they have to at some point. But now we find that if take over service from another support/MSP, we cannot just take over the MS licences. We have to wait till the annual contracts expire, which could be all at different times. This means that the losing company has to keep charging, but they can't provide support - because they're the losing provider. So we have to provide support, but we can't charge till the contract's up. It's an unholy mess.

    They keep moving the goalposts. I honestly do not understand when this is all happening, what happens to existing contracts and what the pricing actually is. Never mind that we've got some 400-odd endpoints out there, each one with some monthly licence attached.

    Our suppliers don't understand it either.

  5. Pirate Dave Silver badge
    Pirate

    "This change is super good for both the partners, the customers, and Microsoft long term. So there's execution ahead but we want to do this because it benefits everybody, and who doesn't like a little forced anal-rape every now and then?."

    FTFY

    1. Peter D Bronze badge

      That escalated quickly.

      1. Pirate Dave Silver badge

        Nah, not really. Microsoft comes at it with the mindset that you're already screwed and have scant alternatives, so they're free to do as they wish. Dally around or get down to business, their call, not yours.

  6. Cinderellaphant

    Quit whining

    ... and FOSS up, it’s the only leverage right now to keep prices in check. Almost every good paid app has an equally good FOSS alternative if only people quit being lazy and put effort into Learning something new.

  7. Twanky Silver badge

    Both?

    This change is super good for both the partners, the customers, and Microsoft long term

    Both? I count three supposed beneficiaries. Is that what makes it 'super good'?

    1. badflorist

      Re: Both?

      They say _____ things come in 3s.

  8. cb7

    Prices go up, yet basic functions still have annoying bugs/limitations.

    Here's a couple:

    1. Standard Windows File Open dialog box after eg Ctrl-O in Excel to bring it up, start typing a filename, realise you're in the wrong folder, so navigate to the correct folder. Typing the filename in the filename box doesn't show anything from the current folder until you wipe out what you'd already typed and start again.

    2. Right-click a file in File Explorer and choose Sent to Mail Recipient. This brings up the Compose email window as a modal one. This means no other interaction with Outlook until you send the email or close it (good look finding it again in the latter case if you have multiple mailboxes). This can be severely annoying if you need to refer to another email or interact with Outlook in some other way.

    I could go on, but I'm sure everyone here has found long standing issues that never get a look in despite there being New Shiny turds emerging with forced regularity.

    1. anthonyhegedus Silver badge

      It's like "the emperor's new clothes". Microsoft do have a track record for producing mostly shit software. It just happens to work, but there's a SERIOUS quality issue. They're so wrapped up in working out how to pull every penny out of users that they forget basic functionality issues. Like why is Microsoft 365 admin so fucking complicated? So they can attach a value to certificates and qualifications.

      We're all just so used to over-complex, buggy, unintuitive crap forced our way. I cannot believe they used any focus groups whatsoever to design Windows 8 and then incorporate that in server software, for example.

      I could go on, but yes, the software looks OK for the most part on the outside but inside it's a tangled mess of legacy code and bugs

    2. yetanotheraoc Silver badge

      what I do

      "until you send the email or close it"

      If I click Close and Yes to save changes, I can then find the email in Drafts and work on it in non-modal mode. But Right-click | Send to | Mail Recipient is pretty crap. Why not just Right-click | Copy , followed by New Email | Paste. It's one more click, but at least the subject isn't stupid.

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