Microsoft, after an outcry by many of its reseller partners, now says it will not charge them for internal use of the company's products and services
Mary Jo Foley / ZDNet :
Context & Ripple Effects
Microsoft's partner channel has become a recurring pressure point. In late 2021 it told partners enterprise customers would pay 20% more for Office subscriptions without an annual commitment, and through 2022 it was forced to unwind cloud licensing terms that penalized rivals' clouds — first relaxing European rules after competitor complaints, then amending them further under EU antitrust scrutiny.
First-order effects
- Reseller partners keep free internal use of Microsoft's products and services, avoiding a new cost line that would have eaten into already-thin reseller margins.
- Microsoft avoids an open rift with the channel at exactly the moment its own plans point toward relying on third-party firms for SMB software sales.
Second-order effects
- The retreat reinforces a pattern partners can exploit: Microsoft has now reversed course twice under vocal opposition — on internal-use fees here and on European cloud licensing rules after rival complaints — raising the expected payoff of organized pushback against future term changes.
- Competing vendors courting the same resellers gain a talking point about Microsoft's willingness to tax the channel, sharpening competition for partner mindshare.
Third-order effects
- If the pattern holds, Microsoft's channel economics become a negotiated battleground rather than unilaterally set terms, with partner outcries functioning as a de facto check on licensing changes ahead of formal regulatory scrutiny.
- The episode sits alongside Microsoft's reported shift of SMB selling to third-party firms, suggesting the company is restructuring distribution while learning that squeezing the intermediaries it depends on carries real backlash cost.
The trend: Microsoft keeps testing tighter monetization of its partner and licensing terms, and keeps retreating when partners or rivals organize against it.