Mixed reaction from partners after Microsoft decision to end internal use rights

Update: Microsoft announced on July 12 that it would backtrack on plans to remove internal use rights for now.

Microsoft quietly announced on July 5 a decision to end its policy of granting internal user rights (IUR) to its partners as part of the Microsoft Action Pack, an offering used by many smaller partners to allow them to run a range of Microsoft systems, both on premises and in the cloud (including Dynamics 365 Customer Engagement) at no cost.

Microsoft also explained that licenses for partners will be tied to specific competencies:

Beginning October 1, 2019, the product licenses included with competencies will be specific to the competency you attain. Please review the benefits you will receive with your competency in Partner Center at time of purchase. Additional licenses can be purchased through commercial licensing to run your business.

In a statement to RCPMag, Microsoft explained that the Action Pack remains available for purchase by partners, and that the change is in line with other updates announced in May.

The announcement has generated a mix of reactions from the channel as partners size up the move. 

Microsoft MVP and perennial channel watcher Steve Mordue evaluated the news as another indicator of the company's current priorities. Along with other changes like increases in competency staffing requirements, fees for support, and ISV revenue sharing, he sees the impending loss of IUR as part of Microsoft's effort to reshape the channel.

It seems that Microsoft is struggling with how to achieve a new goal: dramatically increase the “Quality” of partners in their channel. One part of reaching that goal, is reducing the “Quantity”.

And he continued: