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Microsoft lays financial bear trap for cloud sceptics

UK.gov pays more for on-prem desktop wares, channel makes less from them

Microsoft’s 'cloud first' mantra has teeth and it is crunching those gnashers down on the amount of money that old-world channel types can make from classic on-premise licensing.

Financial rewards are the best way to shape the behaviour of salespeople and the company bosses that govern them – a path well trodden by Microsoft HQ.

Cloud product sales account for 49 per cent of the total pot of fees available to channel types in Microsoft’s fiscal ’16, up from 32 per cent in the recently closed financial year.

“Our cloud focus is clear and increasing every year,” stated Microsoft on a slide deck that one channel partner snapped and sent to us.

The fluffy white stuff accounted for 19 per cent of the total compensation in fiscal ’14 and ten per cent in the year before, so the latest overhaul should not come as a surprise.

“Microsoft has allocated nearly half of it to those selling cloud. All channel partners will say they sell cloud but for some the volumes are not yet huge,” said one Microsoft channel biz.

Some channelites warned that not all customers are yet ready to move to the cloud for various reasons, so they might be hit in the pocket.

But these are not reading Redmond’s script closely. It reads: start shifting your business to the cloud and go hard.

Some customers are also facing the same attitude from Microsoft: as exclusively revealed by us, UK public sector clients that refuse to migrate are seeing on-premise desktop software prices soar. ®

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