Cruel Microsoft will drive us into arms of iOS, Android, warn resellers

Microsoft has axed rebates paid to its distribution channel partners that flog Redmond's server and communications software.

The Solutions Incentive Programme, which pays out a reward for securing sales, was announced to the Microsoft Partner Network in October 2011, giving those that are certified specialists the ability to register deals and earn a hefty rebate on technology deemed strategic.

But sources today told The Channel that from 1 March, the 20 per cent rebate for selling SQL Standard edition and client access licences (CALs) was pulled - and cash will only paid out on Premium Enterprise and Business Intelligence editions.

The same change was applied to the Standalone Lync Enterprise and CALs; backend margin will be paid out on Lync Plus CAL and Lync Server instead. In addition, Microsoft said it will only stump up paybacks on Windows Enterprise when it is sold with a Microsoft Desktop Optimisation package (MDOP), industry insiders told us.

"This is another classic case of Microsoft moving the goal posts. A lot people sell SQL Standard and this will hurt," said one Microsoft partner that spoke on condition of anonymity.

The Solutions Incentive Programme (SIP) was designed to "reward technical engagement" but by reducing the products applicable for rebates, Microsoft is "providing additional reasons to sell competitor products", warned another source.

"With the inexorable rise of iOS and Chrome and Android, Microsoft is unbelievably naive in taking money out of the channel," he said. "This is further erosion of profitability of our Microsoft business which is taking an unending journey to zero margin."

To qualify for SIP, a channel partner previously needed to register a deal and hold the requisite competency certification, but Microsoft has added a proof of execution concept.

"Microsoft has made SIP significantly more difficult to earn," said the channel partner.

Microsoft sent a statement to us:

"In just three years, we’ve expanded our channel incentives programmes to include thousands of partners that can earn incentives covering on premises, cloud and services.

"We fine-tune our programmes on a quarterly basis based on partner feedback and market opportunities. As the pace of change in the IT market continues to accelerate we remain committed to providing a sustainable revenue stream for our partners and to deliver continued value to our customers." ®