Many partners rely on Office incentive fees to train their staff on cloud skills and compensation models. If that's the case, cutting the amount of money partners get from selling Microsoft cloud services is an odd way to go about it. Microsoft has been urging partners to embrace the cloud for the past few years.
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At least one Microsoft licensing expert believes the unprecedented fee cuts, which come in the middle of the company's fiscal year, are the first step in what will be a steady erosion of partner sales commissions on Microsoft cloud services. For an Office E1 deal of similar size, partner incentive fees are set to drop 40 percent, according to the source. One Microsoft partner told CRN his incentive fees for Office will drop more than 50 percent after the changes go into effect. None of the half-dozen or so partners CRN interviewed for this story would speak on the record for fear of damaging their relationships with Microsoft.Ī spokesperson for Microsoft addressed some, but not all, of the questions CRN asked about the Office fee cuts, and declined to make an executive available to discuss the matter.Īll of the partners CRN interviewed are questioning the wisdom of Microsoft cutting back on Office partner fees at a time when competition in the cloud services market is intensifying. The fee cuts mean partners will have less incentive to tout Microsoft cloud services over Google's, the source said. One partner told CRN he's planning to change his business to be less dependent on Microsoft partner fees. Some partners are so angry about having their fees cut that they're prepared to sell competing products, like Google Apps. In return, partners get a one-time payment based on the full-year value of each seat when the customer deploys the services.
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Microsoft is preparing to slash the fees partners get from its Online Services Advisor Incentives program, and many partners are furious about the likelihood of making less money selling OfficeExchange Online and other cloud services. Not surprisingly, partners are up in arms about the move. Microsoft later this month will slash the incentive fees it pays to partners that sell Office and other cloud services.