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What It Means for Microsoft To 'Double Investment' in IUR

Internal Use Rights (IUR) have consistently been one of the most valuable elements of the Microsoft Partner Network (MPN) for partners, and Microsoft is doubling down on the benefit in the fiscal year that just started.

"We're providing more access to free software and services via Internal Use Rights (IUR). In fact, we're doubling our investment in free software, cloud services, and platforms for our partners over the next year, giving you the tools needed to build innovative solutions on top of Microsoft technologies," Microsoft's top channel executive, Gavriella Schuster, said last week in a blog post from the Microsoft Worldwide Partner Conference (WPC).

Schuster's brief description in the blog post only scratched the surface of the expansion of IUR that began on July 1.

When the benefit consists of a kind of "funny money" -- free licenses and subscriptions from the company that makes them for the internal use of their partners -- what does doubling the investment mean? In this case, it appears to be more than an internal accounting trick for crediting licenses that are given to partners as part of their Gold Competency, Silver Competency or Action Pack subscription fees.

"Our investments involve adding new cloud-related products to the program, building the new IUR platform in the Partner Center and improving the partner experience and technology so partners can utilize IUR easier and better," said a Microsoft spokesperson in a follow-up interview by e-mail.

Examples of new cloud-related products Microsoft plans to launch into the IUR program for select competency partners include a new Dynamics CRM Online Enterprise, Dynamics Employee Self Service, Dynamics CRM Online non-production instances, and Skype for Business PSTN Conferencing.

The IUR seat limits for Gold, Silver and the Action Pack will not change. The original MPN structure called for Gold to provide enough licenses to support a 100-employee partner organization, for Silver to support a 25-employee partner, and for Action Pack to support a 10-user partner.

Schuster's focus during her mainstage keynote at WPC and in an interview with RCP prior to the keynote was on Azure IUR, which are measured differently than other IUR because a seats-based approach doesn't fit. Azure-based IUR, a staple of the Cloud Platform competency, are meted out by Azure resource consumption.

In the just-completed Microsoft FY16, Cloud Platform partners with a Silver Competency got $6,000/year worth of Azure bulk credits and Gold Competency got $12,000. That was twice the amount of bulk credits that Cloud Platform partners got in FY15.

"I want to help you build more robust and innovative cloud solutions. So this year, we are doubling our Cloud Platform Internal Use Rights for you," Schuster said during her keynote at WPC last week.  However, the spokesperson confirmed that those caps aren't changing from the $6,000 Silver/$12,000 Gold thresholds, which took effect midway through this last fiscal year. According to the spokesperson, Schuster's keynote comments referred to the broader doubling of investments in IUR, not to any change in the Cloud Platform competency benefits.

Even if details of the IUR expansion are still in flux, it's clear that Microsoft continues to recognize the strategic value to partners and to itself of IUR. Partners save on their internal IT infrastructure, get all their employees familiar with products across the stack that they might not otherwise use or be able to afford, get the ability to demo solutions, and are able to more affordably perform internal development and testing. The end result, according to Schuster's blog, is a win-win for Microsoft and its partners: "When partners use IURs, their deals are approximately three times larger."

In another IU development at WPC, SkyKick Co-CEO and Co-Founder Evan Richman said Microsoft and SkyKick will continue offering two of SkyKick's cloud-related products to partners through the Microsoft IUR benefit. The programs allow partners to use the SkyKick Migration Suite to move up to 500 seats of their business to Office 365 and grant them a perpetual use license for SkyKick Cloud Backup, which backs up Office 365 and OneDrive data to the Azure cloud.

Posted by Scott Bekker on July 21, 2016