Gavriella Schuster, corporate vice president, Microsoft (Microsoft Photo)

Gavriella Schuster’s first job at Microsoft was building a global solution provider program, helping independent tech consultants and developers adapt and augment the company’s software for use by their business customers.

One of the key benefits Microsoft came up with was “internal use rights,” which grant those partners licenses to software for their own day-to-day use — giving them valuable experience deploying and running the technology, while also saving them money on software.

That was in 1995, back when software came on a disc and granting additional licenses was mostly a matter of changing the paperwork.

Nearly 25 years later, as the corporate vice president in charge of Microsoft’s One Commercial Partner Organization, Schuster was surprised by the long-term implications of that decision.

Microsoft’s costs for delivering those internal use rights had skyrocketed, due to the growing use of cloud services by partners, the resources required for Microsoft to deliver those services on-demand from the cloud, and the growing size of Microsoft’s partner program.

So how big are the costs, exactly?

“Really big,” Schuster said in response to GeekWire’s question during a briefing with reporters on the Microsoft campus in Redmond this week. “It really overran my budget this year. When I started to do the calculations, I was like, ‘Wow, look at this.’ And so I had to cut back on things that I was going to invest in … so that I could pay both bills.”

Schuster didn’t provide a number, but Mary Jo Foley of ZDNet reported on Thursday that they are in the range of $200 million annually, citing a person inside the company familiar with the numbers.

As she crunched the numbers, Schuster said, she came to the difficult conclusion that Microsoft would need to do away with internal use rights. While the cost might …read more

Source:: GeekWire


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