You Can't Sell Microsoft Licensing to Yourself and What to Do Instead

Did you know that selling yourself licensing puts you out of compliance with Microsoft? It’s true. Being out of compliance is not somewhere you want to be, in fact, your partner status could come under heavy scrutiny.

As a Microsoft Partner, you might be surprised to learn that you can’t use your own CSP account to license Microsoft products for your business. It feels like it should be allowed. After all, you are a Microsoft Partner and you sell these services, but Microsoft has made it very clear that this is not permitted. In their official documentation, they state:

“Partners in the CSP program aren't allowed to sell Microsoft or third-party offers to themselves (as end-customers) or to their affiliate organizations (as end-customers).” Reference: Sample Scenario 5

As a result, Partners have started getting self-licensing violations that, left uncorrected, could have devastating consequences for your business. Luckily, there is a benefit that can immediately help: Internal Use-Rights.

Use your Internal Use Rights (IUR) Benefits Instead

So, what should you do instead of selling yourself licensing? Simple – use your Microsoft Internal Use Rights (IUR). These benefits are specifically set up for partners like you. Microsoft's IUR benefits allow partners to access various software licenses for internal use and provide a lot more coverage than many partners expect. This includes licenses for operating systems, desktops, and server software such as Microsoft 365, Azure credits, and Microsoft Dynamics, among others.

Why it Pays to be a Microsoft Partner

Your IUR benefits include cloud services through Azure. You might even discover a new technology that’s helpful for your business and could save – or even make – your company money. For instance, if you’re still not using the Cloud and AI to help your company automate and streamline business operations, you may be missing out on cost savings or new revenue streams such as new services you could offer. But the best benefit of using your IUR is that you’ll be getting your products and services with your Microsoft partnership. In other words, it pays to be part of the Microsoft partner ecosystem.

Familiarize and Pilot the Technology – Then Take it to Your Clients

If you’re still not sure how the IUR benefits can help you, take a look at this example: You’re a security engineer at your partner company, and you can get free Azure credits to help you experiment and see how Azure could help your business – and eventually help your clients’ businesses. You take a little time to play around with Azure and find that it could strengthen your security at several points in your infrastructure. Now you have the expertise to not only use Azure in your partner business, but also to let your clients know how it helped you and, potentially, how it could help them.

Knowing how to use Microsoft products in your own business only makes you more capable of selling it. It also makes you more trustworthy since your clients will always pay attention when you’re talking about a product or service that you used to cut risk, improve security, or save money. First-hand experience tells the story best. And if you need a little assistance, The Partner Masters can lend a hand. With decades of Microsoft experience, our consultants understand how to implement these technologies and help users embrace the changes that come with a rollout of a new product.

What to Do if You’ve Maxed Out Your IURs

Before buying anything, it is worth confirming your team is fully leveraging these IUR licenses. If you’ve used every last seat, the next best step is to purchase licenses directly through Microsoft using your corporate tenant. This method means paying the full commercial price, but it keeps you in compliance.

Another option, although difficult to find, partners choosing to work with another CSP provider they trust and who doesn’t compete with their business.

That’s exactly where The Partner Masters fits in. We are a CSP Indirect Reseller, and we work specifically with other Microsoft Partners to help them stay compliant and optimize their licensing. We don’t sell services to end customers, and we are not here to compete with our peers. Our job is to be your behind-the-scenes partner with the goal to help you get the right licenses and uncover savings that often go unnoticed.

When we work with Microsoft Partners on resolving self-licensing issues, we frequently discover more than just the licensing problem. We often find that partners are sitting on unused benefits, untapped incentives, and cost-saving opportunities that can add up to thousands or even hundreds of thousands of dollars, depending on the size of the business. This goes beyond run-of-the-mill CSP licensing, it’s about creating a better strategy for how your organization engages with Microsoft, both technically and financially.

Next Steps for Partners

If you've received a self-licensing violation notice, or if you just want peace of mind that your licensing model is compliant and optimized, we are here to help. Still looking for licensing or have more questions? The Partner Masters can help — get in touch today. We would be happy to talk to you more about how to best use your IURs in a way that works for you. We also conduct a monthly webinar that highlights the challenges Microsoft Partners face and provides solutions for them. We discussed the IUR changes in February and you can watch the entire replay anytime.