Microsoft LAR changes due in January

Microsoft has halved the number of hoops that LARs must jump through to hit rebates targets under changes that will see partners earn less on volume licensing deals particularly in the public sector but more from higher value apps. As exclusively revealed by MicroScopein the summer, the UK operatio

Microsoft has halved the number of hoops that LARs must jump through to hit rebates targets under changes that will see partners earn less on volume licensing deals particularly in the public sector but more from higher value apps.

As exclusively revealed by MicroScope in the summer, the UK operation delayed making changes to the LAR scheme initially planned for October until January, to give partners more time to adjust their business model to reflect the new metrics.

The restructured programme is due to come into effect on 1 January said Simon Aldous, UK partner group manager at Microsoft. "We are simplifying the scheme, halving the number of metrics on which rebates are paid."

He refused to provide additional details at this point but said they were in line with the restructure of commercial distributors' rebates made earlier this year, built around reach, frequency, yield and higher value product categories.

The current rebates on higher value categories including security, Sharepoint and the server management suite will more than double, sources claim, but generic LAR rebates in the public sector will fall from 2.5% to 1.5%

Aldous said funding would remain unchanged but it would be paid differently. "The only way LARs will see a negative impact is if they only transact licenses with Government, if it's a pure transactional business they could see rebates lowered."

Steve Reynolds, managing director at LAR Civica - a big player in the Government space - said it was "getting to grips" with the changes and noted some interesting developments including higher rebates for forecasting, and category products but would make no further comment.

The only area Computacenter expects to see a decline rebate is in public sector contracts said Ian Waring, director of merchandising and operations for the software business unit.

But the net impact will be neutral as it the corporate giant was "hitting other performance criteria" he said.

The changes had worked well for Softcat managing director Martin Hellawell, who said it was well geared up for the changes which provided an incentive to up-sell.

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