Microsoft has backed down, and will allow partners to maintain internal user rights (IUR) for Microsoft Office 365, Azure cloud and other software services, Channel Chief Gavriella Schuster confirmed this morning.

For roughly a week, some Microsoft partners complained about planned program changes that would have eliminated various software discounts, support options and other perks. At first, Microsoft dug in and insisted that the partner program perks were too expensive to maintain.

But today, Schuster reversed course. In a blog she stated:

“Given your feedback, we have made the decision to roll back all planned changes related to internal use rights and competency timelines that were announced earlier this month. This means you will experience no material changes this coming fiscal year, and you will not be subject to reduced IUR licenses or increased costs related to those licenses next July as previously announced.”

The move essentially ends a partner feud with Microsoft ahead of the company’s Inspire 2019 conference next week in Las Vegas.

Microsoft Partner Program: Budget Gap?

Still, Schuster’s change of heart raises a key question: How can the partner team afford to make this change of course when the company previously said it’s too expensive to continue IUR partner program perks?

Over the past week, after all, Microsoft leaders have repeatedly stated that the perks caused partner program budget challenges. We’ll be poking around to see if or how Schuster managed to close the budget gap, or whether Microsoft simply decided to fully eat the costs in return for partner loyalty.