Microsoft needs to pull its novation socks up!

23 October 2012
4 minute read

Microsoft needs to pull its novation socks up!

23 October 2012
4 minute read

I was shocked by the recent experiences of an ITAM review reader when trying to novate Microsoft licenses from one company to another.

Microsoft Contract Novation

An artist’s impression of the Microsoft Contract Novation department

Round 1

ITAM Review reader fills in the Microsoft novation form. The form requires the selection of a tick box explaining the reason for the novation as well as a list, line item by line item, of the licenses to be novated.

It is not possible to specify ‘all licenses on XYZ Agreement and 123 Enrolment’. It is a time consuming, manual task, with significant potential to leave some licenses off the novation form.

Both transferor and transferee companies sign the form and it goes to Microsoft. The Account Team spot that the novation will be rejected because the wrong box is ticked.

Round 2

A new form is completed following the instructions of the Account Management Team, both parties again sign the form and send it to Microsoft Operations in Ireland by recorded delivery.

A scan of the document is emailed to the Account Team who forward it to MS Operations for good measure.
A week or two later the Account Manager receives notification that the novation has been actioned on the basis of the scanned copy.

A few weeks later my reader notes that she has not received a signed original copy of the Novation form from Microsoft and asks the Account Manager to follow up….

Account Manager:

“It’s in progress, but it’s not really needed as they have actioned the novation in the system”.

My reader has been through several Microsoft Audits, and has learned the hard way that in Europe nothing is legally binding on Microsoft unless it is executed by Microsoft Operations in Ireland. She insists on the return of the signed form.

Upon further investigation, the Account Manager reports that Microsoft Operations claim to have not received the form. My reader contacts Eire post and receives confirmation that the documents have been delivered two days after posting.

The Microsoft Account team investigate further and come to the conclusion that the form is lost. They also confirm that contrary to their original understanding, the novation has only been actioned pending receipt of the signed form.

Round 3

What to do? Microsoft cannot legally sign a scanned copy, so my reader reluctantly creates another set of documents, gets the form signed again by both companies and sends it to the Account Management team who sends it to Microsoft Operations by internal mail. A few weeks later my reader finally receives the executed novation form and can breathe a sigh of relief that the novation is complete.

A simple, straightforward novation has taken three attempts and several months to conclude. Even worse, had my reader not been so persistent and the Account Team supportive, the novation would never have been fully executed and the company would not be able to prove they own the licenses when they are next audited.

Microsoft Operations in Ireland really needs to pull its socks up. Novated licenses can represent hundreds of thousands of pounds worth of assets, and a botched novation can dramatically impact the ROI of a merger or acquisition as well as incur significant unbudgeted expense if ownership cannot be proved during an audit.

Microsoft is happy to play hardball over incorrectly novated licenses during an audit, so the least they can do is ensure novations progress smoothly and are competently executed by its Operations teams.

If you have any advice or experience to share on this process with Microsoft or other vendors please contact me or leave a comment below.

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