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Microsoft needs to pull its novation socks up!

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.

About Martin Thompson

Martin is owner and founder of The ITAM Review, an online resource for worldwide ITAM professionals. The ITAM Review is best known for its weekly newsletter of all the latest industry updates, LISA training platform, Excellence Awards and conferences in UK, USA and Australia.

Martin is also the founder of ITAM Forum, a not-for-profit trade body for the ITAM industry created to raise the profile of the profession and bring an organisational certification to market. On a voluntary basis Martin is a contributor to ISO WG21 which develops the ITAM International Standard ISO/IEC 19770.

He is also the author of the book "Practical ITAM - The essential guide for IT Asset Managers", a book that describes how to get started and make a difference in the field of IT Asset Management. In addition, Martin developed the PITAM training course and certification.

Prior to founding the ITAM Review in 2008 Martin worked for Centennial Software (Ivanti), Silicon Graphics, CA Technologies and Computer 2000 (Tech Data).

When not working, Martin likes to Ski, Hike, Motorbike and spend time with his young family.

Connect with Martin on LinkedIn.


  1. Rich Gibbons says:

    As a Microsoft partner, I’d fully agree with this.
    Microsoft’s processes involving hard copy, oringinal versions of forms are not great and almost always result in customers filling out the same forms at least twice.
    We too have had the experience of forms being delayed and/or lost in the post which in turn can delay company activities such as acquisitions.
    In some cases, there are time limits between the form being signed & when it must be received by MS…having to rely on the postal service in situations such as this is not ideal!

  2. Rory Canavan says:

    With all the resources available to Microsoft, perhaps they should consider national centres of operation/novation before entrusting everything to the black-hole that is EOC Dublin.

  3. Mary Barr says:

    One thing I found out during this process with my company is that the licenses that are no longer owned by my company still showed up on our online account. When I asked Microsoft Volume License Support about removing them, they said it couldn’t be done. Even though we no longer owned the rights to them.

    I had to leave myself a reminder to not count them in my true-up preparations and that I should, to be on the safe side, account for them on the true-up documentation to the Account Team until the contract expired and we could drop the licenses from the new agreement.

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