EOH has released a SENS update announcing that, due to the expiry of the 30-day notice period given to it by Microsoft, it is officially no longer a reseller of Microsoft software licences.
“While we understand the need for Microsoft to interrogate and finalise their own investigations, we are disappointed at the unilateral manner in which Microsoft has terminated the relationship prior to giving consideration to the impact on South African corporates,” said EOH.
Impact on customers
According to EOH, the ramifications of the loss are likely to be:
- Access to partner support portals for EOH’s CRM and productivity solutions business model will be affected.
- Their cloud business and platform business, as well as Azure cloud resale offerings, will initially be affected, with EOH committing to enter into discussions to “ensure continuity of service and revenue streams”.
- EOH’s Microsoft-related bespoke application development, its largest business, will mostly remain unimpacted.
- The company’s Microsoft-related managed services clients will not be affected.
- Long-term impact on the company’s IP businesses can be negated through migrating to other cloud service providers.
In total, EOH assesses that the combined impact equates to under R20 million for the current financial year.
EOH also said that on 12 March, various EOH group companies received a 30-day notice period of Microsoft Ireland’s intention to terminate their Microsoft Partner Network Agreement with these companies.
Microsoft Ireland did not provide EOH with any reasons for the termination.
EOH highlighted that investigations are ongoing to determine any wrongdoing on the part of EOH, its customers, its partners, and its employees which led to the decision by Microsoft.
EOH has also hired forensic accounting teams to investigate its public-sector contracts, following allegations of a corrupt contract between it and the SA Department of Defence. This allegation led to Microsoft cutting ties with EOH.
“Employees implicated in wrongdoing have either been suspended or have resigned,” said EOH.
The company has also implemented a new framework whereby all public-sector deals, as well as related partners, are reviewed, screened, and vetted by ENS Africa.