EOH promises urgent clarity on Microsoft contract
EOH says it expects a “considered communication” from Microsoft in due course following the technology group’s urgent meeting with the software giant on Tuesday evening.
EOH was served a 30-day notice by Microsoft, which wants to terminate an agreement that allows EOH to directly resell the US company’s licences. Microsoft initially did not give EOH its reasons for wanting to cancel the contract.
In a Sens announcement on Wednesday morning, EOH said both companies were aware of the urgency needed to resolve the matter and that deliberations between the two are being prioritised.
“A meeting has been held between its senior executive, including CEO Stephen van Coller, and the Microsoft leadership whereat EOH reiterated its commitment and willingness to understand the requirements of it by Microsoft in the local market,” the Sens announcement said.
“EOH is expecting a considered communication from Microsoft in due course, following our representations to them.”
Although EOH says the reselling contract would only contribute about R10m of EOH’s profits in the current financial year, analysts point out that keeping a good relationship with Microsoft is important for any company in the IT space and being seen to have fallen out of Microsoft’s favour is contributing negatively to EOH’s already dented public image.
EOH’s share price reached an eight-year low on Tuesday