Microsoft Announces Changes To Cloud Licensing Terms That Are Beneficial To Cloud Providers

Microsoft has announced that beginning October 1, 2022, the licensing terms for its European cloud services would be changing. The new rules are meant to level the playing field between Microsoft and other cloud service providers. This is likely a response to concerns raised by EU antitrust regulators concerning Microsoft.

The reason is, that the EU Competition Commission is probably receiving complaints against Microsoft from cloud service companies in Germany, Italy, Denmark, and France. As of August 29, 2022, Microsoft announces several modifications relating to cloud licensing in a post titled “Easily bring your licenses to the cloud.”

Microsoft has announced that as of October 1, 2022, users will be able to transfer their licenses for Microsoft products to a partner’s cloud or use shared hardware as part of the company’s updated outsourcing and hosting agreements.

This strategy was developed to give users more freedom in how they deploy their Microsoft software. The new policies are as follows, as previously announced:

Microsoft Announces Changes To Cloud Licensing
Microsoft Announces Changes To Cloud Licensing

1. More flexibility and options for software outsourcing:- 

Customers with Software Assurance or subscription licenses will be able to use their own licensed software to develop and/or install solutions and run them on the dedicated or shared infrastructure of any outsourcer (with the exception of Alibaba, Amazon Web Services, Google, and Microsoft) thanks to the new Flexible Virtualization benefit.

Customers of hosting providers will be able to install SQL Server, Microsoft 365 Apps, and other customer-licensed goods on their hosted solutions. Those aforementioned cloud service companies are not affected by the adjustments: Alibaba, Amazon Web Services, Google, and Microsoft. Customers who are interested in using a listed provider for outsourcing can do so by acquiring licenses directly from the supplier.

2. New Windows Server virtual core licensing:-

Windows Server can be licensed on a per-virtual-core basis for customers who have Software Assurance or subscription licenses. Without being restricted to a fixed number of physical cores on the server, this model allows clients to buy licenses for exactly the number of virtual cores they require (subject to a minimum amount per VM).

It is simpler to license Windows Server when virtualizing or outsourcing thanks to the virtual core-based licensing option, which allows users to license Windows Server based on the number of virtual cores used in virtual machines.

The Virtual Desktop Application (VDA) add-on license is no longer required for Windows 10 and Windows 11 virtualization in Microsoft 365 F3, Microsoft 365 E3, and Microsoft 365 E5. Customers without a primary Windows Pro device who are interested in virtualizing Windows 10 or Windows 11 on servers will find this useful.

3. Simplifying how customers can virtualize Windows 10 or Windows 11 with Microsoft 365:- 

Regardless of whether the user’s primary device runs a Qualifying OS, anyone with a Microsoft 365 F3, Microsoft 365 E3, or Microsoft 365 E5 license can virtualize Windows 10 or Windows 11 on their own servers or on the servers of outsourcers (except Alibaba, Amazon Web Services, Google, and Microsoft).

Microsoft announced that its Cloud Solution Provider program partners would begin offering one- and three-year subscriptions for a variety of Microsoft products, including Windows Server, Remote Desktop Services (RDS), and SQL Server, to give customers more predictable costs over the course of their business. The effect on prices is yet to be observed.

This change is in response to a 2019 complaint filed with the EU Competition Commission by cloud service providers in Germany, Italy, Denmark, and France. Microsoft “understands the importance of a competitive environment in the European market for cloud providers where smaller competitors can thrive,” according to the company’s blog.

Therefore, Brad Smith, Microsoft’s president, and vice chairman had previously announced shifts in May 2022. Streamlining the process by which clients can migrate their applications to the partner’s cloud is a primary goal of the revised licensing conditions.

Microsoft also cares that its partners have the tools they need to provide customers with affordable options. Keep our expectations in check until we see the price tags.