Microsoft Finalizes Plans to Fix Unfair Licensing in EU

Posted on August 29, 2022 by Paul Thurrott in Cloud, Microsoft 365, Office, Office 365, Windows 10, Windows 11 with 4 Comments

Responding to a three-year-old complaint, Microsoft today said that it would fix its unfair licensing terms in the EU.

“We recognize the importance of a competitive environment in the European cloud provider market, in which smaller competitors can thrive,” a new post to the Microsoft Corporate Blogs notes. “It is therefore critical for us to remain mindful of our responsibilities as a major technology company.”

In 2019, several Microsoft customers in the EU complained that the software giant was making it prohibitively expensive to run Windows and Office workloads on non-Azure cloud platforms like AWS and Google Cloud, triggering inquiries from EU antitrust regulators. Microsoft immediately responded that the complaints were “valid,” but it did nothing to address them in any material way.

In May 2022, Microsoft finally came up with a response, announcing that it would make it less expensive for customers to run Microsoft software like Windows, Windows Server, Office, and SQL Server on non-Microsoft cloud platforms in the EU.

But it wasn’t until today that the software giant announced the details and timing of this plan. Now, Microsoft says that it will implement “major revisions and upgrades to its outsourcing and hosting terms” that go into effect on October 1, 2022. It will be easier and more cost-effective for customers to use Microsoft software on competing cloud platforms, it says, and for its partners to build hosted desktop and server solutions that meet their customers’ needs.

“Partners have asked Microsoft to simplify licensing and to expand the range of products that can be offered to customers at fixed pricing for longer terms, and we’ve responded,” Microsoft corporate vice president Nicole Dezen says. “We also want to provide more opportunities for customers to be able to have Microsoft software hosted on partners’ infrastructure.”

Additionally, Microsoft revealed that it will better support European cloud providers with a new Flexible Virtualization benefit, a Windows Server virtual core licensing option for Software Assurance and subscription licenses, and the elimination of the Virtual Desktop Application (VDA) add-on license requirement for Microsoft 365 F3, Microsoft 365 E3, and Microsoft 365 E5. Now, customers can work with partners in Microsoft’s Cloud Solution Provider program to get pre-built hosted desktop and server solutions and either bring their own license or get the license from a partner.

“These changes will support customers’ ability to move their licenses to a partner’s cloud, leverage shared hardware, and have more flexibility in deployment options for their software licenses,” Microsoft explains.

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