Critics Say Windows Licensing is Anticompetitive

With Microsoft now offering Windows on Azure, its critics alleged that the firm now makes it more expensive to do so on rival cloud platforms. Or, in some cases, impossible.

Curiously, Microsoft agrees.

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“There definitely are some valid concerns,” Microsoft president Brad Smith told Bloomberg in an interview. “It’s very important for us to learn more and then make some changes.”

Microsoft, to date, has escaped serious regulatory scrutiny in an era that has been defined by antitrust action and related lawsuits against other Big Tech firms like Amazon, Apple, Facebook, and Google. But that is starting to change. Microsoft’s proposed acquisition of Activision Blizzard will likely take years to wind its way through the regulatory process in various jurisdiction, for example. And the EU is currently examining whether Microsoft’s cloud offerings are shutting out smaller rivals from the continent like OVHcloud.

“Through abusing its dominant position, Microsoft undermines fair competition and limits consumer choice in the cloud computing services market,” an OVHcloud statement noted in March.

“We’re continuously evaluating how we can best support partners and make Microsoft software available to customers across all environments, including those of other cloud providers,” a Microsoft statement added in response.

At issue now is the way that Microsoft licenses Windows and Office. It’s usually possible to run these solutions on rival cloud platforms like Amazon AWS and the Google Cloud Platform. But as contracts are being renewed, customers are discovering that the cost of doing so is escalating. And in some cases, Microsoft now prohibits them from doing so. Its solution? Use Windows 365 on Azure instead.

Amazon and Google both complained to Microsoft about this business practice to no avail. But with its customers starting to complain—and with the understanding that heading directly to antitrust regulators is the best way to get a fast response from the software giant—Microsoft will likely make changes to its new licensing restrictions and perhaps lower costs and restrictions for those that wish to use its products on rival cloud platforms.

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Conversation 16 comments

  • dspeterson

    Premium Member
    12 April, 2022 - 11:29 am

    <p>Microsoft is artificially limiting cost saving options for Windows licensing to Azure for sure, that impacts everyone. Smaller providers do have some options around cost savings options for other things like SQL licensing that Amazon doesn’t seem to get but still have to jump through a number of hoops to get them.</p><p><br></p><p>Using Office 365 licensing on shared multi-tenant hardware is also artificially gated through a Direct CSP/SPLA requirement which is a bummer as well (I suspect most providers are just looking the other way and are non-compliant here).</p>

  • lvthunder

    Premium Member
    12 April, 2022 - 12:05 pm

    <p>Critics complain that everything is anti-competitive.</p><p><br></p><p>Of course it’s going to be cheaper to run Microsoft software on Microsoft’s cloud. These third parties need to offer something Microsoft doesn’t to compete.</p>

    • Daishi

      Premium Member
      13 April, 2022 - 3:55 am

      <p>Except that that’s not what they’re doing. They aren’t making it cheaper to run Windows, they’re making it more expensive to do anything else.</p>

  • SvenJ

    12 April, 2022 - 1:23 pm

    <p>They need to get Flo to explain the concept of bundling. If you get more than one product from the same company, they cut you a break. </p>

    • erichk

      Premium Member
      12 April, 2022 - 3:19 pm

      <p>Oh man … I’m really trying to picture her in a Microsoft advertisement.</p>

    • red.radar

      Premium Member
      14 April, 2022 - 1:00 am

      <p>Honestly…. Some forms of Bundling probably should be banned as an anti-competitive tactic. It is used all the time to entrap customers. </p>

  • ekim

    Premium Member
    12 April, 2022 - 3:57 pm

    <p>This all sounds like it did 20 years ago. It feels so much less relevant now than it did back then.</p>

  • ebraiter

    12 April, 2022 - 4:39 pm

    <p>I can’t tell if Microsoft’s licensing is anti-competitive but a client of mine has a large bunch of Oracle databases running on Windows and Linux. Oracle gives a nice discount on their DB licenses if you use their virtual platform than Azure or others. I’m talking about what i believe is $100,000 per year cheaper.</p>

    • nine54

      Premium Member
      13 April, 2022 - 10:14 am

      <p>There are a couple of issues. It’s possible this has changed, but previously certain Windows hosting scenarios required dedicated hardware if the VMs were hosted on non-Azure clouds. This is an arbitrary requirement that Microsoft does not impose for Azure, and this artificially increases the cost of running Windows workloads outside of Azure. </p><p><br></p><p>The other issue–and potentially one remedy–is how discounts are applied when products are bundled. Microsoft could offer a discount on <em>Azure compute</em> if customers run their Windows workloads on Azure. Other clouds could do something similar if they choose. However, if Microsoft offers a discount on <em>Windows licenses</em> when using them on Azure, that is not something that other clouds necessarily can replicate.</p>

  • stevek

    12 April, 2022 - 6:56 pm

    <p>So when can I run Google Docs on Azure then?</p>

    • Cardch

      13 April, 2022 - 2:36 am

      <p>Now! Well, you can connect to it, at least.</p>

  • christophercollins

    Premium Member
    12 April, 2022 - 11:47 pm

    <p>This isn’t uncommon and happens with other platforms.</p><p><br></p><p>Certainly no worse than killing a mobile platform by refusing to allow a YouTube app. Google is the king of anti competitive tactics. From MS to Roku, to tracking even when you say don’t track.</p><p><br></p><p>I have no issues with this behavior.</p>

    • Daishi

      Premium Member
      13 April, 2022 - 3:58 am

      <p>You were doing so well until the last sentence.</p>

  • winner

    13 April, 2022 - 2:46 am


  • zamroni111

    13 April, 2022 - 8:03 am

    <p>Another problem is pc manufacturers force feed windows when buying new computers, especially for laptops.</p><p>If they are not ready to support n Linux desktop,why don’t they simply give option of no os? </p>

  • WaltC

    13 April, 2022 - 11:02 am

    <p>It’s a bit reminiscent of Symantec going to the EU in Brussels and demanding that the EU forbid Microsoft from competing with its own AV software–Symantec wanted to leave the security of Windows to companies other than Microsoft–namely, itself. They failed, of course…;) What a horrible ordeal that would have been, though! I think Microsoft has the perfect right and responsibility to secure Windows as it sees fit, but I also believe Microsoft has the duty and obligation to listen to its customers. From Intel on, innovation and product development stagnate until a company perceives it has a real competitor emerging. The taskbar function assassination in Windows 11 is a prime example of Microsoft ceasing to listen to its customers. Did the same thing with Win8. I will say, though, that Microsoft is allowed to make poor decisions, and the company’s history is littered with the graves of lots of bad decisions through the years. To err is human…listening to your customers is divine (my own paraphrase)…;)</p>

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