Rivals Slam Microsoft Over Licence Change

Microsoft has provoked a strong reaction from its cloud service rivals, after it announced an upcoming change to its software licence.

On Monday Microsoft’s chief partner officer Nicole Dezen in a blog post outlined significant new licensing changes to “make bringing workloads and licences to partners’ clouds easier.”

According to Dezen these changes would benefit partners and customers globally by simplifying the license terms for using Microsoft software in the cloud.

But critics argue the changes are anti-competitive and will deter customers from moving to other cloud service providers.

Licence changes

Microsoft said the update to its licensing terms is part of its commitment it made when it announced its new European Cloud Principles in response to ‘partner feedback.’

Microsoft however was facing legal issues after European cloud operators complained to the EC, that Redmond’s existing licensing practices were putting them at a disadvantage, with higher fees for running Windows in clouds on non Azure cloud infrastructure.

But Microsoft is now changing this, and these (license) changes have three primary goals, wrote Dezen in her blog post.

1. Make it easier for customers to bring their software to the partner’s cloud: Expanded use rights allow customers to run their software, including Windows 11, on hosters’ multitenant servers and more easily license virtual machines for Windows Server.
2. Ensure partners have access to the products necessary to sell cost-effective solutions that customers want: Create more opportunities for partners to work with more customers, to sell the solutions they need, and to run them where they prefer.
3. Empower partners to build hosted solutions with speed and scale: Enable partners to build hosted desktop and server solutions to help directly fulfill customers’ hosting needs.

Rival objections

The changes announced by Microsoft’s Dezen will come into force from October, and essentially will allow customers with Software Assurance or subscription licenses to use these existing licenses “to install software on any outsourcers’ infrastructure” of their choice.

But there is a catch – a rather major catch that rivals AWS, Google and others have noted.

This change specifically excludes what are called ‘Listed Providers’ – a group that just happens to include Microsoft’s biggest cloud rivals (AWS, Google and Alibaba etc), as well as Microsoft’s own Azure cloud, in a bid to steer customers to Microsoft’s partner network.

“Microsoft is now doubling-down on the same harmful practices by implementing even more restrictions in an unfair attempt to limit the competition it faces – rather than listening to its customers and restoring fair software licensing in the cloud for everyone,” a spokesperson for AWS was quoted by Reuters as saying in an email.

Google Cloud’s VP for Government Affairs & Policy Marcus Jadotte, in a reaction posted on Twitter said that “customers should be able to move freely across platforms and choose the technology that works best for them, rather than what works best for Microsoft.”