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Microsoft is committed to easing the load on Europe’s cloud infrastructure
Microsoft has announced new overhauls to its Microsoft Cloud Solution Provider Partner Program to appease European regulators.
Microsoft President Brad Smith outlined the specific actions Microsoft plans to take. Microsoft plans to allow European service providers to:
- Host Windows and Office “(including Windows 11 and Microsoft 365 Apps for business and enterprise)” on their own infrastructure.
- Host purchased Windows and Office software “from other Microsoft partners”.
- Offer Microsoft products at “fixed price for longer terms”.
European complaints
The concessions likely represent Microsoft’s response to complaints from European service providers that it has been more expensive to host Windows Server and SQL Server on their infrastructures compared to Microsoft Azure infrastructure.
Such unfair competition (at least according to the European Commission’s regulatory thinking) apparently started with the outsourcing license changes Microsoft made in 2019, according to an April 22 article by veteran Microsoft journalist Mary Jo Foley.
While Smith’s announcement only referred to European regulations and European service providers, the anti-competitive aspects of Microsoft’s licensing may affect hosting service providers in other countries that are part of the Microsoft program. Cloud Solution Provider.
In a May 18 article update, Foley received the following comment from a Microsoft spokesperson indicating whether Microsoft intends to change its licensing practices for service providers on other markets:
Although today’s announcement focuses on Europe, the changes to the Microsoft Cloud Solution Provider and Software Assurance programs are global. We will communicate directly with our cloud partners and customers in the coming days on the details of this announcement and its impact on them.
Smith’s announcement included a commitment from Microsoft to meet Europe’s needs and to “adapt and support” European technology regulations. Microsoft also promised that its cloud services would help ensure the success of European software developers.
Simplified Licensing
Microsoft also claimed that it is working to simplify its licensing by following fair software licensing principles.
Licenses will be written more clearly and costs will be more easily determined, Smith suggested. Microsoft also plans to add software license mobility capability to its Software Assurance program. Software Assurance is an annuity program that insures software upgrades, but it is an additional cost paid on top of Microsoft’s software license costs.
Here’s how Smith characterized the coming Software Assurance change:
We will revise and expand our Software Assurance program, where customers purchase new version rights, disaster recovery, failover support, license mobility and many other benefits. Today, Software Assurance benefits do not include License Mobility rights for products such as Windows, Office, or Windows Server, so customers must use this software in more restrictive programs or on hardware dedicated specifically to these customers.
Smith also indicated that Microsoft plans to remove the counting of physical cores on a server as part of Windows Server licensing costs when a server is used in hosted services environments:
We’ll make Windows Server licensing easier than ever for virtual and cloud environments by relaxing licensing rules that reflect legacy software licensing practices, where licenses are tied to physical hardware. With the changes we will be making, customers will now be able to purchase licenses only for the virtualized compute capacity they need, without having to count the number of physical cores on which the virtualized environment is hosted.
The timing of these changes has not been described, and they relate specifically to European markets. However, Microsoft appears to be considering making these licensing changes more broadly to its Cloud Solution Provider program, as well as the Software Assurance program.
European investments
Smith touted Microsoft’s more than 40-year-old operations in European markets and said Microsoft has built or is building “17 data center regions in Europe.” It has invested $12 billion in Europe over the past two years, Smith said. Microsoft has worked with “nearly 50,000 European startups”, he added.
The announcement noted that Microsoft holds 20% of the overall cloud services market, trailing Amazon at around 33%, with Google in third place. These figures come from a study by the Synergy Research Group.
About the Author
Kurt Mackie is senior news producer for 1105 Media’s Converge360 group.
