Steven Burke, Wade Tyler Millward
Changes include eliminating the need for another license to virtualize Windows 10 and 11 on customer servers and contractor servers, removing the ability to outsource certain licenses to major cloud provider data centers .
Microsoft plans to roll out partner program policy changes in a bid to make it easier to host outsourced infrastructure after the tech giant’s software licensing policies sparked controversy in Europe earlier this year.
Changes include a new partnership program for “hosters”, eliminating the need for another license to virtualize Windows 10 and 11 on customer servers and contractor servers, removing the ability to outsource certain licenses to data centers from major cloud providers and a new Windows Basic Virtual Server License, according to Microsoft.
Microsoft announced the changes in a blog post published Monday and signed by Nicole Dezen, who was named director of partners for the Redmond, Washington-based tech giant and vice president of the Global Partner Solutions organization during the ‘summer.
[RELATED: AWS EXEC CALLS MICROSOFT LICENSING TACTICS ‘ANTI-COMPETITIVE’]
What changes to the Partner Program did Microsoft announce?
CRN has contacted Microsoft for comment.
Along with Dezen’s promotion came a reorganization of Microsoft’s partner organization following the departure of line manager Rodney Clark.
The changes announced by Microsoft on Monday do not appear to have any effect on the tech giant’s controversial “new business experience” campaign, which partners say has forced them to renegotiate terms with customers and pushed partners and customers to annual subscription commitments instead of monthly.
Still, Michael Goldstein, president and CEO of Fort Lauderdale, Fla.-based Microsoft partner LAN Infotech, praised Microsoft for listening to partner feedback and making changes to simplify software licensing.
“It’s good to see Microsoft giving us more flexible licensing options,” he said. “Anything Microsoft can do to simplify licensing is essential. This will save time and money for us and our customers. It comes down to Microsoft making it easier for partners like us to do business with them.
Goldstein said the biggest benefit for his company among Microsoft’s announcements on Monday is a Windows Server licensing option on a virtual core, a licensing model compatible with shared server outsourcing, according to Microsoft.
“It looks like the new virtual core license allows our customers to buy what they need instead of having to buy a server core license in an eight-pack,” he said.
With the new option, customers can license Windows Server based on the number of virtual cores used in virtual machines, making it easier to license Windows Server when virtualizing or outsourcing. Currently, Windows Server is licensed per physical core. Customers must therefore access the hardware of the physical server to ensure that they have enough licenses to cover all the physical cores of the machine.
“This change will help cloud providers attract customers with legacy Windows Server workloads by allowing them to move those workloads from on-premises servers to the cloud,” according to Microsoft.
Another benefit is that Microsoft is extending one- and three-year subscription options for Windows Server, Remote Desktop Services (RDS), and SQL Server for partners in the Cloud Solution Provider program. Microsoft will also offer “more monthly billing options” for one-year commitments.
“Today customers purchase a server license on an annual basis, it seems to me that they allow us to turn that annual commitment into a monthly license,” Goldstein said.
Goldstein said he needed to dig into the licensing changes in detail to determine the ultimate impact on his business and his customers.
“You need to have your master’s degree in Microsoft software licensing to understand what’s going on here,” he said. “I look forward to digging into this to see what it means for us and our customers. The most important thing is that Microsoft listens to partner feedback and tries to make software licensing simpler.
Waiting for NCE relief
Goldstein said that while Microsoft’s announced licensing changes don’t appear to change Microsoft NCE licensing issues, he would still like to see a “relief” for customers stuck in Microsoft 365 annual licenses to get a 20% discount.
“We want to see flexible cancellation and transfer policies on Microsoft 365 licenses,” he said. “We heard that changes were coming. This is the time of year when Microsoft makes these changes.
With NCE, customers are required to commit to Microsoft software offerings such as Microsoft 365 annually or pay a 20% premium on monthly commitments. “We want to see flexible cancellation and transfer policies on Microsoft 365 licenses,” he said. “We would like to see some relief for customers who have purchased X number of licenses and want to reduce those commitments due to business changes.”
Changes after the European controversy
The European Commission has sought feedback from competitors on Microsoft’s cloud services after French cloud provider OVHcloud claimed that Microsoft licensing interfered with OVHcloud running Microsoft products on its own cloud networks, according to Bloomberg.
At the same time, Microsoft is making it easier and cheaper to pair Windows, Office and Windows Server with Azure, according to complaints.
Earlier this summer, controversy prompted an Amazon Web Services (AWS) executive to write on Microsoft-owned social media network LinkedIn about the tech giant’s situation in Europe.
As part of upcoming licensing changes, after October 1, Microsoft will eliminate the need for an additional license to virtualize Windows 10 and Windows 11 on customers’ servers or on a contractor’s server. The policy change applies to users with Microsoft 365 F3, Microsoft 365 E3, or Microsoft 365 E5 licenses, depending on the company.
The policy change does not apply to suppliers Alibaba, AWS, Google, and Microsoft itself. Customers who want to use these vendors for outsourcing “can acquire licenses directly from” the vendor, according to Microsoft.
But the policy change still applies even if the user’s primary device has a qualifying operating system (QOS). Users do not need to obtain additional licenses to virtualize Windows 10 or 11 on their servers or on the servers of contractors.
However, users still need a primary device with QOS to run Windows 10 and Windows 11 Enterprise locally on computers, according to Microsoft.
Microsoft will introduce a new flexible virtualization benefit so Software Assurance and Subscription Licensing customers can use their own licensed software to build and install services and run them on any subcontractor’s infrastructure. processing, dedicated or shared, according to Microsoft.
“This gives partners who offer infrastructure outsourcing the ability to host customer solutions on more flexible hardware configurations, and allows hosting partners who sell hosting with license included (such as Windows Server under Service Provider License Agreements, or SPLAs) to allow their customers to install customer-licensed products, such as SQL Server, Microsoft 365 Apps, etc., on their hosted solutions,” according to Microsoft.
In October, Microsoft will also change its Service Provider License Agreement program to remove the ability to outsource such licenses to data centers at Microsoft itself and cloud rivals Google, Alibaba and AWS.
The change attempts to fix the problem of managed service providers (MSPs) purchasing through SPLA to host on others’ data centers, according to Microsoft. Instead, SPLA was intended for partners to offer services hosted on their own data centers.
“Any SPLA partner impacted by this change has until September 30, 2025 to switch from ‘AWS, Google, Microsoft, or Alibab outsourced hosting’ or to license directly from the listed vendor outside of their SPLA,” according to Microsoft. .
Microsoft will launch a program “later this year” as part of its Cloud Solution Provider (CSP) channel partner program. The “CSP – Hoster” program – which replaces Microsoft’s Qualified Shared Hosting (QMTH) program – is intended to enable partners to pre-build hosted desktop and server services for sale to customers who need a new license or who already have one.
At first, the hosting program will be limited to direct bill partners only, “but we look forward to expanding program eligibility over time,” according to Microsoft.
Customer must have Microsoft Customer Agreement with hosting partner and proof of pre-existing license, if applicable.
Partners can access a catalog of Microsoft software used to pre-build services instead of obtaining separate media and keys from each end customer to deploy the pre-built service, according to Microsoft.