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Microsoft Revises Restrictive Cloud Licensing Policies to Avoid EU Antitrust Probe

Rabia Noureen

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Cloud Computing

Microsoft has announced new initiatives to decrease the licensing costs and restrictions for small cloud vendors. The Redmond giant plans to make some changes to its restrictive cloud-licensing policies in response to complaints from rival European cloud vendors.

Back in 2019, Microsoft changed the terms of its outsourcing license agreement that increased the cost of running Windows Server, Windows, or Office on other cloud platforms (such as Amazon Web Services (AWS) or Google Cloud), and the smaller EU cloud providers competing with these giants.

Microsoft President Brad Smith held a series of meetings with European providers over the past few weeks. The feedback from one of the CEOs suggested that customers are pretty unhappy with the new licensing rules.

“Especially as the largest tech companies have invested more in their infrastructure and services, the biggest challenge has been for smaller cloud providers, like those headquartered in Europe that have expressed concerns about our licensing practices and their ability to compete. While these companies have been growing, it has been at a rate lower than the market as a whole,” explained Microsoft President Brad Smith.

Microsoft makes changes to its restrictive cloud-licensing policies

First up, cloud providers will now be able to offer Microsoft 365 apps and Windows as a hosted desktop service running on their cloud infrastructure. Microsoft will also let cloud providers provide this service to customers who wish to buy on-premises software from its partners to host their offerings on the cloud.

In addition to this, the company plans to relax some licensing terms that should make it easier to license Windows Server for virtual environments. Microsoft has committed to supporting cloud providers by expanding the Microsoft Cloud Solution Provider program.

“To make these changes as effective as possible, we will create a new team that will work directly with European Cloud Providers. This team’s mission will be to help this community achieve its goals, provide licensing and product roadmap support, and continue to support their growth around cloud solutions.”

Microsoft’s new cloud-licensing policies also apply to non-European cloud vendors

A Microsoft spokesperson confirmed to ZDNet that these changes to its licensing practices would also apply to non-European cloud providers.

“While today’s announcement is focused on Europe, the changes to the Microsoft Cloud Solution Provider and Software Assurance programs are global. We will be communicating directly with our cloud partners and customers in the coming days on the specifics of this announcement and how it will impact them,” the spokesperson said.

Interestingly, these cloud-licensing changes follow investigations by the European Commission into Microsoft’s alleged anti-competitive practices. Microsoft is the second-largest infrastructure cloud provider worldwide, and this move should help it to avoid antitrust scrutiny.

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