Customers are unhappy with Microsoft’s restrictive cloud licensing policy





In 2019, Microsoft introduced new restrictions on how customers could use some of its server products on competing cloud offerings, much to the chagrin of companies like AWS and Google. But it turns out that Windows Server and SQL Server weren’t the only Microsoft products that have become more expensive to run on other clouds. Microsoft has also tightened the price screws for Windows and Office running on clouds other than its own Azure service. And now it’s not just Microsoft’s competitors who are complaining; they are also customers.

A report of April 11 by Bloomberg cited several customers with complaints about Microsoft’s policies regarding running Windows and certain versions of Office in other clouds. Bloomberg also allowed Microsoft president Brad Smith to acknowledge that the company needs to address these “grounded” concerns, even though he hasn’t provided details on when or how the company will do so.

Smith & Co. don’t do this just because of customer concerns. Last month, European regulators sent questionnaires to Microsoft’s cloud rivals and resellers asking about some of these issues. As The Register.com noted:

“Considerations include whether Microsoft is making it more difficult or more expensive for smaller cloud companies to run some programs, including Windows and Office, on rival clouds, or whether ‘technical tweaks’ are needed. Respondents were also asked whether they is necessary to integrate Microsoft products or services into their own infrastructure service in order to compete more effectively.”

Microsoft introduced outsourcing licensing restrictions in 2019. At the time, Directions on Microsoft analyst Wes Miller warned that the changes would be “huge” for customers who had wanted to use AWS and Google Cloud as dedicated hosts for running Windows Server and clients. Microsoft’s changes to its bring-your-own license terms are more restrictive and expensive for customers and partners who want to use Microsoft software on everything but Azure. To justify the changes, Microsoft officials have said that rivals like AWS or Google are always free to make similar licensing and price moves.

I have asked Microsoft for further comments on Bloomberg’s report. Not a word back so far.

Updating: A Microsoft spokesperson gave me this statement, attributable to President Smith:

“We are committed to listening to our customers and meeting the needs of European cloud providers. While not all of these claims are valid, some are, and we will definitely be making changes to address them soon.”




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