Microsoft says it’s fixing “unfair” software licensing terms

Microsoft has announced it will be fixed reportedly unfair licensing terms affecting some of its most popular software offerings.

Earlier this year, discussions between the company and other European cloud provider partner representatives uncovered unfairness in the tech giant’s software licensing terms, which meant that smaller competitors were placed at an unfair advantage. 

Now, Microsoft has confirmed it will revise these terms, with the changes coming into effect from October 1, 2022.

Microsoft European Cloud Provider licensing terms

“We are committed to competing fairly and in partnership with the diverse group of European cloud providers, and we strongly believe in the importance of an open and competitive cloud economy in Europe,” the company wrote in a blog post.

In May 2022, Microsoft responded to concerns in some European countries that its software licensing practices had a negative impact on competitors in the cloud market.

“As a major technology provider, we recognize our responsibility to support a healthy competitive environment and the role that trusted local providers play in meeting customers’ technology needs,” Brad Smith, Microsoft President and Vice Chair said at the time.

Smith also highlighted Microsoft’s commitment to change, which should take place “within weeks, rather than months or years”. 

Changes to the company’s terms – which are said to “help these partners to be more competitive and grow their businesses” – are now set to come in more than four months after the initial announcement.

The first of Microsoft’s three goals is to make running software easier on partner cloud products, which includes greater support for multi-tenant servers and easier virtual machine licensing for Windows Server. It will do this by eliminating the current requirement that users should have a Microsoft 365 F3, E3, or E5 license.

Secondly, the company wants to increase the opportunities for its partners and their customers to collaborate by introducing more cost-effective solutions. Finally, Microsoft hopes to “empower” its partners to build hosted solutions.

In his May 2022 statement, Smith explained the steps outlined above are “very broad but not necessarily exhaustive,” implying that further measures could be taken to reduce Microsoft’s advantageous spot in the cloud segment.

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