Microsoft promises change in European cloud licensing policy

In response to recent criticism from rival European cloud vendors, Microsoft outlined a set of five new European cloud policies when customers were asked to pay more to run Microsoft software in non-Microsoft cloud environments, which was seen as a limited cloud policy.

The changes come a month after Reuters reported that the European Commission had begun asking European Microsoft customers questions about their cloud licensing terms.

In a May 18 blog post, Microsoft President Brad Smith outlined a set of five European cloud policies that Microsoft plans to adopt.

These are:

1. We will ensure that our public cloud meets the needs of Europe and serves the values ​​of Europe.
2. We want to make sure that our cloud provides a platform for European software developers to succeed.
3. We will partner and support European cloud solution providers.
4. We will ensure that our cloud offers meet the sovereign needs of European governments in partnership with local trusted technology providers.
5. We acknowledge that European governments are controlling technology and we will adapt and support these efforts.

Microsoft has also announced that it will expand the Microsoft Cloud Solutions Provider program to better support European cloud providers.

Microsoft has promised to ease licensing of Windows servers for virtual environments by relaxing licensing rules “which reflect legacy software licensing practices, where licenses are attached to physical hardware.”

The initiative will apply across Europe, including the United Kingdom.

The problems began in 2019, when Microsoft changed the terms of its outsourcing license agreement. As a result, customers running Windows servers on AWS or Google Cloud are charged more than those running Azure.

In his lengthy post, Smith said that senior business leaders at Microsoft have met with CEOs of two European suppliers and have been involved in business across Europe to remedy the situation. He said the most compelling response came from a CEO who told Smith that he felt he had “caught fire in a friendly fight with Microsoft over Amazon.”

Indicating that Microsoft may take further steps in the future, Smith added that “it is important to acknowledge at the outset that these steps are very broad but not necessarily complete.”