UPDATED 13:28 EDT / MAY 18 2022


Microsoft to update software licensing terms after reported EU antitrust scrutiny

Microsoft Corp. will change the licensing terms of some software products after reportedly drawing scrutiny from antitrust regulators in the European Union.

Microsoft President and Vice Chair Brad Smith announced the move in a blog post today. 

Last year, a number of cloud providers in the EU filed regulatory complaints against Microsoft over its software licensing terms. This past April, sources told Reuters that EU regulators had sent questionnaires about the issue to some of the technology giant’s customers and partners. It was reported that the move could potentially be followed by an antitrust investigation.

The European Commission, the EU’s executive arm, has launched antitrust investigations into several of Microsoft’s fellow tech giants over the past few years. Most recently, the commission earlier this month brought antitrust charges against Apple Inc. over business practices related to Apple Pay. 

The software licensing changes that Microsoft announced today may help the company address regulators’ concerns and avoid an antitrust investigation. Some of the changes are designed to make it easier for cloud providers to use the company’s products. Other updates are designed to simplify software procurement for Microsoft customers.

Microsoft will enable cloud providers in Europe to build hosted desktop services based on Windows and the Office productivity suite. Cloud providers can use Windows 11, as well as the Business and Enterprise editions of Microsoft 365, the product suite that includes Office. They will also gain the ability to provide hosted desktop services to customers who buy Windows and Office from other Microsoft partners.

The licensing change may create more competition for Microsoft’s Azure Virtual Desktop offering. The offering, which debuted last year, enables companies to run virtual Windows machines in the cloud and make them available to workers. The refreshed terms of service that Microsoft will roll out could potentially enable partners to launch Windows-based hosted desktop services with features similar to Azure Virtual Desktop. 

Software pricing is another focus of the licensing update. Microsoft is “expanding the range of products that can be offered to customers at fixed pricing for longer terms, which will provide more pricing stability and certainty to providers and their customers,” Smith wrote today in the blog post.

The second set of updates that the executive detailed will make it simpler for customers to purchase Microsoft’s products. As part of the move, the company plans to roll out revised licensing terms that will be written more clearly. Microsoft’s goal, Smith stated, is to help customers more easily determine the cost of the products they buy.

Microsoft operates a program called Software Assurance for organizations that purchase its software products. The program provides access to application updates, backup features and other benefits. The program’s terms will be revised as part of the updates that Microsoft detailed today.

“We will expand Software Assurance to enable customers to use their licenses on any European Cloud Provider delivering services in their own datacenters, similarly to how they can do so on Azure today,” Smith stated. The new terms will apply regardless of whether the cloud hardware on which a customer runs Microsoft software is “dedicated or multitenant,” the executive added.

Microsoft will “partner more closely with European cloud hosters so we can make this support experience more seamless for customers,” Smith stated. Microsoft plans to set up a new support team as part of the effort that will focus on helping European cloud providers use its products.

The move comes about a year after Microsoft announced plans to give enterprises and public sector customers in the European Union more control over their data. The initiative spans Azure, Microsoft 365 and the Dynamics 365 line of business applications. Microsoft will give customers the option to have all their data stored and processed in EU data centers, which should simplify tasks such as regulatory compliance.

Photo: efes/Pixabay

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