It’s been a while since there’s been much to say about the good old VLSC (Volume Licensing Service Center) – it’s been ticking along for years – but there is an update now. Many of its volume licensing features are being moved to the Microsoft 365 Admin Center (MAC), this includes:
Downloads and keys
License Summary
Relationship Summary
Note the latter two will both be found under “Contracts” in the M365 Admin Center.
This means customers will have one place to manage their VL and Subscription licenses…will the MPSA Business Center be merged too?
Power Automate has 2 new RPA (Robotic Process Automation) offerings:
Individual Hosted Machines
Hosted Machine Groups
which enable you to run Power Automate RPA in Azure to more quickly test, scale, and deploy.
Individual Hosted Machines
Currently in preview, these aim to make it quick and easy to test both attended and unattended flows without the need to set up physical machines.
Hosted Machine Group
This provides auto-scaling and auto-provisions additional bots as needed when initial capacity for unattended flow bots isn’t enough. It also provides dynamic load-balancing between different groups, ensuring one isn’t adding more VMs while another has several sitting idle.
To use either of these hosted options, users require:
Power Automate per user plan w/attended RPA add-on or
Power Automate per flow plan
as a base license and then you can purchase the Hosted RPA add-on which includes:
Hosted machine
Unattended desktop flows
5,000 AI Builder credits per month
and costs £162.10 per bot per month.
If you’re using Hosted Machine Groups, you need to assign 1 x Hosted RPA add-on for each bot you want to run in parallel. I’m not currently sure how this works in relation to the auto-scaling feature…do you have to have licenses available for the maximum number of bots you’re willing to run (something you can set as an admin) or is there a “pay in arrears” option where you’re billed monthly?
Furthermore, I imagine there will be additional Azure costs although I’m yet to confirm that.
Microsoft’s financial results for the 2nd quarter of FY23 (Oct – Dec 22) don’t make the usual pretty reading this time.
Revenue was $52.7 billion – an increase of just 2%
Net income was $16.4 billion – a decrease of 12%
That’s the first decrease for a long time, showing even Microsoft are not immune to the impacts of rising costs and global recessions. However, it’s not all doom and gloom:
Productivity & Business Processes
Revenue = $17 billion…up 7%
Office 365 Commercial revenue up 11%
LinkedIn revenue up 10%
Dynamics 365 revenue up 21%
All increases but quite a bit lower than we’re used to from previous quarters. Office Commercial (i.e. on-premises) has dropped 30% as customers continue to move to the cloud.
Intelligent Cloud
Revenue = $21.5 billion…up 18%
Azure = 31% up
In most scenarios, 31% growth is good, great even…but not for Azure after a couple of years of 50%+ growth! Although the most recent quarters dipped just below that 50% marker, this quarter still represents a significant drop. Microsoft do mention higher energy costs as a factor in the decreased margin.
Earnings call
There are now 12,000 Azure Arc customers, a 100% increase in 12 months.
45,000+ Power Automate customers – a 50% increase over last year.
Satya Nadella mentions new functionality to build workflows from natural language prompts…that would be really useful for me!
280 million Monthly Active Users (MAU) for Teams
Teams Phone added over 5 million PSTN seats in the last 12 months and is the market leader
Microsoft Security is now over $20 billion and Nadella states they’re taking market share in all the major categories. He also states that a customer has consolidated from 10 security vendors down to just Microsoft – this is something I often advise that organisations explore.
EMS is now at 241 million seats.
Overall, LOTS of mentions of AI from Satya Nadella (as expected) and a real focus on the future with AI, Platforms, Viva, E5 and more. The expectations for future growth and advances seem to more than outweigh the slight disappointment of these results.
Microsoft have announced plans to cut a further 10,000 jobs – a shade under 5% of their total workforce. As with previous rounds of job cuts, Satya Nadella has stated they’ll continue to hire in other “key strategic areas” likely including AI and platforms.
Microsoft will see $1.2 billion in charges in Q2 from these layoffs and also “changes to [the] hardware portfolio”.
This is part of a wider trend of layoffs across the industry recently including:
Alphabet = 12,000
Amazon = 18,000 Salesforce = 8,000 Meta = 11,000
as the tech industry boom comes to a halt and companies look to re-focus and prioritise. Google have said that they expanded to quickly during the pandemic and now need to rationalise their workforce.
It will be interesting to see which areas within Microsoft see the brunt of these cuts, as that will really give insight into how they’re reshaping their business.
I wish everyone affected by this the best of luck.
A very quiet month as you’d expect – the 2 main updates are:
Clarification that Microsoft Defender for Endpoint/Cloud/Business products can be used on devices running on-premises, in Azure, and under the control of 3rd-parties
Information added about the EU data boundary service – see more here
The EU Data Boundary is a geographical area within which Microsoft has committed to store and process customer data for the majority of their online services. This is aimed at addressing concerns around data processing/location and GDPR, held both by customers and organisations such as the European Union.
It is comprised of countries in the EU:
and EFTA:
For my fellow Brits, notice the United Kingdom isn’t included #Brexit
Currently, datacentres in the following countries are being used:
although Microsoft may add additional datacentres within the EU/EFTA over time.
How it works
Azure
Regional resources deployed within an EU Data Boundary region will be in-scope. For non-regional services, there is info here on how these can be configured within the EU Data Boundary. Note, not all services have yet been re-architected to allow this.
Dynamics 365 & Power Platform
This is based on the location of your billing address and, this, tenancy.
Microsoft 365
If you have a billing address within the EU/EFTA, you’re in scope…unless you have purchased the Multi-Geo capabilities add-on license.
Which products are in-scope?
According to the January 2023 Product Terms, the EU Data Boundary can apply to these products/services:
The Product Terms also lists half a dozen scenarios where data may still go outside the EU Data Boundary, these being:
Clarification to the Online Services “Acceptable Use Policy” that crypto-mining is prohibited without Microsoft’s prior approval. I wonder when they will give permission for this?!
DevOps Server 2022 added
A clarification notice around Microsoft’s communication services, relating to taxes and relations to 3rd-party services.
There are a few licensing updates and changes to be aware of with SQL Server 2022 as well as a price increase:
Flexible Virtualisation Benefit
Both licenses with active SA and active subscriptions can now be deployed with any Authorized Outsourcer – that is, anyone who isn’t a Listed Provider (Amazon, Google, Alibaba). However, don’t forget that License Mobility through Software Assurance rights still exist (via SA) which allow you to put software on the servers of an “Authorised Mobility Partner” – and the Listed Providers are eligible for this.
Furthermore, when licensing SQL Server Standard or Enterprise by virtual OSE, if you have active SA you can run an unlimited number of containers containing SQL Server within that virtual OSE.
Related to this, Microsoft have made another change that will cause some issues for certain customers. Licensing a virtual machine based on the number of virtual cores now requires Software Assurance with SQL 2022 and, as that is the only option available for licensing virtual machines with SQL Server Std 2022 (i.e. you can’t license the physical hardware to then run VMs), this means that Software Assurance is a requirement if you have virtual machines with SQL Server Std per core.
Machine Learning removal
Looking at the Product terms, it appears that Microsoft have removed the rights for SQL Server Enterprise customers to use:
Machine Learning for Window or Linux
Machine Learning Server for Hadoop
PAYG licensing
Enabled via Azure Arc, this new billing model enables organisations to pay for SQL Server on a monthly or hourly basis:
The servers must be connected to Azure Arc to use this option. For 2022, the Arc connection is a default part of the setup process while for SQL 2014 and above, it will be enabled via a capability within the Azure portal which is, according to Microsoft, coming soon. This seems to suggest that PAYG isn’t available with SQL 2012 or earlier which makes sense, given they’re all out of support.
See more on SQL PAYG here and the pricing is here.
New pricing
Microsoft have confirmed that SQL Server 2022 Standard, Enterprise, and Web pricing will increase by 10% from January 2023 – including public sector.
Microsoft price increases are coming – again. They have announced they will be performing “price harmonisation” in 2023 – where they will be bringing local currency pricing in line with US Dollar (USD) pricing. They say this is to give customers “more consistent pricing”, but I’d say it mainly to stop organisations purchasing in regions other than their primary location.
They state that some products in some regions are up to 40% cheaper than the US pricing and I believe the Euro is around 15% cheaper. Once the initial adjustment is made, Microsoft will continue the process on a 6-monthly cadence going forward to keep ensuring local pricing doesn’t drift too far from USD again. They do say that prices will be “aligned up or down” so it will be interesting to see what happens to pricing in regions such as Australia that typically pay more than USD for more products.
While the focus of the announcement is cloud pricing, on-premises software pricing will also be affected although Microsoft will consider “local and regional market dynamics including competition, business models, local currency rates and local inflation” – which includes rising energy costs.
More changes for Japan & Korea
Alongside the above, Microsoft have also revealed they will be revising pricing across all products (on-premises and cloud) in Japan & Korea from April 1, 2023. The increases are as follows:
Those of you with long-term contracts such as Enterprise Agreements won’t be affected until your renewal (or if you add new products) but now is the time to start planning how this will alter budgets over the next few years. Also, don’t forget the O365/M365 price increases in March 2022 that will also kick in on certain products you may have on your contract.
Update
An announcement on Jan 5th, 2023 for price increases across GBP, EUR, DKK, NOK, SEK currencies.
Cloudy with a chance of Licensing 