Cloudy with a chance of Licensing
Latest news on Microsoft licensing, Cloud, and AI
Not surprisingly, December was a quiet month.
On the 1st, Microsoft made some Azure updates:
and then on the 5th:
Microsoft & CISPE have come to an agreement which takes some of the legal pressure off Microsoft and should lead to a more diverse cloud market…to a point.
CISPE (the Cloud Infrastructure Service Providers in Europe) is, as its name suggests, a group comprised of, and working for, European Cloud hosting organisations including AWS, OVH, and Aruba.
In November 2022, CISPE filed a formal complaint with the European Commission about Microsoft’s “anti-competitive licensing practices” in the cloud. CISPE said:
“the new contractual terms imposed unilaterally by Microsoft on 1st October 2022 add new unfair practices to the list. Microsoft’s ongoing position and behaviours are irreparably damaging the European cloud ecosystem and depriving European customers of choice in their cloud deployments.”
The crux of the issue is that Microsoft’s licensing rules make it cheaper to run Microsoft workloads in Azure than any other cloud environment, thus giving them an unfair advantage against their competitors.
The two parties have signed a Memorandum of Understanding (MoU) where Microsoft have committed to make changes to address the claims and so CISPE have agreed to withdraw its complaint and also that they “will not initiate or support complaints on these issues in Europe or elsewhere”. Microsoft have also agreed to pay $22 million to CISPE to reimburse them for the last 3 years’ of “cost of litigation and campaigns for fair software licensing”.
Central to the agreement is Microsoft agreeing to release “Azure Stack HCI for Hosters”. This new Azure Stack HCI offering will include:
Enabling 3rd-party cloud providers to close the gap between their services and those available in Microsoft Azure – a key part of the complaint.
There is a clock ticking for Microsoft now, as changes must be made within 9 months. They must release this new offering and/or solve the issues another way within that timeframe otherwise the complaint will be refiled with the European Commission.
It must be noted that CISPE state:
“Amazon Web Services, a CISPE member, was excluded from these negotiations and it, along with Google Cloud Platform and AliCloud, will neither benefit from nor be bound by these terms”
This means Microsoft’s “Listed Provider” exclusion still applies to this change.
European Cloud Observatory (ECO)
This new body, established by CISPE and including Microsoft, will monitor the development of “Azure Stack HCI for Hosters” and the fairness of Microsoft’s cloud licensing.
Not everyone is happy with this outcome. It has been reported that Google made an offer to CISPE worth almost $500 million, comprised of licenses and cash, for them to continue their compliant against Microsoft.
Additionally, Google’s Head of Platform, Amit Zavery, has said:
“Microsoft’s playbook of paying off complainants rather than addressing the substance of their complaint hurts businesses and shouldn’t fool anyone“
while an AWS spokeperson stated:
“Microsoft selectively making these changes for some CISPE members shows that there are no technical barriers that prevent Microsoft from making its software more easily available to rival cloud providers”
The Azure Stack for Hosters product will enable cloud providers to offer new features and capabilities that are attractive to customers, which is good. The main issue that many people may have is that this agreement excludes Amazon AWS and Google Cloud Platform, so their customers are no better off than before.
While that is true, I think it is also representative of what I believe is CISPE’s main aim – to help boost the non-hyperscaler cloud market in Europe. They want to help companies like OVH, Irideos, and UpCloud more so than Amazon and Google.
This is certainly not the end of this story. The cloud is going to be a battleground for many years to come and so licensing and competitive advantages will be a key issue for some time…
As well as the Azure Stack HCI news, Microsoft have also added Azure Hybrid Benefit (AHB) for AKS (Azure Kubernetes Service).
This benefit is available for Windows Server Standard and Datacenter (both with SA) and also CSP server subscriptions. Hosts must be Windows Server 2019 (and later) or Azure Stack HCI
Each Windows Server core license w/SA allows use of 1 virtual core of AKS. The AKS AHB is additive, meaning the licenses can be used to cover on-prem/Azure workloads AND to use AKS. You can see more info here.
Ignite 2022 saw Microsoft expand the Azure Hybrid Benefit (AHB) to grant access to Azure Stack HCI.
It is only available for Enterprise Agreement customers and only applies to Windows Server Datacenter licenses w/SA; licenses must be allocated for all physical cores in the Azure Stack HCI cluster. Licensing in this way allows you to use unlimited Windows Server base instances across the cluster. Furthermore, as per the Product Terms, the “dual-use” rights do not apply so licenses can be used as Windows Server licenses OR as Azure Stack HCI licenses.
It is activated in the Azure portal:
I question the phrasing in the Microsoft announcement here as it says that customers “exchange” their Windows Server licenses to get Azure Stack HCI. This suggests that they are somehow transformed from one type into another but that doesn’t appear to be the case – as this is via AHB, it is simply an additional right that doesn’t change the underlying licenses. As with allocating Windows Server licenses to “regular” Azure, it seems one can re-assign from Azure Stack HCI licenses back to Windows Server Datacenter licenses following the 90-day rule.
Given the increasing level of focus on CSP and the MCA, it’s interesting to see that it is restricted to Enterprise Agreement customers only. It not being made available for Open Value and MPSA customers is, rightly or wrongly, business as usual these days but CSP has been getting a lot of shiny things lately.
SQL Server 2012 goes end of support on July 12, 2022 – that’s about 10 weeks from the time of writing! This means even security updates from Microsoft will no longer be provided to customers running this software – a situation organisations really don’t want to find themselves in.
It only seems like 5 minutes since this was the situation with SQL Server 2008 (it was actually almost 4 years ago!) which causes headaches for a lot of organisations. I’d say that, based on conversations at conferences and training sessions etc., SQL Server 2012 is going to be at least equally painful as many businesses seem to have got to 2012 and then no further, considering it to be much more modern than 2008.
If your business is still running SQL Server 2012 – what are your options?
Assuming you want to remain up to date on security patches (which I’d say you do!), you’ll need to acquire Extended Security Updates (ESU) from Microsoft which will give you 3 more years of security updates. That however, comes at a price:
Let’s say you have a 4-core SQL Server 2012 Std box – approx. license cost of £5,000. That will mean:
3 year total = £15,000
ESUs are included free of charge for workloads running in Microsoft Azure VMs – including “regular” Azure VMs as well as:
You can save a big amount of money through not having to pay for the ESUs…but cloud migrations come with their own set of costs…as well as benefits.
If you’ve not already made a decision on this, please gather the relevant people together and discuss the option. While both the above options can seem expensive, I’d suggest they’re nothing when compared to the cost of a security breach/ransomware attack.
You can see more info in the Microsoft blog post here.
Microsoft have announced a new way for Azure Stack HCI customers to license their Windows Server guest VMs. The snappily titled “Windows Server subscription for Azure Stack HCI” (WSSASHCI) allows organisations to purchase Windows Server licenses via their Azure subscription.
Currently the versions available are:
WSSASHCI is currently free in public preview but once it hits General Availability (GA) it will be $23.6 per physical core (in your Azure Stack HCI cluster) per month.
Cloudy with a chance of Licensing 