Microsoft first announced these changes in May 2022 and, after an update in September, we’ve now got the majority of the info in the October 2022 Product Terms document. Let’s take a look at what’s changed and what it means for us all.
First things first, the Listed Providers:
Google Cloud Platform
are not included in any of these changes.
Outsourcing Software Management clause
This is in the “Universal license terms for all Software” which means it applies to all products under this category. There are 3 new elements within this clause:
Flexible Virtualisation Benefit
The Microsoft wording:
“Customers with subscription licenses or Licenses with active Software Assurance (including CALs) may use licensed copies of the software on devices, including shared Servers, that are under the day-to-day management and control of Authorized Outsourcers.”
This is similar to the existing “License Mobility through Software Assurance” benefit but doesn’t have the requirement to use an “Authorized Mobility Partner” -rather, you can use any “Authorized Outsourcer” partner…which is any partner that isn’t a Listed Provider.
While much of the focus here is on Windows Server, this new benefit applies to other products such as SQL Server too.
The Microsoft wording:
“Customers with subscription licenses or Licenses with active Software Assurance (including CALs) may access their licensed copies of software that is provided by a Cloud Solution Provider-Hoster and installed on that partner’s devices.”
Dedicated device outsourcing
The Microsoft wording:
“Customers may use licensed copies of the software on devices that are under the day-to-day management and control of Authorized Outsourcers, provided all such devices are and remain fully dedicated to Customer’s use.”
As I say, these apply to all Microsoft Software products and, as we’ll see, individual products may have their own additional terms.
Windows Server – license individual VMs
You are now able to license individual Windows Server virtual machines rather than licensing the underlying physical hardware. As expected, there are a few rules you need to follow:
Minimum of 8 core licenses per VM
Minimum of 16 core licenses per customer
Licenses must have active SA or be active subscriptions – this includes CALs used to access the Windows Server instances
Licenses can be re-assigned with the same server farm as often as needed.
90-day rule applies if moving to another server farm/cloud provider
Customers with per-user licenses for Windows 11:
install Windows 10 Creators Update or later in an Azure VM or a server that meets the requirements in the “Outsourcing Software Management” clause. The QMTH language has been removed from this section too, opening this up to the wider pool of Authorized Outsourcers.
Reading the terms, it appears that the restriction on local virtualisation with CSP licenses has been removed too – bringing them even closer to parity with volume licenses. The language now states that customers can install Windows in a VM running on their Azure or “a server” – which I read as including their own servers as well as those of an authorized outsourcer.
For Office/Project/Visio, the word “dedicated” has been removed from the terms which means hosting on shared servers is now possible:
“Remote use of the software running on a Server is permitted for any user from a Licensed Device”
There have been changes to the use rights for the Windows component of Microsoft 365 too. The previous language was:
“rights to access and use remote virtualized instances of Windows only apply to Licensed Users that are the Primary User of a device licensed with a Qualifying Operating System.”
While it now says:
“Licensed Users may only run Windows Enterprise locally on devices with a Qualifying Operating System.”
Removing the primary user requirement to access remote virtual instances. Microsoft say:
“Essentially, when licensed as part of Microsoft 365, the requirement to use VDA rights for remote access from desktops without Qualifying Operating Systems no longer applies“
There is also a change for Microsoft 365 F3 to loosen the remote virtualisation restriction. The previous clause:
“rights to access and use virtualized instances of Windows only apply to Licensed Users of a shared device with a Qualifying Operating System“
has been removed.
Microsoft 365 Apps
There is definitely some further clarification needed here. Microsoft released a new licensing guide “Using software products under the Flexible Virtualization Benefit” this month and that document states that the Flexible Virtualisation Benefit applies to Microsoft 365 Apps (formerly Office 365 Pro Plus).
“With the introduction of the Flexible Virtualization Benefit, customers’ options for using Microsoft 365 Apps…outside their own data centers are expanded to include any Authorized Outsourcer’s shared servers“
However, I can’t find language which clearly states this in the current Product Terms, so for now I’d advise not to get too carried away! I expect we’ll see an update to the Product Terms soon to add that language in – but I’ll update either way once we see something from Microsoft.
This is all pretty exciting for a licensing fan like myself – lots of new language and terms and things to check and understand. Also lots of training presentations to update!
For customers though, I’m not sure how much impact this will really have. Yes, it enables organisations to work with a much larger pool of potential hosting providers…but, in my experience at least, most orgs that are struggling want to work with Amazon AWS…and they’re not included in these changes as they’re a Listed Provider. I’m keen to see what real world impact these changes have and who wins (and loses) from it all.
PS: I’m still processing all this new info so will update with corrections as/if needed!
Microsoft have just announced a range of changes to their rules around using their software in SOME cloud environments, aimed at reducing some of the heat they’ve been receiving from European cloud providers – including complaints to the European Commission – and also heading off potential issues with the EU Digital Markets Act.
The changes include CSP access, more support for providers from Microsoft, and some changes to Software Assurance licensing rules too.
Microsoft have been under fire from various angles due to their licensing rules that restrict which products can be used within 3rd-party datacentres…particularly when compared to Microsoft Azure. It recently came to light that ‘OVHCloud’ lodged a complaint with the European Commission in 2021 and many of the “Fair Software Licensing Principles” were seen to be aimed at Microsoft too.
The current BYOL (Bring Your Own Licensing) rules of Microsoft restrict certain on-premises licenses from being used in cloud environments (apart from Azure) which, for some customers, causes frustration and higher costs…and in some cases it means a project cannot be completed.
Microsoft have announced a big new focus on ‘European Cloud Providers’ (ECP) – giving them expanded access to CSP (Cloud Solution Program) as well as creating a new internal team to focus on supporting them and their customers.
Cloud providers can host more products
The ECPs will be able to offer hosted desktop solutions containing Windows desktop and Office – including Office 365 Apps for Business/Enterprise. They will offer this via their own “unified solutions” and also by hosting customer-owned licenses – hugely expanding the available options for customers.
Microsoft are also expanding the availability of long-term fixed pricing for these providers, removing some of the pricing volatility from them and their customers.
Software Assurance changes
This is a pretty big one – Microsoft are adding ‘License Mobility’ rights to Software Assurance for Windows Server, Windows desktop, and Office. This means customers can use their on-premises licenses in 3rd-party ECP datacentres (but not AWS, GCP, or Alibaba), something that wasn’t possible before.
New Windows Server licensing option
Windows Server is licensed based on the physical CPUs and cores within the server. Microsoft are now introducing the ability to license just the virtual capacity you need, regardless of the underlying hardware. Whether this will be available globally and across all licensing programs, or restricted to just ECP datacentres, is something we are yet to discover.
European Cloud Providers – and more?
Although Microsoft’s announcement was careful to keep referring to ‘European Cloud Providers’ – it seems a Microsoft spokesperson has confirmed that the CSP and Software Assurance changes apply globally (via Mary Jo Foley). This means the vast majority of cloud providers are now able to offer something to their customers that they couldn’t previously.
On the flipside of that though, the main takeaway is that this doesn’t help customers looking to run software on AWS, Google, and Alibaba (the Listed Providers) and, in all honesty, that’s where I see most of the customer issues in this area. However, perhaps Microsoft hope that not only will these changes placate the EU but that they will also divert business away from the Listed Providers to smaller partners instead. In the new world, Microsoft may see that as a win…sure, they’re not on Azure…but they’re not on AWS either.
Microsoft have confirmed here that these changes do NOT apply to the Listed Providers – Amazon, Google, and Ali-Baba.
Microsoft have outlined their 5 “European Cloud Principles”:
and also discussed their plans to further partnerships around providing sovereign clouds for various European governments.
Apparently, they’ve changed the Cloud for Healthcare licensing model from per-user to per-tenant. The “User Subscription License” option has been replaced but none of the other terms have been changed, so it still refers to add-on SLs etc. and doesn’t mention that it’s per-tenant anywhere other than the change summary. It makes sense as the other clouds are per-tenant…but we need all the info!
Microsoft Endpoint Manager Remote Help add-on has been added. Eligible pre-requisites are Microsoft 365 E3/E5/F1/F3, Enterprise Mobility + Security E3/E5, and Microsoft Intune.
System Center 2022 has been added.
“Dynamics 365 Customer Voice and Digital Messaging” added.
Windows 11 Pro (per Device) is now available via CSP.
Microsoft Bookings added to Student Use Benefit for O365 A3 & A5.
Available for EA and MCA customers, the Microsoft Azure Consumption Commitment (MACC) is a 3-year agreement where an organisation commits to spend a certain amount on Azure over that time period.
It doesn’t require an upfront payment of the agreed amount, rather the total must be reached by the end of the MACC term. Ongoing qualifying Azure spend (either PAYG or the purchase of Azure Prepayment) is deducted* from the total on a regular basis by Microsoft and the remaining balance can be seen in the Azure portal (or via REST API). In this way, it adds some flexibility to what’s possible with Azure commitment and budgets.
However, it is a contractual commitment so if future Azure spend has been over-estimated, an organisation will find itself expected to make up any shortfall at the end of the agreement.
*If you receive Azure credits from Microsoft, any services paid for using those will not count towards your MACC total.
Certain 3rd-party services in the Azure Marketplace are eligible to count towards a MACC. In the Marketplace portal, there will be an “Azure benefit eligible” option to filter the applicable services.
This has the potential to be a decent benefit for many organisations as the use of cloud marketplaces is currently skyrocketing.
Microsoft Viva is the new range of Employee Experience tools from Microsoft and is made up of a range of Viva products:
A brief overview of the four components is here but I want to dive deeper into Viva Insights.
What is it?
Initially it looked like it would build upon the Workplace Analytics product but Viva Insights is now listed as “formerly Workplace Analytics” so it appears to be a rebrand as well as adding new features. Tbh, that makes sense as it helps to keep everything in the “Viva” bucket.
Viva Insights aims to improve employee wellbeing and productivity through using data to highlight people’s work habits such as answering emails outside of work hours and spending too much time in meetings for example. It will also provide reminders to block out time for “focus tasks” and help managers ensure they schedule regular 1-1 meetings with team members. The personal insights also include mindfulness sessions, reminders to take breaks, and a check-in to gauge a user’s mood.
It aims to provide insights at a team level and also an organisation wide level, enabling action to be taken wherever potential issues may arise. Given the impact of COVID-19 and the long-term increase in flexible working, anything that can help organisations better look after their employees – and enable employees to better look after themselves – is well timed and has the potential to be very useful.
I speak to a lot of people who find themselves on constant back to back video meetings and calls, with little time to process any of that information and even less to simply sit back and think and plan. More work = less productivity in many cases and Viva Insights may help with this…if used properly.
Pricing & Licensing
Viva Insights is an add-on license to:
Office 365 E1/E3/E5 (plus the A and G versions)
Microsoft 365 E3/E5 (plus the A and G versions)
Microsoft 365 365 Business Basic/Standard/Premium
Exchange Online Plan 1/2
and costs $4 per user per month.
Certain “personal insights” are available to all users with a license that includes Exchange Online, while others require the above add-on. There is also the extra consideration of Viva Insights Capacity.
Viva Insights Capacity
There are a range of additional things that an organisation can do with the data generated by Viva Insights – and this is where we get into the realm of capacity credits.
These additional capabilities include:
Analysis templates to quickly generate interactive Power BI reports tailored to common business scenarios
Advanced tools to help users query and customize metrics and combine Viva Insights data with external data, such as customer relationship management (CRM) and survey data
Analysis accelerators including an R-script library to help analyze organizational data trends, processes and networks
Built-in safeguards to help protect personal privacy
Pricing & licensing
Each Viva Insights license includes 1 capacity credit per month, pooled across the tenant. If an organisation requires additional capacity credits, they are licensed in increments of 5,000 credits and costs $5,000 per month.
Unused credits expire monthly.
Viva Insights represents two growing trends for Microsoft:
Software that is sold to parts of the business other than IT
Licensing which involves ongoing usage “credits” that can, potentially, be consumed in huge amounts across an organisation…and run up big bills
Organisations are definitely going to be looking for products that help them in this area and, within organisations already using Microsoft 365, Microsoft are well placed to be among the options.
If you’re responsible for Microsoft spend within your organisation, this is certainly something to keep an eye on in the future!
Microsoft have introduced a new SKU for Education – Microsoft 365 A1 for devices. It costs $38 per device for 6 years and provide the full M365 suite of apps plus Minecraft and cloud management capabilities.
The announcement seems to be aimed at Google due to the mention of “providing more for students and educators relative to competitive offerings at the same price” but, as Mary Jo Foley points out, Google’s most expensive EDU offering is $5 per student per year. Perhaps Microsoft are banking on education establishments seeing a very high ratio of students to devices?