Cloudy with a chance of Licensing
Latest news on Microsoft licensing, Cloud, and AI
This category is for anything Microsoft related-so you’ll probably find that msot posts end up in here!
Not much happening in May, this month we saw:
Products in the Core Services lists will store data at rest in the same geo as the service is deployed, part of Microsoft’s data privacy practices.
Windows 365 Frontline is a new licensing option for Microsoft’s Cloud PC offering, aimed at “Frontline” workers who don’t need constant access to their own PC. This can be scenarios such as:
Each W365 Frontline license allows 3 Cloud PCs virtual machines to be provisioned, but they cannot be used concurrently. The maximum active number of Frontline VMs allowed is equal to the number of licenses you’ve purchased i.e. you’ve bought 20 licenses which enables 60 VMs…but only 20 can be in use at any one time.
W365 Frontline introduces the concept of concurrent licensing – rather than licensing ever shift worker, you instead buy enough licenses to cover the maximum number of desktops active at any one time. For example, 300 users who work in 3 shifts of 100 users = 100 licenses needed.
From a management perspective, the licenses will not show as assigned to users (as they are applied at the tenant level) so you will need to use the W365 utilization report to see how many licenses are being used.
Learn more here – https://learn.microsoft.com/en-us/windows-365/enterprise/introduction-windows-365-frontline and https://www.microsoft.com/en-us/microsoft-365/blog/2023/04/06/windows-365-offers-flexibility-from-the-office-or-home-to-the-frontline/
It’s the Microsoft Product Terms updates for April 2023 and, to paraphrase Puff Daddy and the Bad Boy Family…it’s all about Windows Server baby!
Some key changes that help to harmonise licensing across different platforms, which is a benefit for all of us involved!
Azure Hybrid Benefit for Windows Server changes:
No longer need to allocate 16 licenses as a minimum
No longer have to assign stacked licenses in groups of 8
Confirms minimum of 8 core licenses for AHB VM
Licensing Win Svr by individual virtual OSE:
No longer need to allocate 16 licenses as a minimum
CSP customers with Standard licenses can use Datacenter images as guests when licensing by virtual OSE – but must follow Standard edition use rights
CSP-Hoster:
Customers do not need Windows Server CALs or External Connector licenses when accessing “server software acquired from, fulfilled, and hosted by a Cloud Solution Provider-Hoster”.
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:
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?
You can see more info from Microsoft here.
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:
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.
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.
SQL Server 2022 is now generally available and is, in Microsoft’s words, the “most Azure enabled release” so far.
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:
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:
Japan
See Japanese announcement here.
Korea
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.
Sign up to my monthly Microsoft newsletter here.
This month we’ve 2 new M365 data related SKUs:
M365 Advanced Data Residency
M365 Cross-tenant User Data Migration
There is also the removal of:
Microsoft Threat Experts
SharePoint Advanced Management Plan 1
The SharePoint SKU was only added last month but there was very little info available, so it seems likely it was added in error. Let’s see if/when it reappears.
A nice addition – Azure Active Directory Basic now allows unlimited SSO (Single Sign On) – the previous limit was 10 apps so à really significant change.
There is a 50% off promo for Defender for Endpoint on EA from Nov 1, 2023 to June 30, 2023
Let’s take a look at Microsoft’s financial results for the first quarter of FY23.
Looking at the individual divisions we see:
Overall revenue up 9% to $16.5 billion and within that:
Overall revenue was up 20% to $20.3 billion and within that:
Still a good increase but noticeably slowing down from previous quarters. Microsoft note that cloud margins are down primarily due to increased energy bills.
Overall revenue decreased slightly to $13.3 billion and within that:
“Teams is becoming a ubiquitous platform for business process.”
and shared that the number of enterprise users running 3rd party/custom apps has increased 60% year over year.
“we are going to optimize for long-term customer loyalty by proactively helping them optimize [Azure] spend“
This follows on from what he said last quarter (and also matches what AWS recently said) that helping customers waste less will ultimately help them spend more.
See all the info, slides, and transcripts here.
Cloudy with a chance of Licensing 