Microsoft concession: You can run our wares in AWS virtual desktop under 'revised policy'

Microsoft is making a minor concession that allows customers with specific licenses to run Office wares in an AWS cloud – a week after Europe's competition regulators decided to officially probe its biz policies and practices.

The licensing tweak, first noticed by analyst Directions on Microsoft (DoM), in part reverses a licensing change made in 2019 that meant customers with perpetual licenses would need to buy fresh licenses to run those applications on AWS, Google Cloud or Alibaba infrastructure.

This, according to Google, made it five times more expensive to use Microsoft software on any other major cloud computing provider than Azure. As customers reached the end of their contracts, the new policy kicked in and many then realized how financially painful this could be.

Amid mounting complaints in Europe about Microsoft's alleged anti-competitive behavior, the company rolled out some changes to licenses in October, but these did not address the cost issue of bring-your-licenses to any of the three major cloud rivals. AWS wasn't best pleased.

Fast-forward, and new licensing terms were outlined by Microsoft yesterday which only help AWS clouds customers.

Microsoft said in a licensing update that: "Beginning August 1, 2023, users with specific licenses may run Microsoft 365 Apps for enterprise/business, Microsoft Project, and Microsoft Visio on Amazon WorkSpaces. The licenses that will be eligible under this revised policy include Microsoft 365 E3/E5/A3/A5 and Microsoft 365 Business Premium. If you currently have any of these licenses, starting from August 1, you will be able to utilize these Microsoft applications on Amazon WorkSpaces virtual desktop infrastructure."

AWS said at the same time that its AWS "End User Computing customers" would be able to "use Microsoft 365 licenses through a 'bring your own license' (BYOL) model on our Amazon WorkSpaces services."

It added: "Included apps vary by Microsoft 365 license plan. Microsoft allows E3, E5, A3, A5, and Business Premium licenses to run on WorkSpaces services. Customers can also bring licenses for Microsoft Project and Microsoft Visio to WorkSpaces services under the new licensing terms."

Wes Miller, analyst at DoM, said the concession gives users a "very premium way to run 'Office' on WorkSpaces, partially addressing some issues with Microsoft on AWS," but said it remains a costly alternative to Azure.

"You'll need a Microsoft 365 E3 or E5 subscription for every user accessing Microsoft 365 Apps for enterprise on Workspaces."

"Not Microsoft 365 licensed separately. Not Office 365 E3. You need Microsoft 365 E3, even if you don’t need EMS (Enterprise Mobility and Security). And you still need VDA (Virtual Desktop Access) for your WorkSpaces users."

Got that? Effectively it means Microsoft is "still offering far better terms with Azure Virtual Desktop (AVD) or Windows 365 than they do for AWS, Google or Alibaba," Miller concluded.

AWS confirmed the move itself, saying: "Your end users can now benefit from Microsoft 365 apps on WorkSpaces services along with their other devices."

Eligible applications – for the absence of doubt – include Word, Excel, PowerPoint, Outlook OneDrive and more. The concession is applicable to all AWS Regions where WorkSpaces is available.

"Customers using Microsoft 365 Apps on WorkSpaces services can also bring licenses to install and use additional Microsoft applications including Microsoft Project, Microsoft Visio, and Microsoft Power Automate," said AWS.

We have asked Google Cloud and Alibaba to comment. And we have asked Microsoft why it chose to offer concessions for AWS, the largest public cloud biz in the market by some measure, if it plans to extend the concession and why it chose to act now.

Cynics might suggest it is connected to the growing interest from regulatory authorities in the complaints being made in the EU and across the pond about the alleged anticompetitive behavior from Microsoft.

There are two strands: the first centers on the bundling of Microsoft's Teams with its dominant Office productivity suite, which is the one the European Commission decided to formally probe from last week.

The other pertains to the licensing policies mentioned above. Microsoft has already settled a joint complaint with OVHcloud, Aruba S.p.a and DCC in March, but the content of this will not be made public. Separately, the Cloud Infrastructure Service Providers of Europe (CISPE) trade body fired off its own complaint to the EU in November, also about Redmond's software and cloud policies. Microsoft tried to settle this, but the group – backed by AWS – refused.

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Today, Francisco Mingorance, secretary general at CISPE, told us the news that Microsoft 365 customers can bring licenses to AWS virtual desktop at no extra cost was a "positive step" but "does not for far enough."

"Software licensing restrictions need to be lifted for all cloud customers," he added.

He echoed Google in saying: "This news demonstrates that there is no technical reason why Microsoft can't embrace fair software licensing quickly, and easily remove unfair licensing terms.

He went on to claim: "Despite this concession, Microsoft continues to harm European cloud customers by stalling any substantive negotiations with CISPE, the voice of smaller European providers. Regulatory action must be taken." ®