Microsoft pledges changes to European cloud licensing policies

Microsoft has outlined a set of five new European Cloud Principles in response to recent criticism from rival European cloud vendors after customers were asked to pay more to run Microsoft software in non-Microsoft cloud environments, under what were seen as restrictive cloud licensing policies.

The changes come a month after Reuters reported that the EU commission had started asking European Microsoft customers questions about their cloud licensing terms.

In a blog post published on May 18, Microsoft president Brad Smith outlined a set of five European Cloud Principles that Microsoft plans to adopt.

These are:

1. We will ensure our public cloud meets Europe’s needs and serves Europe’s values.
2. We will ensure our cloud provides a platform for the success of European software developers.
3. We will partner with and support European cloud solution providers.
4. We will ensure our cloud offerings meet European governments’ sovereign needs, in partnership with local trusted technology providers.
5. We will recognize that European governments are regulating technology, and we will adapt to and support these efforts.

Microsoft also announced it would be expanding the Microsoft Cloud Solution Provider program, to better support European cloud providers.

Microsoft has also pledged to make it easier to license Windows Server for virtual environments by relaxing the licensing rules “that reflected legacy software licensing practices, where licenses are tied to physical hardware.”

The initiative will apply across Europe, including the United Kingdom.

The issues started in 2019, when Microsoft changed the terms of its outsourcing license agreement. As a result, customers who were running Windows Server on AWS or Google Cloud were charged more than those running it on Azure.

In his lengthy post, Smith said that senior Microsoft businesses leaders had met with CEOs of two European providers and engaged with businesses across Europe to try and remedy the situation. He said that some of the most compelling feedback came from one CEO, who told Smith he felt that he “was a victim of friendly fire in Microsoft’s competition with Amazon.”

Hinting that Microsoft might take further steps in the future, Smith also stated that “it’s important at the outset to acknowledge that these steps are very broad but not necessarily exhaustive.”