Microsoft hikes cost of licensing its software on rival public clouds, introduces Azure

Microsoft has previewed the Azure Dedicated Host, which provides a physical server hosted on Azure and not shared with other clients.

Along with this new service, the company has made changes to the licenses that will make Microsoft software more expensive for some AWS, Google and Alibaba customers.

Although an Azure dedicated host is a physical server for the exclusive use of a client, Microsoft said this is not a "basic service" as it is designed to run Azure virtual machines. Dedicated hosts are still subject to automatic maintenance, although you can set a maintenance time window to protect against service interruption.

A physical server may fail, of course, and Microsoft suggests that you deploy several virtual machines on several hosts. There is an option to "automatically replace the host in case of failure", which is enabled by default. You can deploy servers in two or more Azure availability zones to obtain high availability.

There are currently two dedicated host specifications available. Type 1 is based on a 2.3GHz Intel Xeon E5-2673 v4 (Broadwell), has 64 vCPU (virtual CPUs) and costs $ 4,055 or $ 4,492 per hour depending on the RAM (256GB or 448GB).

Type 2 is based on Xeon Platinum 8168 (Skylake) with 72 vCPU and 144 GB of RAM for $ 4,039 per hour.

These prices exclude licensing costs, and this is where Microsoft is making some significant changes. Currently, customers can use local licenses on dedicated servers rented from hosting providers or in the cloud. Microsoft now says that:

  Microsoft introduces new license terms for public cloud providers

Microsoft presents new license terms for public cloud providers (click to enlarge)

What does this mean for you?

What are the implications? As usual with Microsoft licenses, making sense of the details is not trivial. Here is a frequently asked question (PDF).

Many software implementations that are currently allowed will no longer be allowed in dedicated cloud services from the aforementioned providers. Microsoft is making it more difficult or, in some cases, impossible to bring its own licenses, forcing customers to rent the software through SPLA (Service Provider License Agreement) or purchase licenses with software warranty, a fee of annual service.

Azure is included in the list of providers, but in some cases Microsoft is giving customers of its own cloud an exit clause through a specific "Azure hybrid benefit".

For example:

  • Windows Enterprise will no longer be allowed other than with Windows VDA (Virtual Desktop Access) E3 or E5. As a concession, affected customers "will have until October 1, 2020 to move their existing Windows Enterprise workloads from the dedicated hosted cloud services of the listed providers."
  • Office Professional Plus will not be allowed with or without software warranty. [19659016] Exchange and SharePoint will require Software Assurance with License Mobility.
  • Windows Server is not allowed with or without Software Assurance, except in Azure through Azure Hybrid Benefit. You can still obtain a Windows Server license from the cloud provider through SPLA, but you cannot bring your own license.
  • SQL Server will require Software Assurance with License Mobility, or in Azure through Azure Hybrid Benefit, or subscription through SPLA.
  • Unlimited virtualization for SQL Server through enterprise licenses per core, and Windows Server through Windows Server Datacenter, will no longer be available through Azure Hybrid Benefit.

If you are an AWS customer, the information on this page, which currently says that "you can use your own software [Microsoft] licensed in dedicated infrastructure, even without Software Assurance", will no longer apply to licenses acquired afterwards from October 19.

Wes Miller, Windows licensing analyst at Directions on Microsoft, described the new license terms as:

Amazon Workspaces is a virtual desktop solution. The new Windows virtual desktop hosted on Microsoft Azure is not affected in the same way, since you can use a Microsoft 365 license.

Please note that all these changes only apply to dedicated hosts on providers. of the cloud listed. Multiple tenant hosts are not affected, although in this case the option to bring their own license is already limited.

Microsoft can expect to increase the use of Azure by making it more expensive to use other cloud providers, but it is taking some risks. Increasing the cost of running Microsoft software in other public clouds is not only annoying for existing customers. , but also gives them more incentives to look for non-Microsoft solutions, such as those based on Linux or open source software. ®

Balancing consumerization and corporate control

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