Microsoft finalises cloud licensing changes in response to EU complaints

30 Aug 2022

Image: © Peter/

Microsoft said these changes will make it easier for smaller cloud competitors to ‘thrive’. It follows licensing complaints made against the company in 2019.

Microsoft is making changes to its software licensing terms to help other cloud service providers to compete.

The tech giant said the new changes will make it easier for customers to run Microsoft software on the cloud platforms of smaller rivals in the EU. These changes are set to take effect on 1 October.

“At Microsoft we recognise the importance of a competitive environment in the European cloud provider market, in which smaller competitors can thrive,” the company said in a blogpost. “It is therefore critical for us to remain mindful of our responsibilities as a major technology company.”

The changes come following complaints made against the company in 2019. A number of Microsoft’s EU customers said its licensing terms made it more expensive to run Microsoft software such as Office on the cloud platforms of competitors such as Amazon Web Services, Google and Alibaba.

It was reported by Reuters in April that the European Commission had begun quizzing Microsoft’s customers about its cloud business and licensing deals in response to these complaints.

A month later, Microsoft president Brad Smith revealed the “European cloud principles”, which included changes to the company’s cloud licensing. Smith said the changes came from feedback the tech giant heard from European cloud providers.

The company has now shared further details about what these changes entail. They include a new flexible virtualisation benefit for customers, which aims to expand customer choice when outsourcing.

Microsoft also plans to make it easier to virtualise Windows 10 and 11 by eliminating the Virtual Desktop Application add-on license requirement for Microsoft 365 F3, E3 and E5.

Certain “listed providers” such as Alibaba, Amazon Web Services, Google and Microsoft’s own cloud services are excluded from the changes.

According to Reuters, the European Commission has fined Microsoft €1.6bn over the last decade due to EU antitrust breaches.

Last November, a group of tech companies in the EU called out Microsoft on anti-competition grounds for favouring its own products on the market-leading Windows OS.

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Leigh Mc Gowran is a journalist with Silicon Republic