Microsoft rivals AWS and Google Cloud slam tech giant's licencing changes

Microsoft recently announced amended licencing deals and other changes that will take effect on October 1

Amazon Web Services and Google Cloud have slammed recent changes to Microsoft's cloud licences, alleging that they limit competition and lock customers in.

Microsoft on Monday announced amended licencing deals and other changes that will take effect on 1 October.

This goal is to make outsourced infrastructure hosting easier after concerns were raised in Europe about some of its software licensing practices that impact competing cloud providers.

As part of the changes, Microsoft is scrapping the need for an additional licence to virtualise Windows 10 or Windows 11 on customers' own servers or on outsourcers' servers.

This applies to any user with a Microsoft 365 F3, Microsoft 365 E3, or Microsoft 365 E5 licence.

The tech giant says it will also introduce a new flexible virtualisation benefit.

This means customers with software assurance or subscription licences will be able to use their own licenced software to build and install solutions and run them on any outsourcers' infrastructure, Microsoft claims.

However, these policy changes do not apply to a handful of providers including Alibaba, AWS, Google and Microsoft itself.

"Customers that want to use a listed provider for outsourcing can acquire licenses directly from the listed provider," Microsoft said.

It will also change its Services Provider Licensing Agreements programme to remove the ability to outsource these licenses on listed provider data centres.

Marcus Jadotte, Google vice president of government affairs and policy, claimed on Twitter that Microsoft's changes hamper flexibility.

He said: "The promise of the cloud is flexible, elastic computing without contractual lock-ins. Customers should be able to move freely across platforms and choose the technology that works best for them, rather than what works best for Microsoft.

"At Google Cloud, we believe that openness matters, and we continue to gain customers' trust by promoting the security, cost, and benefits of using multiple cloud providers.

"We urge all cloud providers to avoid locking in their customers and compete on the merits of their technologies."

In a statement to Reuters, a spokesperson from AWS said the move limits competition.

It said: "Microsoft is now doubling-down on the same harmful practices by implementing even more restrictions in an unfair attempt to limit the competition it faces - rather than listening to its customers and restoring fair software licensing in the cloud for everyone."

In a LinkedIn post in July, AWS senior vice president of sales and marketing Matt Garman said Microsoft's licensing practices are costing customers "millions of dollars".

Microsoft has said it is making changes based on partner feedback, adding its "grateful for the requests and recommendations we've received from our partners".

Chief partner officer Nicole Dezen said: "Partners have asked Microsoft to simplify licensing and to expand the range of products that can be offered to customers at fixed pricing for longer terms, and we've responded.

"We also want to provide more opportunities for customers to be able to have Microsoft software hosted on partners' infrastructure."