Customers, consultants and resellers are uneasy with Microsoft because its Office licences impose restrictions and higher costs for running in public cloud environments other than Azure.

In 2019, Microsoft changed the licensing terms for Office and Windows. The fine print of these terms states that running the software in public cloud environments other than Azure involves higher costs. In addition, Bloomberg writes, the terms state that some versions are not allowed in the public cloud environments of AWS, Google Cloud and Alibaba Cloud.

Customers, consultants and resellers of Microsoft and its public cloud competitors told Bloomberg that these licence conditions violate antitrust laws. Bloomberg won’t disclose any identities: the complaints were published on the condition of anonymity, because the sources aren’t authorized to discuss confidential license details publicly.

Smaller cloud providers also affected

Smaller public cloud providers are affected as well, such as France’s OVH. These providers also have Office and Windows customers running on proprietary servers, which is a breach of terms. Furthermore, to be able to run Microsoft Office, OVH would have had to commit to strict audit processes and the provision of sensitive customer information.

Microsoft response

In response, Microsoft states that the licensing terms for Office and also Windows give discounts to customers running the software on Azure. Indeed, running Office and Windows on other public cloud environments is more costly.

According to Microsoft, the public cloud environments in question could mitigate higher costs by offering discounts themselves. The tech giant also confirmed that it currently prohibits certain Office versions from running on AWS, Google Cloud and Alibaba Cloud.

Consultation with customers

Microsoft seems uneasy with the criticism. The tech giant promises to sit down with customers and public cloud providers shortly.

Microsoft’s competitors, including AWS, are currently in contact with US and EU antitrust authorities to prompt further investigation of Microsoft’s licensing conditions. To be continued, no doubt.

Tip: Windows 365 Cloud PC — cloud version of Microsoft operating system