Microsoft to ease cloud services options for partners and customers in October —


Microsoft will facilitate cloud services options for partners and customers in October

Microsoft this week announced licensing and hosting changes for Cloud Solution Provider (CSP) program partners and their customers, most of which will take effect on October 1, 2022.

The changes are rather nuanced and reflect Microsoft’s promises in May to address some European competition complaints in cloud services. So-called “listed vendors,” a name Microsoft defines as “Alibaba, Amazon Web Services, Google, and Microsoft,” aren’t covered by the changes.

The cloud services changes aim to loosen previous licensing restrictions that Microsoft apparently imposed in 2019, affecting smaller CSP partners. The changes coming in October will also provide customers with new benefits.

Microsoft’s CSP changes don’t seem to be well received by its big cloud services competitors. Google and Amazon are strong critics, according to this Reuters report.

Licensing changes coming in October
Here are those changes, in summary, but they do not apply to listed providers:

  • A new “Flexible Virtualization” benefit, which allows customers with Software Assurance coverage for on-premises software to move the software to “any cloud provider infrastructure – dedicated or shared.” Software Assurance is an annual cost, ensuring product upgrades, which is paid in addition to Microsoft’s software license costs.
  • CSPs can offer “pre-packaged hosted desktop and server solutions” based on licenses customers own or partners offer, which is seen as another benefit of flexible virtualization.
  • The Virtual Desktop Application (VDA) add-on license requirement to access Windows 10 or Windows 11 hosted operating systems is removed, but only for “Microsoft 365 F3, Microsoft 365 E3, and Microsoft 365 E5 users which “do not have Windows Pro primary device.”
  • One- and three-year subscription options” for many products, including Windows Server, Remote Desktop Services (RDS), and SQL Server, through partners in the Cloud Solution Provider program, to provide price stability with subscriptions long-term”.
  • Ability for Software Assurance payers to move Windows Server workloads to Azure VMs and apply their physical core licenses to virtual cores in Azure VMs.

Microsoft has clarified that these upcoming changes will not only apply in Europe, but are intended for “Europe and globally,” according to this Microsoft blog post. The changes will make it easier for customers to use partner cloud services and for partners to “build hosted solutions with speed and scale,” the blog post says.

Nuances of the partner program
In an announcement to partners, Microsoft’s new Chief Partner Officer, Nicole Dezen, said Microsoft is making these changes “based on partner feedback.”

The announcement included some nuances. For example, CSP partners will be able to build their own hosted desktop and server solutions using Microsoft products under a new program called Cloud Solution Provider – Hoster, Dezen said. She described this new program as undergoing a soft and limited launch “later this year”.

“When launched later this year, this program [Cloud Solution Provider — Hoster] will be limited to CSP direct billing partners only, but we look forward to expanding program eligibility over time.”

Partners participating in the Cloud Solution Provider — Hoster program will need a Microsoft Customer Agreement and will be offered a “Microsoft Software Catalog” for use. Customers transferring their licenses to these hosts will need to show proof of license. The Cloud Solution Provider — Hoster program will replace an old Qualified Multitenant Hosting (QMTH) program, Dezen said.

Additionally, the flexible virtualization benefit will allow applicable CSPs offering hosted services under Microsoft’s Service Provider License Agreements (SPLAs) to use “more flexible hardware configurations.” These SPLA licensees also have the ability to let their customers “install client-licensed products, such as SQL Server, Microsoft 365 apps, etc., on their hosted solutions,” Dezen said.

However, SPLA partners cannot use these SPLA licenses to host services on the data centers of so-called Listed Providers. Microsoft gives these partners approximately three years to comply with this restriction.

“Any SPLA Partner impacted by this change has until September 30, 2025 to switch from a listed provider to SPLA Outsourced Hosting or to license directly from the listed provider outside of their SPLA,” Dezen wrote.

Dezen characterized applicable CSPs’ ability to offer longer-term hosted services (such as one-year and three-year terms) as addressing “price stability for a customer.” Microsoft sometimes offers discounts for these customers, but this notion was not mentioned. Billing options can also be simplified, as Dezen indicated that “we are also adding more monthly billing options into the CSP program for many of our one-year plans.”

Removing a VDA license requirement for hosted Windows 10 and Windows 11 operating systems seems to have a catch. While these hosted operating systems don’t have to be a “qualifying operating system” (like being at least a Pro edition), the local operating system must be.

“Users must still have a primary device with an eligible operating system to run Windows 10/Windows 11 Enterprise locally on their PC,” Dezen explained in a footnote.

About the Author

Kurt Mackie is senior news producer for 1105 Media’s Converge360 group.

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