Microsoft Charging More for Its Software in Other” Clouds”

In the last few weeks two major moves by Microsoft have created considerable conversation and concern over the future of two key offerings from the company that has recently joined the “Trillion-Dollar Club,” alongside Apple and Amazon.  Renewed licensing terms for dedicated hosted cloud services and the announcement of the end of life for Office 2019 have many users scrambling to understand how this affects their business and ultimately their bottom line. What does all of this mean to the average business owner?

What do These Changes Mean for You?

First, companies looking for a clear path for Office should consider their current state.  If an organization is currently running Office 2010, a switch to Office 365 before Office 2010’s end of support date of October 13, 2020 may be their best choice forward.  Office 365, the cloud-based version of Office, has proven to be an efficient and capable productivity suite with wide acceptance.  For those who still need a local installation of common applications like Outlook, Word, Excel, or PowerPoint will have to rely on Office 2019 in the meantime but need to remember mainstream support will end on October 10, 2023 with extended support terminating on October 14, 2025. Furthermore, several of the latest highlights, such as the new AI features found in PowerPoint, are only available in cloud-based offerings. If a business wants to explore these new elements, careful review is needed to ensure product selection includes those items. For organizations that are faced with the need for on premises or offline solutions, alternatives such as LibreOffice, which is compatible with Windows, MacOS, and Linux operating systems, may be their best solution. However, for those that have been looking for alternative to Office, such as Google’s G Suite, many find this a good time to investigate alternative capabilities. Proper selection will rely on various factors including things such as price, compatibility, and organizational acceptance. Ultimately, office tools are moving to the cloud and tailoring one’s workload will be essential to business productivity.

The second announcement of renewed licensing terms for dedicated hosted cloud providers has resonated throughout the business community.  These new terms prevent companies with on-premise licenses purchased without Software Assurance and mobility rights from being deployed to cloud providers such as Alibaba, Amazon (including VMWare Cloud on AWS), Google, and including Microsoft.  Many organizations have responded both positively and negatively.  From a positive perspective, some explain that Microsoft will utilize this position to capitalize on the massive amounts of money they have spent on software and services and increase the product offerings.   The alternate view argues that now some enterprises will have to allocate more funds without any additional return.  All of this comes on the heels of recent partnerships announced by Google and an intensively increased open source focus by AWS to better each of their own respective revenues.  As all the major cloud vendors continue to fight for their piece of the cloud, it becomes obvious that it is the consumer that suffers the most in all these changes. Some businesses will focus on increasing efforts around a single vendor, while others may opt for a more hybrid approach.  Others may even delay movements until they feel more comfortable with their choices. Organizations will need to evaluate on what is the best and most cost-effective solution for them. While there are many firms that present a view that all cloud vendors are the same, companies who continue to invest substantial amounts of money and time must select the vendor that will best support their needs. Cloud adoption, digital transformation, innovate practices, and progressive technologies have key components that may impact selection criteria. Companies that wish to capitalize on the cloud are highly recommended to partner with a firm that can help lead them through the complex journey of cloud adoption. The cloud continues to drive technology at a lightning pace. Proper selection and accurate planning are critical to any company that wants to survive in modern business.

“Companies that wish to capitalize on the cloud are highly recommended to partner with a firm that can help lead them through the complex journey of cloud adoption.”

The changes to licensing terms by Microsoft will also put pressure on organizations using VMware in AWS who were previously able to “bring your own license” to the cloud.

This isn’t the first time Microsoft has issued changes to its licensing programs this year, and in a previous change asking resellers to pay for the use of Microsoft software Microsoft did reverse the change after facing significant pressure from its partners.

Overall, this adds to the complex technology environments that technology team leaders have to manage as they make business critical decisions around cloud adoption. A special thanks to one of Veracity Solutions subject matter experts – Lonnie Buchanan – for his contributions to this article. Lonnie has extensive experience in Healthcare and other industry verticals as an IT leader making decisions around these types of technology issues.

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