What you need to know about Microsoft’s public cloud licensing changes

 In Microsoft, Software, Volume Licensing

Microsoft announced upcoming changes to its licensing terms for dedicated environments within four public cloud providers: Microsoft, Alibaba, Amazon (including VMware Cloud on AWS), and Google.

If your organization is leveraging a bring your own license (BYOL) model to account for instances of Microsoft technology hosted in a dedicated public cloud infrastructure, you will need to understand how these changes impact your strategy and licensing options moving forward.

How are the licenses changing?

Microsoft licensing terms allow customers to use traditional software volume licenses without Software Assurance in any dedicated environment: on-premises, outsourced (hardware leased and managed by an outsourcing organization), and dedicated hardware hosted by a public cloud provider.

Soon, that will change.

Effective Oct. 1, 2019, you can no longer deploy on-premises licenses purchased without Software Assurance in dedicated hardware environments hosted by the aforementioned public cloud providers.

Instead, both dedicated and multi-tenant environments hosted within these providers’ datacenters will require active Software Assurance and License Mobility for Software Assurance eligibility – a requirement for multi-tenant cloud services, but not previously a requirement for dedicated environments – to leverage a BYOL strategy.

What if you purchase licenses before Oct. 1?

These changes will not apply to any licenses purchased prior to Oct. 1, 2019, and there will be no changes to the Service Provider License Program (SPLA).

Other Microsoft solutions that remain

For customers currently leveraging the BYOL strategy on dedicated hardware environments with these providers, Microsoft offers a number of solutions that may meet your needs, including:

  • Eligible on-premises licenses with active Software Assurance can be leveraged to license these dedicated instances through the License Mobility for Software Assurance benefit. This applies to all of the impacted cloud providers, as well as any provider who is an Authorized License Mobility Provider.
  • Eligible on-premises licenses with active Software Assurance can be leveraged to license instances deployed in a multi-tenant cloud hosted environment through the License Mobility for Software Assurance benefit. This applies to all of the impacted cloud providers as well as any provider who is an Authorized License Mobility Provider.
  • Eligible software can be included in the cost of cloud services through IaaS or PaaS offerings made available by any provider that participates in the SPLA or Microsoft Azure services.
  • Please note that Windows Server is not eligible for License Mobility with Software Assurance. Microsoft updated the Azure Hybrid Benefit in the August 2019 Product Terms to include “unlimited virtualization use rights for Windows Datacenter licenses covered with Software Assurance exclusively with Azure Dedicated Hosts.”

October will be here before you know it

If your organization currently leverages a dedicated cloud service from one of these providers, you need to be prepared for these changes. Don’t let this slip through the cracks.

To learn more about how this announcement affects your organization and your future strategy, contact your SHI account executive today.

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