Microsoft still prohibits Google or Alibaba from running O365 Windows Apps

Almost a month after AWS concession, Redmond keeping mum on reason for locking rivals out

Customers and sellers of virtual desktop infrastructure remain frustrated that Microsoft continues to lock out Google and Alibaba from running Office 365 Windows Apps on their cloud platforms, weeks after Redmond made concessions for AWS.

From October 2019, Microsoft complicated the licensing picture for many by classifying its three major rivals as Listed Providers, meaning customers had to fork out for new licenses to run the wares in those clouds. In the case of Office 365 Windows Apps were actually prohibited from being hosted by the trio*.

Earlier this month, Microsoft decided to tweak the rules, saying end user computing customers with certain licenses would now be able to run Microsoft 365 Apps for enterprise, Microsoft Project, and Microsoft Visio on Amazon Workspaces.

"The licenses that will be eligible under this revised policy include Microsoft 365 E3/E5/A3/A5 and Microsoft 365 Business Premium. If you currently have any of these licenses, starting from August 1, you will be able to utilize these Microsoft applications on Amazon WorkSpaces virtual desktop infrastructure," it said.

Yet there is still no indication that Microsoft will apply those same changes to Google Cloud Platform or Alibaba. We asked Microsoft to comment on Wednesday.

We talked to numerous interested parties who spoke on the condition of anonymity, companies that are close to both Microsoft and its rivals. One said of the licensing lockout: "There's absolutely no technical reason. It is purely commercial."

"It's just a couple of lines in a Microsoft licensing agreement which says you can't run it on GCP or AWS, no good reason because you can run it on Apple devices, Android devices, PCs, Macs on Azure on-prem datacenters, but can't do it with GCP or Alibaba.

"Microsoft have their own solution, Windows 365 and Azure virtual desktop, and they are competitive products to us, so in a market essentially what they're telling customers is, 'If you have a security concern with Windows, you want to run it in a datacenter in a cloud,' but the only choice you have is Azure."

Customers wanting to run Windows Client or Office in GCP, Alibaba or AWS must buy additional licenses. Google, AWS, and many others have complained about this, with CISPE even filing a complaint with the European Commission.

"It becomes more expensive to run Windows on any other cloud," said a source. "That's a cost but this one [on prohibition] is egregious because it just says you can't do it."

What are customers saying to these suppliers about the cloud setup? Some decided to postpone the decision, others "reluctantly" went with Azure, and others "want to fight Microsoft," said a VDI supplier.

The solution to this? "Simple. Strike those lines from licensing agreement and we're good."

In May, Microsoft talked about how it was making it easier for customers to bring its software to channel partners' multi-tenant servers and more conveniently license virtual machines for Windows Server.

"All the growth is happening in hyperscale. Cloud computing. It's not happening in smaller managed service provider," the VDI source said. "80 percent of the growth is with hyperscalers, nobody's running stuff in their own datacenters anymore. It seems outrageous that Microsoft would be able to 'play favorites' and arbitrarily only allow AWS to run O365, but that appears to be the case for now."

We have asked Google and Alibaba for comment.

Wes Miller, analyst at Directions on Microsoft, said it is "unclear" why Microsoft made the change for AWS and not the two other Listed Providers.

"I'm not privy to what transpired to get the change made – but I can say we regularly hear about customers running on Amazon WorkSpaces, and not so much about VDI on Google Cloud Platform or Alibaba. So it may come down to the number of affected customers, the distinct volume of customers, the length of time that WorkSpaces has existed… it's hard to say," he told The Register.

"I do think it's unfortunate to create this one carve-out and not re-enable Office on VDI on GCP and Alibaba. I'm hopeful that at some point down the line Microsoft fixes this, and enables it for the other two partners, as there's no justifiable reason why you can run Office on Azure (under the best licensing option), on Amazon (on more expensive licensing, but it's permissible), but not on the other two Listed Providers."

Still a problem for Amazon – analyst

Michael Silver, Research VP at Gartner, had some advice for customers: "First, note that the Amazon/Microsoft deal looks to be specific to Amazon WorkSpaces and does not allow third-party solutions to run compliantly. So solutions from Citrix, VMware, etc. are still not compliant in terms of running the M365 Windows applications on AWS. I don't believe Google has a similar service and I don't know about Alibaba.

"The overall issue is still a problem for all Listed Providers including Amazon, based on the limits of the new rights. Customers should still be lobbying Microsoft to eliminate the Listed Provider limitations."

Ryan Triplette, executive director of the Coalition for Fair Software Licensing, opined: "The news that Microsoft will allow a limited number of 365 customers to use AWS Workspaces is far too small of a step to suggest that Microsoft is serious about doing the right thing. Instead, it confirms that there are no technical reasons behind Microsoft's decision to continue to limit customer choice.

"Microsoft created inequities in October 2019 when they implemented software licensing terms to limit the ability of their customers to use licenses that they had already paid for on the cloud of their choice. Nothing short of rolling back these restrictions entirely is acceptable." ®


*Microsoft also included itself as a Listed Provider, which sources told us was so that Microsoft could claim the move was non-discriminatory, but Microsoft allowed customers to swap perpetual licenses for SaaS-based license for Azure.

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