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Microsoft aims to ease EU concerns with cloud licensing changes

New hosting and outsourcing terms aim to reduce costs for European companies that run Microsoft services in rival data centres

Microsoft president and vice chair Brad Smith

Microsoft has announced changes to its software licensing terms that aim to make it easier to run the tech giant's software on cloud platforms in the European Union (EU).

The changes take effect from 1 October and exclude data centres run by Amazon Web Services, Google Cloud and Alibaba, as well as Microsoft Azure, in a bid to boost competition for smaller cloud service providers. 

The changes have come after complaints made against the tech giant by its EU-based customers suggested its licensing terms made it more expensive to run Microsoft services in competing data centres, such as those run by Amazon Web Services or Google. 

Reports soon began surfacing that the European Commission had begun gathering information from Microsoft's EU customers to launch a formal investigation into the matter. Not long after Microsoft's president Brad Smith revealed changes to the company's cloud licensing within its "European cloud principles" blog post. These, according to Smith, were based on feedback from European cloud providers. 

Today, Smith has revealed a few more details about the changes and what they mean for Microsoft's EU customers. 

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"At Microsoft, we recognise the importance of a competitive environment in the European cloud provider market, in which smaller competitors can thrive," the company said in a blog. "It is therefore critical for us to remain mindful of our responsibilities as a major technology company."

The new licensing deals will allow customers to use their licenses on any European cloud provider that delivers the services to their own data centres. Customers will also be allowed to purchase licenses for just virtual environments so they do not have to buy additional physical hardware. This includes plans to make it easier to use virtualised Windows 10 and 11 desktops by eliminating the Virtual Desktop Application add-on license requirement for Microsoft 365 F3, E3 and E5. 

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