Dive Brief:
- Microsoft will offer all enterprise customers separate Teams and 365 licensing options beginning April 1, the company announced Monday. The unbundling is part of a broader global licensing policy restructuring for the Microsoft 365 and Office 365 cloud-based business application suites and the Microsoft Teams collaboration tool.
- The company decoupled Teams from 365 in the European Economic Area and Switzerland eight months ago in response to an ongoing antitrust investigation into Microsoft software licensing practices initiated by the European Commission in July.
- Microsoft emphasized customer convenience rather than regulatory pressure in its announcement. “Globally consistent licensing helps ensure clarity for customers and streamline decision making and negotiations,” the company said.
Dive Insight:
Scrutiny of Microsoft’s licensing practices extended beyond the borders of the European Union last year.
The UK regulatory agency Offcom noted industrywide concerns when it referred the public cloud infrastructure market to the Competition and Markets Authority for further investigation in October.
The agency’s extensive report included a section on Microsoft licensing practices, singling out a 2019 policy change that “restricted the ability of certain customers to deploy licenses for some software products on non-Microsoft cloud infrastructure.”
Cloud looms large over the software scuttle, as Microsoft battles with its larger rival AWS for hyperscaler market share and both fend off Google Cloud’s emerging strength.
Software licensing headaches have become a cudgel for Microsoft competitors.
Google Cloud criticized Microsoft’s “complex web of licensing restrictions,” in a June response to the Federal Trade Commission’s call for public comment on cloud market competition. The junior hyperscaler made a more oblique reference to its competitor when it removed cloud data egress fees for some workloads in January.
“Certain legacy providers leverage their on-premises software monopolies to create cloud monopolies, using restrictive licensing practices that lock in customers and warp competition,” Google Cloud said in the announcement.
Microsoft joined AWS and Google Cloud on the path to free data egress last month.
The new Office enterprise software suites give customers several options. Subscribers can keep current bundles or purchase from an a la carte menu that includes the 365 packages, ranging from $7.75 to $54.75 per seat per month, and Teams Enterprise for $5.75 per seat per month.
The timing of the change reflects Microsoft’s piecemeal approach to regulatory scrutiny, Ryan Triplette, executive director of the Coalition for Fair Software Licensing, told CIO Dive, noting that the company is making changes where it feels the most pressure.
“This repeats a pattern where Microsoft responds originally to the explicit complaints inside the European Union and changes its practices there, then quite a bit later changes its practices around the rest of the world,” Steve Weber, professor of the graduate school at Berkeley School of Information, said in an email.
A Microsoft spokesperson elaborated on the company’s motives behind the unbundling move via email Monday.
“We are extending the steps we took last year to unbundle Teams from M365 and O365 in the European Economic Area and Switzerland to customers globally,” the spokesperson said. “Doing so also addresses feedback from the European Commission by providing multinational companies more flexibility when they want to standardize their purchasing across geographies."
