The company expands usage rights, launches virtual core licenses, and introduces the CSP-Hoster program to boost the cloud provider ecosystem.
Microsoft has announced a series of strategic changes to its licensing terms and hosting programs designed to facilitate customers in migrating their workloads to partner clouds and foster new business opportunities for cloud solution providers. These updates, which began implementation on October 1, 2022, and will continue through 2023 and 2024, are a direct response to requests from the partner ecosystem.
More Flexibility for Bringing Software to Partner Cloud
One of the standout changes is the flexible virtualization benefit, allowing customers with subscription licenses or Software Assurance to use their licensed software — including Windows 11, SQL Server, or Microsoft 365 — on the infrastructure of any cloud provider, except for the so-called “Listed Providers” (Amazon Web Services, Google Cloud, Alibaba Cloud, and Microsoft itself). This represents a significant opening for cloud partners looking to offer more customized and competitive solutions to their customers.
Windows Server Licenses by Virtual Core
In line with this flexibility, Microsoft has introduced a new virtual core-based licensing model for Windows Server. Until now, licenses were calculated based on the number of physical server cores, complicating adoption in shared environments. With this new approach, customers will only need to license the virtual cores used in virtual machines, streamlining the migration of legacy workloads from on-premises servers to more flexible cloud environments.
Simplification for Virtualizing Windows 10 and 11
Another important advance is the removal of the requirement for additional licenses for users of Microsoft 365 F3, E3, and E5 who want to virtualize Windows 10 or 11 on their own servers or those of a cloud provider (excluding Listed Providers), even if their primary device does not have an operating system qualified as Windows 11 Pro. This measure reduces licensing complexity and expands virtualization possibilities for businesses of all sizes.
Long-Term Price Stability
In response to partner demand, Microsoft has introduced the option to sell cloud solutions with one- or three-year subscriptions, offering long-term price stability on products like Windows Server, SQL Server, and Remote Desktop Services (RDS). Additionally, new monthly billing options for annual contracts have been added, improving financial flexibility for customers and partners.
Launch of the CSP-Hoster Program
One of the most anticipated updates is the new Cloud Solution Provider – Hoster (CSP-Hoster) program, which allows partners to pre-build hosted solutions (desktop and server) that they can sell alongside licenses or as BYOL (Bring Your Own License) solutions. Unlike the program it replaces, QMTH (Qualified Multitenant Hosting), CSP-Hoster provides a centralized catalog of Microsoft software and eliminates the need to acquire individual media or keys per customer. At launch, it is available for Direct Bill CSP partners with active SPLA contracts, with a planned gradual expansion.
Changes to the SPLA Program
Microsoft has also clarified the use of the SPLA (Service Provider License Agreement), whose original purpose was to allow partners to offer hosted services from their own data centers. Starting October 2022, SPLA partners can no longer host their licenses in listed providers’ data centers. Affected partners have until September 30, 2025, to transition.
Boosting the European Cloud Ecosystem
These changes follow the commitment announced by Microsoft in May 2022 to support European cloud providers with more favorable terms. The modifications are global in scope and reinforce the role of local partners against large global platforms.
With this new strategy, Microsoft aims to strengthen its cloud partner ecosystem, promote a more competitive environment, and give customers greater freedom to choose how and where to run their applications. By simplifying licensing models and opening new avenues for building and selling cloud solutions, the company provides a solid foundation for the next phase of growth in the hosting and infrastructure-as-a-service sector.
Source: Microsoft Partners