Last week, Microsoft changed policy, finally allowing customers to use Microsoft 365 from Amazon WorkSpaces. Amazon shouted the news from the rooftops.
At the risk of looking a gift horse in the mouth, this is a stunning reversal of a licensing limitation that Microsoft has had in place since October of 2019. The limitation was seemingly put in place to restrict Office 365 usage at key competitors, but it has yet to be legally challenged.
Since 2019, Microsoft 365 has supplanted Office 365 as the vendor's productivity bundle.
Per Microsoft's announcement:
Beginning August 1, 2023, users with specific licenses may run Microsoft 365 Apps for enterprise/business, 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.
With this announcement, Microsoft lifted a very specific part of a broader set of limitations that has served as a point of frustration for vendors and customers alike.
History of Microsoft's licensing restrictions
In August 2019, Microsoft stated that on October 1, 2019:
- Office 365 subscriptions could only be deployed into the cloud via dedicated server environments at "Authorized Outsourcers" or in shared environments via Qualified Multitenant Hosters (QMTH), as long as the outsourcer or QMTH partner was not a "Listed Provider." Customers that wanted to run Office in locations that didn't comply with this new policy had to purchase Office as perpetual licenses, without the additional features of Office 365.
- Windows desktop operating systems -- and other components, such as SQL Server -- could also only be deployed to dedicated server environments that were not Listed Providers. In the case of Windows desktops, those who wanted to deploy to Listed Providers or to shared environments would need to pay for "license mobility," which really amounts to purchasing a Virtual Desktop Access (VDA) license.
As usual, Microsoft licensing interpretation is in the eye of the beholder, and if you ask 10 different people a Microsoft licensing question, you will get 11 different answers. However, here is some unambiguous language that specifically excludes Listed Providers from being able to provide Office or Windows. Those Listed Providers, in a document maintained by Microsoft and dated October 2019, are as follows:
- Microsoft -- more clarity on this further along.
There is also a note that says any service running on a Listed Provider is also subject to this policy, and it specifically cites VMware Cloud on AWS as an example. Effectively, it meant that the only way to run Office 365 was either on premises, from a cloud that's not a Listed Provider or -- and this is where the eyebrows start to rise -- on Azure Virtual Desktop. This final option involves a different licensing path that's not affected by this policy.
How can Microsoft be on the list?
It seems counterintuitive that Microsoft should be on the list of excluded providers. My only possible explanation is that, by placing themselves on the list at the same time as creating another way to use Office 365 from the cloud -- via Azure Virtual Desktop -- that customers get as part of an enterprise agreement, Microsoft can say, "We excluded ourselves, too," while at the same time onboarding people into their new ecosystem.
This policy, and the caveat that any services running on a Listed Provider were also affected, means that other services, such as Azure VMware Solution -- which is effectively vSphere as a service, delivered by Microsoft -- are also not able to run Office 365 or Windows desktop OSes. That is, they aren't able to run without paying the license mobility fee, which is effectively just a VDA license in addition to your E3/E5 license.
Despite Microsoft being on the list, they still created a path that makes Azure Virtual Desktop the only place to go for customers who want to use Windows desktop operating systems, Windows multi-session and Office 365.
Back to Amazon WorkSpaces
Microsoft appears to have walked back one very specific angle of its licensing policies: Amazon WorkSpaces seems to have been carved out of the Listed Providers. What that means for the other Listed Providers remains to be seen, including non-WorkSpaces AWS workloads. For example, what does that mean for VMware and Citrix environments that want to run on VMware Cloud on AWS?
It does appear that software using WorkSpaces Core is included in this, which could be great news for partners such as Leostream, VMware, and Workspot that are working with AWS today.
It's also worth noting that all the other licensing stipulations are still in effect with AWS and Microsoft. Windows Server instances can run on shared hardware with licensing built into the Amazon WorkSpaces subscription cost, while Windows desktop OSes are bring your own license (BYOL) and must run on dedicated hardware.
Why this change, and why now?
This is a huge deal, for sure. But now it seems as though Microsoft is picking and choosing who it works with and who it doesn't. To me, the real question is, "Why did they make that change? And why now?"
Could the heat have been on? Google and AWS, as well as independent groups like the Coalition for Fair Software Licensing, are attempting to shine a light on unfair practices across the industry, and it may be gaining traction among themselves and customers. One guess is that Microsoft's hand was forced by some large customers, perhaps under the threat of a lawsuit that could force Microsoft to explain these license policies in a way that didn't make them seem anti-competitive.
From intel based on industry conversations, the other Listed Providers are still playing by the old rules, though that could change. Perhaps the number of disenfranchised customers hasn't hit a critical mass to force a broader change. But the other companies listed -- or a partner of theirs like VMware -- should be waving their hands wildly, asking when each of their platforms and customers are next. It's also worth noting that this announcement does nothing to provide relief for customers that are paying for Windows VDA licenses when running desktops in Listed Providers and not in Azure Virtual Desktop.
Nevertheless, the key takeaway: This is a good thing for AWS and Amazon WorkSpaces customers, and it levels the competitive landscape a tiny bit. There is a long way to go, but it gives hope that things may open up a bit more in the future.
Enterprise Strategy Group is a division of TechTarget. Its analysts have business relationships with technology vendors.