On October 1, 2019, we’ll modify our licensing terms related to outsourcing rights and dedicated hosted cloud services. This change won’t impact the use of existing software versions under licenses purchased before October 1, 2019.

Currently, our outsourcing terms give on-premises customers the option to deploy Microsoft software on hardware leased from and managed by traditional outsourcers. The emergence of dedicated hosted cloud services has blurred the line between traditional outsourcing and cloud services and has led to the use of on-premises licenses on cloud services. Dedicated hosted cloud services by major public cloud providers typically offer global elastic scale, on-demand provisioning and a pay-as-you-go model, similar to multitenant cloud services.

As a result, we’re updating the outsourcing terms for Microsoft on-premises licenses to clarify the distinction between on-premises/traditional outsourcing and cloud services and create more consistent licensing terms across multitenant and dedicated hosted cloud services. Beginning October 1, 2019, on-premises licenses purchased without Software Assurance and mobility rights cannot be deployed with dedicated hosted cloud services offered by the following public cloud providers: Microsoft, Alibaba, Amazon (including VMware Cloud on AWS), and Google. They will be referred to as “Listed Providers.”

These changes don’t apply to other providers and there will be no change to the Services Provider License Agreement (SPLA) program or to the License Mobility for Software Assurance benefit, other than to expand this benefit to cover dedicated hosted cloud services.

Options for licensing Microsoft products

We’re committed to making Microsoft software available to customers across all environments. Beginning October 1, 2019, customers can license Microsoft products on dedicated hosted cloud services from the Listed Providers using the options below:

Frequently asked questions

Q: What products are included in this licensing change?

A: All on-premises software available through Microsoft volume licensing as of October 1, 2019, are included in the outsourcing terms change.

  1. What are some examples of dedicated hosted cloud services from the Listed Providers?
  2. Some examples include Azure Dedicated Host, Amazon EC2 Dedicated Hosts, VMware Cloud on Amazon Web Services (AWS), and single tenant nodes from Google. In addition, solutions on such Listed Providers are included.

Q: We currently are running server workloads on one of the Listed Provider’s dedicated hosted cloud services. What do the updates mean for us?

A: The outsourcing updates don’t impact your right to deploy existing licenses on a Listed Provider’s dedicated hosted cloud services. You can continue to deploy and use software under your existing licenses on Listed Providers’ servers dedicated to you; however, you will not be able to add workloads under licenses acquired on or after October 1, 2019. After October 1, 2019, you will be able to use products through the purchase of cloud services directly from the Listed Provider or, if you have licenses with Software Assurance, they can be used with the Listed Providers’ dedicated hosted cloud offerings under License Mobility or Azure Hybrid Benefit rights.

Q: We use one of the Listed Provider’s dedicated hosted cloud services and need to license more Microsoft software before October to cover our expanding workloads; how do we do that?

A: The changes don’t apply to licenses purchased before October 1, 2019. Work with your usual Microsoft partner or account team for help in this scenario. If you have questions, please contact your Microsoft representative.

Q: What happens when we renew our Software Assurance or upgrade to new versions after October 1, 2019?

A: Software Assurance renewal doesn’t affect your perpetual use rights for existing versions. If you upgrade to a new version released on or after October 1, 2019, you must deploy that new version under the updated outsourcing terms.

Q: What if we are running on a cloud provider other than these Listed Providers?

A: These changes don’t apply to deployment and use of licenses outside of a Listed Provider’s data center.

Q: Do the changes apply to third-party offerings on a dedicated hosted cloud service?

A: Yes, the changes apply to both first and third-party offerings on a dedicated hosted cloud service from a Listed Provider.

Q: How does this apply to our Windows Enterprise licenses deployed on a Listed Provider’s dedicated hosted cloud services?

A: You can continue to use Windows Enterprise under your current Software Assurance coverage or user subscription licenses; however, at renewal, your option to deploy Windows Enterprise on a Listed Provider’s dedicated cloud services will require VDA E3/E5 (per user). As an exception, customers renewing Windows Enterprise SA coverage or E3/E5 subscriptions between October 1, 2019 and October 1, 2020 will have until October 1, 2020 to move their existing Windows Enterprise workloads off Listed Providers’ dedicated cloud services.

Q: How does the Azure Hybrid Benefit work for Windows Server/SQL Server licenses on Azure Dedicated Host?

A: Customers can use the value of their existing Windows Server and SQL Server licenses with Software Assurance, or qualifying subscription licenses, to pay a reduced rate on Azure Dedicated Host using Azure Hybrid Benefit. Windows Server Datacenter and SQL Server Enterprise Edition customers get unlimited virtualization (deploy as many Windows Server virtual machines as possible on the host subject to the physical capacity of the underlying server) when they license the entire host and use Azure Hybrid Benefit.  All Windows Server and SQL Server workloads in Azure Dedicated Host are also eligible for Extended Security Updates for Windows Server and SQL Server 2008/R2 at no additional charge. Find more details here.

You can find additional Frequently Asked Questions here