A Microsoft office.
Photo: Matthew Manuel on Unsplash

Microsoft’s poetic licensing days may be numbered

Protocol Enterprise

Hello and welcome to Protocol Enterprise! Today: why Microsoft might be forced to make key changes to Windows and Office licenses, where C3.ai draws the line on working with military customers, and the chip industry’s wafer-thin margins for error.

Spin up

So many cybersecurity incidents can be chalked up to bad design, configuration mistakes or poor controls over access to SaaS resources. Of the 43% of companies that said they encountered security problems due to a SaaS misconfiguration, 34% said they lacked visibility in the status of changes and 35% said too many employees had the ability to make security changes, according to research released by Adaptive Shield.

Redmond blinked

Microsoft has been almost daring U.S. and European regulators to take a closer look at its business in recent years by flaunting its power in the enterprise tech market, a market that just never seems to register with competition authorities the way shenanigans in consumer tech markets do. That might have just changed.

Bloomberg reported Monday that Microsoft plans to make unspecified concessions to the way it licenses its software, including Office and Windows, for customers that want to run it on other cloud providers. The changes come after European competition authorities responded to complaints from French cloud provider OVH by asking Microsoft to provide more details about its licensing practices, which encourage customers to run Microsoft software on its Azure cloud service.

  • Microsoft is unique among the major cloud providers in that it has an extensive history in enterprise software dating back to the earliest days of the internet, and there are countless businesses around the world that built tech operations around the old-school licensed versions of Windows and Office.
  • The modern business world is, of course, in the process of shifting to cloud services rather than building and maintaining their own servers and networking infrastructure in order to run all the software they need to operate.
  • But there are some businesses who would like to keep their Office licenses and Windows apps and manage that software themselves on another cloud, and Microsoft does not make this easy.

Back in 2019 Microsoft made some changes to the way it licenses Office and Windows for other clouds, according to the report.

  • It flat-out barred customers from running their own copies of Office (as distinct from Office 365, which is managed by Microsoft) on AWS or Google Cloud.
  • It also made it prohibitively expensive to run the Windows Server operating system on anything but Azure.
  • If one of those customers wanted to use Amazon Workspaces to run virtual desktops using Office, they were out of luck.
  • And companies that rely on Windows Server apps for critical business functions but wanted to further a relationship with AWS or Google Cloud already faced additional licensing costs to run those apps on any cloud other than Azure, which surfaced in mid-2019 as the January 2020 end-of-support deadline for Windows Server 2008 approached.

Licensed software packages often come with end-of-support deadlines to encourage customers to move on to new releases, which are generally more performant and secure, but those deadlines serve double duty as threats.

  • Companies operating in strictly regulated environments can run into serious problems if they are not compliant with software licenses, even lame anticompetitive licenses.
  • Likewise, few companies can afford to operate without technical support for products so core to their daily workflow.
  • Some customers have been able to negotiate extensions to licenses signed before the 2019 changes, according to Bloomberg, but in practice only big spenders will be able to pull off that kind of trick.

As always, the devil will be in the details of the proposed changes that Microsoft said would be coming to its licensing programs. It does not sound like those changes were in the company’s near-term plans until Bloomberg started asking questions about OVH’s complaints.

— Tom Krazit (email | twitter)


M&A and workforce reorganization can create a wealth of opportunities for companies seeking rapid growth, transformation and market expansion. In fact, 47% of executives say pursuing corporate M&As, joint ventures and alliances is their top growth driver in 2022. Unfortunately, nearly half of executives say talent acquisition and retention challenges are the biggest obstacle.

Learn more

Where C3.ai draws the line on military work

C3.ai’s outspoken CEO Thomas Siebel often touts the company’s defense industry work, but there are some military applications the company just won’t touch. One is building fully autonomous weapons that do not require a human to make the ultimate decision to press the button or pull the trigger.

“Yes, we’re asked to do things that I would consider to be unethical,” Siebel said during a recent talk on the “Eye on AI” podcast.

Siebel recalled a defense agency project employing deep learning for identifying targets. He said that until it was clarified by the military agency customer that it wanted an AI-based system that involved a “human-in-the-loop” — or a person involved in the ultimate decision-making and triggering process — the company was not interested in the project.

The project went forward once the agency affirmed they wanted a person to pull the trigger, rather than the software itself.

“When you’re informing a human being, I think you’re in the area of ethical AI,” Siebel said.

— Kate Kaye (email| twitter)

Upcoming at Protocol

It’s been almost six months since Congress passed the landmark $1 trillion Infrastructure Investment and Jobs Act. What progress toward those goals have we seen so far — and what can we expect in the next six months? In this Protocol virtual event on April 21 at 9 a.m. PT, we will explore how the infrastructure bill rollout is going and what it means for you.

Join Protocol’s Issie Lapowsky in conversation with Alan Davidson, assistant secretary for Communications and Information, U.S. Department of Commerce; Nicol Turner Lee, senior fellow and director of the Center for Technology Innovation, The Brookings Institution; and Angela Siefer, executive director, National Digital Inclusion Alliance. RSVP here.

Nil wafers

Of the raw materials needed to manufacture chips, the silicon wafers they are printed onto are one of the most important — and there may not be enough of them to satiate the projected appetite for the thin discs until 2024, according to research firm Techcet.

Much like the rest of the chip industry, wafer producers in Japan, South Korea and elsewhere have grown at a breakneck pace over the past two years. Techcet data indicates the market will expand 14.8% to $15.5 billion in 2022.

But all that growth has left supply tight, and there isn’t excess capacity in the market, let alone what’s needed to fulfill projected demand for the next two years, Techcet said. For the big wafer suppliers to build new factories will take two to three years, and until that happens prices are likely to rise.

— Max A. Cherney (email | twitter)

Around the enterprise

KKR agreed to purchase Barracuda Networks for an undisclosed amount from enterprise private equity’s most popular (or feared) company, Thoma Bravo.

Box announced Box Canvas, a new product that aims to jump on the digital whiteboard collaboration tool market spearheaded by Figma and Miro as Box continues to look for new sources of growth.


ProEdge can help you conduct a skill gap analysis across your organization and gain insights you can leverage to develop forward-looking plans while taking into account the needs of the entire enterprise, including individuals, teams and functions. In an M&A scenario, an upskilling program like ProEdge can also be used to uncover employees’ skills that weren’t utilized before

Learn more

Thanks for reading — see you tomorrow!

Recent Issues