On Microsoft: a leopard never changes its spots

Changes in Microsoft behaviour. A leopard showing its fangs
Changes in Microsoft behaviour are not expected
Changes in Microsoft behaviour? Old habits die hard

On its most recent issue, The Economist posts a revealing article about Microsoft under Nadella. In particular, it has some harsh observations about a persistent culture that has also infected its cloud business:

Up to now Microsoft let customers use its software on dedicated servers run by AWS or any cloud provider under a practice called “bring your own licence” (BYOL). That freedom enabled easy switching. Of all cloud-based Windows software, 57% runs on AWS; nearly twice as much as on Azure.
Last summer Microsoft did away with BYOL and introduced restrictions for customers wishing to put its software on certain big clouds. If a client wanted to run desktop and server programs on those clouds after October 1st, it would have to buy a new subscription, rather than a one-off licence. Not to offend antitrust rules Microsoft put Azure on its list alongside AWS, GCP and Alibaba Cloud. But it separately offered customers a better deal to move to Azure, offsetting the extra cost.

Old-school Microsoft

Competitors and independent experts share their views about these changes:

Amazon said Microsoft was trying to restrict what clouds companies can use. Several neutral observers concur. “Microsoft is taking its arsenal of Windows Server, a massive installed software base, and using it punitively against competitors,” says Raj Bala, Gartner’s main cloud-infrastructure expert and author of its cloud ranking.

It is the antithesis of Mr Nadella’s more open strategy, adds Wes Miller of Directions on Microsoft, a research firm. After all, he had eased Office’s move to non-Windows devices such as Apple’s iPad. “Satya wants to make people think he’s different, but he’s old-school Microsoft, just with a little softer exterior,” sums up an executive at a rival.

Sorry, but you made your choice

It is no surprise then that existing customers regret the strategic choices they made in their cloud adoption strategies. Some fear or even face grave consequences:

Since the licensing changes went into effect Gartner has received several hundred inquiries about them. An executive from a Fortune 500 health-care company that had picked AWS as its cloud provider says that the new rules meant an extra annual cost of $100m, forcing the firm to slow down its transition to the cloud.

“They are writing licence terms to get customers to believe their only choice is Azure,” complains a vice-president of a medium-sized firm in Wisconsin that felt forced to switch from AWS. “There is no law against it but it removes choice,” he adds. An IT chief at another midwestern firm likens the new rules to a long lease on a car where “the lessor says you can only use Chevron gas, not BP or Exxon”.

Two of these three customers are set on writing Microsoft software out of their stacks over time.

Choose wisely, when you shift to the cloud

Azure is like a rocket, its fuel being the massive Windows installed base. It uses this fuel to move customers to Azure. Then it will lock them into a new web of complex dependencies, ever changing bundling practices and license terms. However massive this fuel tank is, it is finite and the rocket will run out of fuel at some point. Because this approach is not the way to build a lasting relationship based on trust. However, you can trust that this leopard will never change its spots.

Read more about Microsoft’s spots in our blog post on “Covid-19 vaccine & side effects in software and how to avoid them

Are you interested to discover how we can help you (re)evaluate certain options when shifting to the cloud? Get in touch and send us a message.

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