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Microsoft Licensing Update – June 2024

This post is part of a regular communication that Invero provides to its clients to keep them updated on changes to the complex landscape that is Microsoft licensing. We provide even deeper insights and hands on guidance to our customers who purchase their licensing through our Cloud Solution Provider (CSP). Our licensing experts are available to answer your questions if you want to contact us.

In this month’s update, we highlight key changes around Microsoft 365 and Azure.

Microsoft 365 Updates 

Effective April 1, 2024 Microsoft has made significant changes to their O365 and M365 bundles and Teams.  Due to competition concerns in European markets, Microsoft has introduced O/M365 bundles without Teams included and an Enterprise level Teams stand alone license.  This will primarily only impact new customers to Microsoft 365 licenses.  Existing customers will be able to renew and increase the quantities of their existing M365 licenses.  This change impacts the M365 E3/E5 and O365 E1/E3/E5.  The business premium and F level skus will have an option without Teams, but those bundles will still be offered with Teams for all customers still.  There is also a price impact for this change.  The bundles without Teams have dropped in pricing by  

Two things to note on this change: 

For customers that like to add licenses in a self-service motion, please be aware that there are now even more licensing options to choose from, the new bundles include (no Teams) or (without Teams) in their descriptions, and the legacy bundles include wording around them being for existing customers.  Extra attention is recommended. 

There is still some discrepancy in the documentation on how this will impact customers moving licensing from one type of agreement to another, and whether they are considered “existing customers”.  If your organization is considering moving from EA into CSP or vice versa and are concerned about how these changes will affect your licensing and costs, let’s talk about this! 

More information and FAQs can be found here – Realigning global licensing for Microsoft 365 

Microsoft is constantly updating their M365 bundles, adding in new, changing or merging exiting ones and retiring features/workloads. Some of the changes include: 

  • Clipchamp – this is used for editing videos and is included for M365 E3 and E5 users. 
  • Microsoft Editor Premium features – this is now included in O365 and M365 E3 and E5 users.  Adds these features: Advanced grammar, Clarity and conciseness, Contextual speller, Inclusiveness, formal language, text prediction, sentence rewrites, similarity checker, synonyms. 
  • Loop and Loop components – this is a new productivity and collaboration tool that integrates its components with the rest of the M365 suite.  Functionality is included in O365 licensing, full features require the M365 E3 or higher licensing.   
  • Planner – the new Planner is the combination of To-Do, Project for the web and Tasks.  The basic functionality for Planner is included for M365 users, with the advanced features requiring a Project P1/P3/P5 license.  Project P1 is being rebranded as Planner P1.  

Azure Licensing Related Updates 

Last year Microsoft had announced changes to the ability to exchange reserved instances, which was supposed to come out of a grace period on July 1st.  This has been retracted and there will still be the ability to exchange reserved instances going forward.  Microsoft has stated in their documentation that there is currently no charge associated with cancelling RIs, but in the future there could be a 12% penalty, so perhaps this change to the exchanges means that reintroduction of the 12% penalty is looming. Managing reservations can be complicated and confusing, hopefully regaining the ability to make exchanges without having them count towards the 12-month maximum will allow for some more confidence while buying reservations.  

With Microsoft Fabric going into general availability earlier in 2024, Microsoft has announced that by the end of 2024 they will be retiring per capacity licensing of Power BI Premium. Existing customers with active agreements can use their current licenses until the end of that agreement. There are large instances of Fabric, the N64 nodes and above, that will include consumption rights of distributed Power BI Pro dashboards, similar to the Power BI Prem capacity included and these Fabric instances will include the ability to be turned off when not in use so this could be more cost effective for customers.  Thinking of implementing Fabric but aren’t sure what the costs will be, what licenses are required or how to get started?  Reach out and our team of both licensing and data specialists would be happy to assist.  

As SQL Server 2014 hits end of extended support in July, if you still have some instances of SQL 2014 in your environment that cannot be upgraded to a newer version, it is time to start thinking about how to protect those databases. Microsoft will be offering Extended Security Updates for SQL 2014 for up to three years starting in July 2024. There was a new option for ensuring those servers obtain extended security updates that allows for month-to-month commitments. The previous option of adding licenses on an enterprise agreement still exists for larger customers, but if you do not have an EA or if you do not want to commit to a full year of ESU, then you can now enroll those servers into Azure Arc to get the extended security updates.  This will trigger monthly charges on your Azure consumption billing for these servers, but the good news is that you can drop off the ESU at any time and stop paying for it.  There is still the requirement to back date the ESU to the beginning of the program, that will be part of the first monthly invoice, but once servers are able to be upgraded, they can drop the ESU and the associated costs.  As with the previous ESU offerings, there is also the option of getting them for no additional charge when you migrate your workloads into Azure.  Give the Invero team a call if you would like more information on the ESU licensing program or Azure Arc.