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Comment by Traster | Hacker News Reader

Well this article doesn't seem very good. Not least because the author seems perfectly willing to not actually explain the detail, and then jump to conclusions.

Having read the actual detailed article what seems to be happening is that some customers buy "on-premises licenses" without mobility rights, and MSFT used to let them use those licenses on outsourced hardware. But people were using those licenses to just put their deployments on general cloud services- which is not what the license was intended for. The license was intended for fixed, outsourced bare metal hardware.

Basically, MSFT is just catching up to the fact cloud services exist and you're going to need a specific license if you want to run the software on the cloud. Now, apparently this author finds this surprising, but given that the license he's complaining about is an "on premises" license it sounds more like MSFT were being generous by letting customers use the licenses on outsourced hardware, and never intended it to be carte blanche for running your "on premises" license in the cloud - which is very obviously not on your premises.

What it sounds like is happening at the moment is Amazon is running a shit tonne of MSFT software without any MSFT licenses. Which sounds pretty cheeky to me.

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You seem to think simply re-stating the facts is enough to dismiss the article.

But you forgot to tell us WHY it is acceptable for Microsoft to charge their customers a premium for using their fully purchased licenses on a cloud provider of their choice rather than dedicated physical hardware. And why it is ok for Microsoft to create an artificial monopoly for these licenses via Azure Dedicated Host.

Microsoft sold licenses that could be used this way, customers used them this way, and now Microsoft wants to double-dip asking their customers to pay twice just to actually use their already owned licenses.

> What it sounds like is happening at the moment is Amazon is running a shit tonne of MSFT software without any MSFT licenses. Which sounds pretty cheeky to me.

That's not what is happening. People are buying Windows Server licenses and running them on compute that they rent from AWS. Until this change, that was completely inside the terms of Windows Server licenses (if for no other reason that they've been pushing hypervisor-based Windows Server virtualization for almost ten years).

Why is it okay for Nvidia to disable parts of a fully working chip in order to sell it as a more popular and cheaper part? Why is it okay for them to disable features in the PC vs Workstation drivers on the same hardware that you bought?

Why is it okay for Apple to legally restrict OS X from running inside a VM or on a PC?

Welcome to price differentiation.

applying price differentiation on a product that you already sold to double dip is pretty scummy

Perhaps, but that's not happening here. The Windows license change doesn't retroactively apply to existing licenses.

It does apply to existing customers as soon as they need to scale out. Well, unless they decide to pay down their tech debt and get out ASAP.

Maybe they shouldn't have used an on- premise lisence in the cloud in the first place

Maybe they should have used Wine in the first place.

Yeah, how dare they try to use the exact model they've been using for years, scaled onto rented hardware!

If one wishes to price like that, they do it from the start. We have more than enough history to show that you don't offer customers something for one price scheme and then change it in the middle to get even more money out of them. It doesn't work and only causes problems.

This applies to new licenses purchased starting in October. It's not "in the middle."

Just to clarify, Apple does allow you to run macOS inside VMs provided they are running on Apple hardware.

But yes, the EULA restricts running macOS on non-Apple hardware.

> Why is it okay for . . . .

It's not okay.

Yeah, pointing to annoying, anti-competitive, customer-unfriendly practices the happen to exist doesn't make them "okay". It only means companies aren't prohibited by law/contract from doing them. Only in that sense are they "okay"

Why is it not ok to disable some features on a device and sell it cheaper?

How is this anti-competitive? How is this customer-unfriendly?

Because giving something more to the customer would not cost them anything. There used to be this belief that things are worth as much as the cost to produce them + some margin for the maker. And things were made so they will benefit their consumers. Unfortunately more and more companies these days look for ways to get not what something is worth but to get from consumers as much as possible, to squeeze them like lemons.

It's a business decision which will make them more money.

In Universe A they sell only the most powerful version of the product for 1x price and them make some money.

In Universe B they sell the most powerful for 1x AND a slightly less powerful version for 0.9x price and they make MORE overall profit.

I'm not saying that's a bad thing. There are customers who will want to pay less and not need the most powerful product.

I fail to see how the company in Universe B is morally worse than those in Universe A. One could argue they are superior, in that they offer more choices.

If the less powerful costs the same to make and is just crippled full version, then for me it’s not ethical and calling it a choice is a farce.

Btw obviously I’m not talking about software. Im not talking about pricing things with no marginal cost.

"Moral" is a loaded word to throw in here. I wouldn't use that term. Customer-unfriendly etc. I think fit better. And if we're positing hypothetical universes, let's a Universe C: They give customers the faster version that doesn't cost them any more, and as a result they build more brand loyalty and good will, leading to more sales, market share, etc.

But profits are somewhat besides the point: I'm saying simply that some policies are not customer friendly. Whether or not you consider that to be good or bad may very well depend on whether you are a customer or a shareholder.

Exactly right. It is acceptable to argue that the pricing is too high and unfair. But to say the structure itself is wrong isn't correct.

Breaking up the total price of a product by it's component features and then creating variants of the sold product with certain features enabled vs disabled and hence having different total prices is one fair way of create products that are tailored to customers needs.

When pricing individual features, the prices may not correlate relative to each other. There may be factors like which features are most used by which segment of customers and how valuable the feature is to that segment customer and hence how much they are willing to pay.

Demanding that all the features should be sold at the lowest total cost doesn't make sense. We don't do this in any other domain.

Key error in your argument: "would not cost them anything."

Of course they would lose profit on the customers that would pay for X instead of .8X. "if i can buy the same hardware at 20% less cost why would I buy it at the full cost?"

This is not an error in my argument. You just do not understand what I mean by “customer-friendly(ethical)”.

> Because giving something more to the customer would not cost them anything.

Even if that were true, so what? Some customers are willing to trade less features for less money. It doesn't matter that other features are present but disabled. Those customers got exactly what they paid for. They're not getting cheaped out on.

One thing is trading features for money, the other is artificially crippling the product just so you can release a cheaper version. For what, to justify unreasonably high price for complete version?

The second part sounds kinda like “They don’t know they got screwed, so it’s completely fine”.

This is like the trolley problem of software licensing:

Scenario 1: Product has 3 features at x Price. New license is created with 4 features at price x+y

Scenario 2: Product has 3 features at x+y Price. Slimmed down license is created for a product 3 features at x price.

People applaud the former order, and cringe at the latter, but (at least in this artificial description, after the second option is available, the scenarios are equivalent. But something about loss aversion seems to trigger a moral sentiment.

They didn't get screwed. They paid for X features. That's not getting screwed. The fact that +Y features are turned off is of absolutely zero consequence.

The marginal cost is next to zero, but the cost is certainly not.

As to what something is worth, surely the cost of production is not the sole factor.

If you are pricing it at cost plus, yeah, it can be worth near-ish the cost of production. Not things with assosciated costs like rnd, but think some of spare parts, for example.

Cost of production is a big factor. Economic theory generally holds that in a competitive environment over a decent period of time, prices will fall to just about the marginal cost of production. Think of the commodification of the PC in the late 90's/early 00's. Highly competitive environment drove prices to just a hair over costs. However, at least one company, Apple, held a very customer-friendly stance (not to mention good marketing) and was able to charge a decent amount above that as a result. (In some ways the good marketing was spreading the message of their customer-friendly stance)

It's perfectly ok. There is no harm here. We do not need morality police for a voluntary business deal where you have complete freedom and choice to purchase a product.

Regarding Nvidia, is this just a straight disable of full-function chips? Some vendors will sell chips with reduced function because it permits them to sell chips with defects that disable only specific functions, where the rest of the chip is fine.

> ... is this just a straight disable of full-function chips?

> Some vendors will sell chips with reduced function because it permits them to sell chips with defects that disable only specific functions, where the rest of the chip is fine.

If one is able to get a less expensive, albeit less powerful, device for cheaper, is there any difference?

Right, take the Intel i486 chips. Intel sold 486SX, and 486DX chips, plus a 487DX. Now, as far as an end user was concerned, the 486DX was a CPU as you'd think of it today with integrated FPU (relatively novel at the time in desktop) the 486SX was missing an FPU (still fine to run workloads that were at the time predominantly integer only) and the 487DX was an upgrade to make your 486SX have an FPU

But that was never what was really going on, all these were the same CPU design, except that when yield rates for the FPU weren't so good Intel disabled it and sold those as the 486SX. When sales of the 486SX outstripped supply of dodgy FPU 486DXs Intel removed the FPU altogether from new ones. Meanwhile the 487DX wasn't "upgrading" anything, it just disabled the 486SX and replaced it with a full CPU.

So??

A customer is buying X features for Y dollars. It doesn't matter if certain other features are there and disabled, because that's not what the customer paid for.

Software does this all the time as well. Say you get the first three levels of a game for free. You have to pay to get an unlock code for all ten levels. Is it unfair that you really got the whole game for free and that you are being kept from accessing it unless you pay?

If you get the features you pay for, then the transaction was legitimate. Fin.

I don't think anybody's claiming it's illegal. Just questioning whether it's a smart move on Microsoft's part.

In my case, NVIDIA released a "bug" in the driver years ago which disabled the ability of Geforce cards to run in virtualized environments.

They have not addressed or fixed this "bug", and instead point consumers to their ridiculously expensive Quadro cards, which are prohibitively expensive not to mention overkill for most consumers.

This "bug" can be fixed in some hypervisors, for example in KVM, by spoofing certain system information.

Well, there's "okay" in the legal/contractual sense and there's "okay" in the customer-friendly, long term interests of the company. This move may be the former, but not the later, and MS seems to be banking on gaining more revenue for these licenses & switches to Azure than they lose when some customers decide to stick with AWS but move away from Windows. Either way, some group of customers, however small, will choose to move away from Windows, so their long term market share will be smaller. Is this "okay"? Depends on which way MS has placed its bets.

One thing this article gets right is that this seems to be a move back towards the good old "Where do we want you to go today?" Microsoft of yore.

My read on this is that this is really "price simplification". If you want to run Windows on the big public clouds, you used to have three options:

(1) rent a VM with a license bundled into the per-minute/per-hour rate

(2) bring-your-own-license on "dedicated hardware"

(3) pay for software assurance

Looks like Microsoft is now phasing out (2), so now basically anyone who isn't large enough to have software assurance has only one price: the all-inclusive per-vm per-hour/minute rate.

This is just whataboutism. Other companies doing bad things doesn't make Microsoft's bad things any less bad.

Well, it isn't okay for NVIDIA to try and charge me tens of thousands for a quadro card instead of just letting me virtualize my Geforce 1080.

In fact, it's so not okay, that I don't play ball and I use hacks to get my 1080 support virtualization and pass-through.

It's also not okay for Apple to restrict what hardware I can run their software with. I have run hackintoshes and OS X VMs.

I voice my support and concern for these vendors' policies appropriately by using my wallet. The policies you listed are not okay.

> In fact, it's so not okay, that I don't play ball and I use hacks to get my 1080 support virtualization and pass-through.

In fact, it's so not okay, that I don't play ball and buy Radeon. Vote with your wallet.

As I mentioned in a sister comment, it's far more nuanced than that. NVIDIA makes the better card for the money, so they get my hardware sales. That's where it ends, however, as I do not partake in their ridiculous licensing scheme. If and when AMD finally catches up, I have no problem making the switch. That is voting with my wallet.

That is not voting with your wallet.

Voting with your wallet would be not using anything from NVidia and Apple to start with, including the business opportunities it might entail.

> Voting with your wallet would be not using anything

That's RMS thinking. If you don't mind, I'll expand on it. Voting with your wallet includes not paying into third party workarounds because their existence depends on the bad actors to exist (in some cases).

I have read literature from Stallman essentially supporting piracy of closed-source, proprietary products without saying it directly. This is more impactful in the software realm where you are not still giving hardware sales, but that is his stance.

However, I think NVIDIA is still leading the industry (AMD is catching up fast, but still lags behind) and I want to support their hardware development. However, I make it clear what kind of relationship I expect from them by virtualizing my Geforce instead of buying a Quadro. I also support open-source driver initiatives and abhor NVIDIA's practice of not releasing hardware schematics if they aren't going to open source the driver. It's a complicated issue.

> But you forgot to tell us WHY it is acceptable for Microsoft to charge their customers a premium for using their fully purchased licenses on a cloud provider of their choice rather than dedicated physical hardware. And why it is ok for Microsoft to create an artificial monopoly for these licenses via Azure Dedicated Host.

Because they wrote and own the software you are interested in licensing. If you don't like the license, don't run the software.

Microsoft has the leverage that open source projects like Redis and Elastic wish they had on AWS (and why those open source projects are updating their licenses to combat AWS' profiting off of their work).

As someone else has mentioned, Apple restricts how and where you can run OSX/MacOS. I don't think thats going to stop people from using OSX/MacOS out of principle (typo corrected).

s/principal/principle/g

If they stop people making money from it, it's not open source any more.

If properly licensed, it’s still open source. Free as in speech, not as in beer.

According to most peoples definitions if you can't do what you please with it or make a derivative product and do what you please with THAT I cannot imagine why you believe its free as in speech anymore.

Are you arguing against a business being able to update their licenses, as they see fit, to adjust to major changes in the market? That doesn't seem reasonable.

As a consumer, if you don't like it, you can always migrate away from Windows.

It's acceptable because enough people are going to accept it.

Spend a bit of time using a FOSS stack and stop creating anything new on the legacy proprietary stuff, it will solve itself.

What irks me about this is I like to ride as close as I can to the fantasy of SDE == 8 hours of problem solving.

Meetings, sprint ceremonies, interruptions I've come to deal with as baggage that comes with the territory. But when I have to blow the dust off my olde Microsoft Licensing Nits and Pitfalls Tome and play license-lawyer again, that really sucks the life out of me.

Windows Server is a great product and I want to pay great money and use it without worrying about where in the cloud it's floating. Why even cut a distinction about what kind of machine is hosting your product, virtual or metal? Nevermind even talking about who owns that machine being an issue.

> Windows Server is a great product and I want to pay great money and use it without worrying about where in the cloud it's floating

If that's the case, just use the windows license that's provided to you when you spin up an instance with your cloud provider. This is only for people using dedicated instances.

its ok for microsoft to do anything they want with pricing. its ok for customers to complain about anything they want too.

It's worse than you're describing- Microsoft is charging one licensing price if you're on their cloud but another price if you're on someone elses. This anticompetitive behavior is what we expected from Microsoft in the 90s and early 2000s.

Yeah, they charge more if you're on their cloud.

Isn't that kinda the opposite?

What about the license makes Azure specifically cheaper? Does it call out Azure specifically?

Or rather, you can use the on-prem license in the cloud, but only on dedicated hardware?

If so, Azure Dedicated Instances would be able to use that form of the license, but why not AWS which also has a dedicated hardware option?

From the blog post[0]:

> Azure Hybrid Benefit for Azure only

[0]: https://www.microsoft.com/en-us/licensing/news/updated-licen...

Azure Hybrid Benefit is for licenses with Software Assurance. The change that the blog post keeps railing on about is for licenses without Software Assurance.

You say it like that and it sounds bad, but you say it like "Microsoft offers a discount if you bundle cloud and license spending" and it sounds pretty fair to me.

Goodness knows there are a lot of other cloud options than Microsoft. If you're tightly coupled with one vendor you're gonna be at their mercy.

When you have a monopoly on Y, it is not fair to offer a discount on a bundle of X and Y. The problem is not the general idea of a discount bundle, it's leveraging a monopoly to get more business in a different market.

Microsoft doesn't have anything even remotely resembling a monopoly on server OSes.

Is Microsoft a monopoly on Server operating systems? I’d say no, and not by a long shot. Even on Azure, Linux is more than 50% of their workloads.

If you're running nginx, no.

For most software deployed on a windows server, there is no compatible OS. There's no real choice.

To be fair, this affects the server market, where MS was never really a monopolist.

Can you name a business that doesn't offer you a discount commensurate to the amount you spend with them? Why wouldn't Microsoft give you a discount on your windows license if you're also using their cloud?

This practice is a form of "bundling" in the antitrust sense, and while it is not inherently illegal different rules apply to such behaviors if you've been found to have monopoly powers.

It is not - it would be if they had a monopoly, but they clearly don't in this case.

They do have a monopoly on Windows licenses, and they are trying to leverage that to sell cloud hosting of Windows servers, which they do not have a monopoly on. In this case Microsoft's defense would probably be "Windows is not the only OS available", which may or may not be accepted by a government (it's gone both ways for them in the past).

The right question is if Windows Server has a monopoly - and the answer is no. Even in Azure more then 50% of servers run Linux.

‘Well this article doesn't seem very good. Not least because the author seems perfectly willing to not actually explain the detail, and then jump to conclusions .. some customers buy "on-premises licenses" without mobility rights, and MSFT used to let them use those licenses on outsourced hardware’

Seems perfectly clear to me:

“Microsoft has introduced a preview of Azure Dedicated Host, which provides a physical server hosted on Azure and not shared with other customers.”, ref

Microsoft has introduced it's own dedicated hardware.

“Alongside this new service, the company has made licensing changes that will make Microsoft software more expensive for some customers of AWS, Google and Alibaba.”, ref

And made it more expensive for “running Windows Server on any cloud that isn’t Azure”.

ref: https://www.theregister.co.uk/2019/08/05/microsoft_licensing...

If your license differentiates between running on a physical box of my own versus someone else's physical box (cloud computing), I don't want to use your software.

I think most developers would tend to agree.

Don't use it, then.

It's lucky for Microsoft that the people receiving and paying the bills are far removed from the developers.

Does that also mean that you don't want to use redis or MongoDB after the changes they have made to their license?

I think you're going to run out of options pretty quickly outside of what Amazon writes in-house then. The alternative isn't a sustainable business model.

I kinda agree, but then again why even make a difference between those two things? I get how you want to differentiate between home and business use, but this...

Also as they pretty much turned a blind eye on this practice for years now they just created the perception that it is fine and legal. I absolutely can't blame people for getting mad at them changing their minds now. Either have a clear stance on it right from the start or deal with the backlash. That is, we still have to wait and see if/how much there'll actually be...

Slightly related to this: it was quite remarkable how long it took Microsoft to understand and accept that one OS install doesn't equal one (physical) machine. Even back in the old days when you just wanted to have a master hdd image to clone to all your workstations there was no official way to do this. Third party tools did voodoo black magic after dumping the image to the hdd. So it's not that surprising it took them so long to react here... Dynamically spinning up as many identical Linux VMS as you want and have them execute some container? Maybe network boot them? Crazy talk in Windows land for a long time.

> Basically, MSFT is just catching up to the fact

I very much doubt they are just catching up. This was planned for years (if not a decade).

The thought process being, as everyone virtualizes their compute to the cloud, any cloud, make it easy for them to stay on their existing Windows license. Well, they couldn't prevent it anyway. So in fact, they actively encouraged it. This way you don't lose that customer forever (as they transition to Linux or other, but generally Linux). The customer is happy, the move is endorsed by MS, they only have to deal with the one transition and they can decide freely on cloud provider, which feels like freedom. Part of the plan being, hope the customer moves their Windows workload to Azure, with an expectation that it would be least-effort.

Now that the bulk of the shift (to cloud) has occurred, differentiate the licensing.

IMHO this is a trumped up complaint about change. Microsoft did in part bring this uproar upon themselves by making the scheme complicated, but at least part of that was unavoidable (given that they want to make moar monies).

Please note:

> Multi-tenant hosts are not affected.

which is likely most uses. It's only dedicated hosting (and only for "listed providers") that are affected. And Azure is included. The apparent escape valve of Azure Hybrid Benefit isn't much of one ... you have to pay for the AHB and you have to have software assurance. The same as on the other providers. This is how they will (rightly) escape any claims of anti-competitive behavior.

In a nutshell, for customers that care enough to want a dedicated (vs multi-tenant) host, which BTW Azure hasn't ever had before, that's the kind of customer that cares enough to closely mind their licenses. MSFT is now going to insist on collecting the annual software assurance fee from those customers. This is probably motivated by the ease of spinning up new cloud instances, vs new on-premise hardware. With cloud, it's oh so easy to exceed your paid-for license usage. At least if they force the software assurance fees, they collect a larger fraction of fees.

TFA is a low information rant, and even declares itself as such:

> The longer version is complex, nuanced, and exceeds my attention span

The change also applies only to the big four cloud providers: Microsoft, Alibaba, Amazon and Google.

Any other cloud hosting provider, say Rackspace, can be used with on-premise licenses.

That makes it even more anti-competitive, since it makes it readily apparent that they're leveraging one area (Server Licensing) to artificially stimulate another (Enterprise Cloud vis-a-vis Azure Vs. Azure).

Hopefully the US Government doesn't deem Windows Server a monopoly or they're in deep trouble.

I wouldn't think Windows Server is anywhere close to a monopoly, unless you define it narrowly, like Windows Server is a monopoly for Exchange installs or something like that.

They're a monopoly for companies that are already locked into Win32 or Win32-specific applications.

Once again we have a definition of “monopoly” on HN that is nowhere near reality.

Sorry, I'm not following why from a licensing perspective it matters if you are running on a bare metal server in your office, a virtual environment on a physical server you own in a co-lo, or on virtual servers you "rent" from a cloud provider.

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