UPDATE: Microsoft SPLA Licensing Changes 2025

What you need to know?

From 1 October 2025, Microsoft will remove the ability for service providers to use their own SPLA (Services Provider License Agreement) licenses on “Listed Provider” public clouds, including AWS, Google Cloud, and Alibaba Cloud.

If your workloads are currently hosted on these platforms using SPLA licensing, you’ll need to move to alternative licensing models or infrastructure to remain compliant. Failure to act before the deadline could mean a sudden — and significant increase in licensing costs.

Why this change matters?

Until now, SPLA allowed service providers to use their own licences for a wide range of Microsoft products — from Windows Server and SQL Server to Office Pro Plus, RDS, and System Center, even on public clouds. From October 2025, that flexibility ends for Listed Providers. Businesses will need to:

• Transition workloads to their own infrastructure or non-listed providers,
• Move to license-included models from the hyperscaler,
• Adopt CSP Hoster, BYOL with Software Assurance, or other frameworks.

The Cost Impact

One organisation we modelled saw its Windows licensing costs increased to more than 200% per month when moving to AWS license-included VMs — simply because licensing moved from physical cores to per-vCPU. Multiply that across multiple workloads, and you have a budget challenge that can’t be ignored.

What’s Changing?

All SPLA-licensed products are impacted when run on Listed Providers, including:

• Server core licenses – Windows Server, SQL Server
• SAL-based products – Office Pro Plus (user SALs), Remote Desktop Services (RDS)
• Other server-hosted Microsoft software – System Center, Visual Studio, Exchange, BizTalk

You can still use SPLA:

• On your own infrastructure
• On non-listed cloud providers
• By purchasing license-included VMs from the Listed Provider directly

What are the action items for you?

Here are the things you need to consider before the deadline:

Windows Remote Desktop Services (RDS) SAL

• Stay on AWS? Use RDS CALs with Software Assurance on dedicated hosts
• Go Azure? Move to Azure Virtual Desktop (no RDS SALs required)
• Hosted alternative? Choose a CSP Hoster on non-listed infrastructure

Office Professional Plus SAL

• Stay on AWS? Move to M365 E3/E5 under CSP and install on dedicated VMs
• Azure option? Azure Virtual Desktop
• Simplify? Use M365 Apps locally and stop hosting Office entirely

System Center Configuration Manager (SCCM) CML

• Stay compliant? Use SCCM with Volume Licensing + SA on dedicated infrastructure
• Modernise? Switch to Microsoft Intune / M365 E3/E5 (cloud-based, no SPLA needed)

Windows Server Datacenter (core licensing)

• Stay on AWS? Use license-included EC2 or BYOL with SA on dedicated hosts
• Azure option? Use Azure Hybrid Benefit for cost savings

How to prepare now?

With the deadline approaching, businesses should:

Audit current workloads – Identify all SPLA-licensed workloads on Listed Providers

Model the cost impact – Compare current spend to licence-included or BYOL pricing

Assess modernisation paths – Consider OS migration (e.g., SQL Server on Linux) or cloud re-architecture, and leverage funding where possible

Test before cutting capacity – Disabling Hyper-Threading can cut costs, but may affect performance

AI Automation – With AI, there’s a possibility to remove the need for licensing all together

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Don’t Wait Until September 2025

These changes affect compliance, budgets, and architecture, and require both licensing and technical planning. The right strategy now can help you:

• Avoid a licensing cost spike
• Stay compliant with Microsoft terms
• Modernise and optimise workloads for the future

At TechConnect, we’re helping businesses model scenarios, choose the right licensing path, and implement changes with minimal disruption. See sample scenarios here:

The deadline is fixed. Your options are flexible — for now. Let’s review your environment and build your transition plan today. Scan the QR code to get in touch with us.