The Coalition for Fair Software Licensing has published research showing that US workers reckon Microsoft is using its productivity tools to lock their employers into the company’s AI services.

The survey data of more than 1,000 workers – out a day before the release of Microsoft’s E7 AI bundle – found that three-quarters believed Microsoft was using its dominance in productivity software to push AI. More than half (57 percent) opposed their employer buying Microsoft’s E7 bundle.

Only a third of workers questioned said they preferred Microsoft as a vendor, while 78 percent reported they could do their jobs just as well with another vendor’s AI tool.

Perhaps that other tool is Google Gemini. Though the survey makes for difficult reading for Microsoft and Copilot enthusiasts, it also opens a new front in the war for productivity hearts and minds. Google has no official affiliation with the survey or the Coalition for Fair Software Licensing – but Microsoft, for one, has its suspicions.

In a 2024 blog entitled “Google’s shadow campaigns,” Rima Alaily, Microsoft’s general counsel for Infrastructure Legal Affairs, wrote, “We understand Google is a main funder of the US-based Coalition for Fair Software Licensing.”

The Coalition for Fair Software Licensing were asked about its ties with Google. A spokesperson said, “While the Coalition does not disclose our membership, our members span a cross-section of key industries, including healthcare companies, financial services businesses, as well as cloud and cybersecurity providers – each one has experienced or been exposed to anticompetitive and abusive software licensing practices in the cloud.”

Another source grumbled about Gemini, saying there is a risk that “Google is deploying the same playbook as when they were monopolising search.”

Google were asked for comment, but the company was unable to provide a statement before publication. Other than an acknowledgement of receipt, Microsoft has also not responded.

Ryan Triplette, executive director of the Coalition for Fair Software Licensing, said, “Microsoft’s decision to launch E7 on May Day is no coincidence. It should send a clear distress signal for any organisation already locked into the Microsoft ecosystem. For years, customers have borne the cost of that lock-in, paying a premium not for innovation, but simply for the ability to maintain flexibility. E7 is the latest extension of that model, and the reaction from workers underscores a growing reality: the cost is not justified.

“Despite Microsoft facing mounting regulatory scrutiny over its anticompetitive behaviour, we fully expect the company to deploy every tool in its playbook to force existing customers into this new bundle. Regulators on both sides of the Atlantic should be watching closely and be poised to act quickly to protect customers.”

Microsoft is dominant in the office productivity space. Google Workspace has claimed a few high-profile scalps over the years, but some, such as European aerospace megcorp Airbus, have found the Microsoft habit a hard one to kick.

It is unsurprising, then, that critics have rung alarm bells over Microsoft pushing AI technology into enterprises that have already bought into its productivity ecosystem. Copilot has yet to deliver the productivity gains promised by evangelists, but Microsoft is heavily invested in the tech and determined it will be a success.

The survey data reflects wider unease among workers over AI tools being promoted through subscriptions like E7, and anxiety, perhaps, about an agentic future and what it means for their jobs. What it does not capture, however, is the thinking of those who will actually make the decisions: whether Microsoft holds its grip on office productivity into the AI age, or loses its crown to a rival.

For decades, enterprise software has acted as a digital filing cabinet or system of record where human workers painstakingly log the daily operations of a business. Now, Oracle wants to flip that dynamic, turning its software into an autonomous engine that does the work itself.

The move hinges on what the tech industry is calling agentic artificial intelligence (AI), where software agents with the ability to reason and collaborate can execute multi-step tasks with minimal human intervention.

Speaking on the sidelines of Oracle AI World Tour Singapore, Rondy Ng, Oracle’s executive vice-president for applications development, noted that enterprise resource planning (ERP) systems are evolving from passive repositories of data into autonomous systems of outcome that execute tasks based on high-level business goals.

However, Ng made it clear that Oracle’s latest AI innovations are exclusively reserved for its software-as-a-service (SaaS) products, such as Oracle Fusion, which is used by about 70% of its applications’ customer base. Legacy, on-premise product lines remain in maintenance mode.

“When people deployed those legacy applications from the past, they were heterogeneous,” he said. “They were not standard processes.

“If you have data demarcated in different ways, you can build agents to recognise all the differences, but the effort of doing that and the likelihood of making mistakes and hallucinations are higher.

“But if you’re on a relatively clean slate, you get faster results, better accuracy and more automation,” added Ng. “Our strategy is for people to go to SaaS. When you’re on SaaS, you can deploy AI much more efficiently.”

A UK Competition Appeals Tribunal (CAT) has dismissed Microsoft’s objections to a collective action lawsuit brought by UK-based cloud licensees, clearing the way for trial.

The case seeks compensation for approximately 59,000 businesses and organisations over Microsoft’s pricing of Windows Server on Azure versus competing cloud platforms including AWS and Google Cloud – allegations that Microsoft charged less for the software on its own platform than on rivals’. If Microsoft loses, it could face liability of up to £2 billion (c $2.7 billion).

The CAT granted a Collective Proceedings Order (CPO) on an opt-out basis, and said in its judgement that the claim “comfortably passes” the reasonable prospect of success threshold. The CPO – expected to be published within weeks – will set a deadline for businesses to opt out, and may include directions for when hearings begin.

Microsoft’s protestations concerned funding and the merits of the case.

Lead claimant Dr Maria Luisa Stasi called the ruling “an important moment for thousands of organisations impacted by Microsoft’s conduct.”

She added: “For years, Microsoft’s practices have had real financial impact on both public and private organisations. I’m now looking forward to preparing for trial and getting their money back on their behalf.”

A spokesperson for Microsoft said: “We will pursue an appeal of the Tribunal’s decision because it failed to follow recent precedent from the Supreme Court on class action certifications. We also dispute the underlying allegations by the class representative, and today’s decision makes no final determination on those claims.”

The case, filed in December 2024, is one of several legal headaches for Microsoft in the UK. The company is separately appealing a CAT ruling over secondhand software sales in a claim brought by reseller ValueLicensing.

Jonathan Horley, boss at ValueLicensing, said of the class action case heading to trial: “However it pans out, it is very good that MS are being held to account over their strategic move to a subscription model.

“Over the last 15 years, in both the desktop and datacenter environments, VL believes that Microsoft has abused its dominant position to achieve that aim. I believe the Stasi and Wolfson claims are manifestations of that.”

Cloud provider Civo also welcomed the development. CEO Mark Boost said: “Ensuring a level playing field for all providers is essential to fostering innovation, expanding choice, and delivering the best outcomes for customers.”

Microsoft’s alleged licensing practices have drawn scrutiny across Europe and further afield – in 2024, the company settled with EU cloud vendor group CISPE with a payout and commitments to change its practices. CISPE had no comment to make on this latest development. In the same year, Google filed a complaint with the European Commission’s anti-trust team over the matter.

The FTC is examining if Microsoft’s cloud clout crosses the line, and authorities in Japan are investigating if the vendor has violated anti-monopoly laws.

Google and AWS have not commented on the CAT licensing ruling, which sends the case to trial.

Citius, Altius, Fortius. More than a slogan, “Faster, Higher, Stronger Together” is a phrase etched in the minds of many IT decision-makers. Technology is essential. Nobody wants to fall behind. Doing so could mean losing out on many advantages and, consequently, significant business.

Therefore, it’s not surprising that Gartner forecasts global IT spending to reach $6.31 trillion this year, a 13.5% increase compared to 2025 — and nearly 3% more than Gartner forecasted in February, at 10.8% growth.

A sustained push in AI infrastructure, software, and IaaS is key to this growth, according to the research firm. “These shifts are reinforcing a multi‑speed IT market, with hyperscaler purchases and AI‑centric software segments significantly outperforming more traditional categories,” Gartner reported in a statement.

John-David Lovelock, analyst and distinguished vice president at Gartner, underscored that accelerated momentum in AI infrastructure and advanced memory played a significant role in the firm’s growth revision.

“As AI workloads scale, datacenter investment is ramping rapidly, which in turn is driving increased demand for high‑performance compute,” Lovelock said in the statement. “This dynamic is creating meaningful growth opportunities for companies delivering AI‑optimised processors, accelerators, and enabling technologies.”

What will grow the most? Spending on datacenter systems, at 55.8%, to exceed $787 million in 2026.

Supply constraints and strong demand have also resulted in record price increases for high-bandwidth memory, according to Lovelock, as hyperscaler demand drives sharp increases in investments in servers. “These trends collectively make AI infrastructure the most attractive segment for capitalising on the robust expansion in IT spending,” he said.

Those same higher memory prices are impacting device replacement cycles, according to the firm. Device spending is growing, to be sure, but at a lower rate (8.2%) than the IT sector overall.

“Together, these dynamics highlight a widening divergence across IT markets, as AI infrastructure and GenAI software see substantial upward revisions while device growth reflects ongoing cost and pricing pressures,” Lovelock noted.

Solvimon says companies are adopting more complex pricing models as AI changes how software is billed. According to the billing platform, usage-based charges have risen sevenfold since 2025.

Its data points to a shift away from flat monthly fees and seat-based pricing towards combinations of subscriptions and consumption-based charges. The fastest-growing software and AI businesses now use nearly five pricing structures on average, up from three over the past year.

That shift is putting pressure on finance teams as AI products create value in ways that do not fit neatly into older billing systems. Businesses are trying to bill for credits, tokens, usage and outcome-based measures alongside standard subscriptions, increasing the risk of invoicing errors and missed revenue.

A Bain & Company analysis of more than 30 established SaaS vendors found that 65% have already introduced hybrid pricing, adding AI usage or outcome metrics to traditional seat-based models. Solvimon argues that the spread of these structures is making billing one of the more fragile parts of the revenue cycle for companies with expanding product lines and more tailored commercial contracts.

Research from MGI found that SaaS companies can lose between 1% and 5% of annual recurring revenue each year through billing leakage caused by errors that repeat in each billing cycle until detected. For chief financial officers, that is bringing greater scrutiny to systems once treated as back-office tools rather than strategic infrastructure.

A federal spending watchdog has found the Department of Veterans Affairs (VA) faced “challenges” in understanding the correct number of licenses it should hold for the top five vendors in its $985 million annual software expenditure.

In a report published last month, the Government Accountability Office (GAO) found that “while the VA identified its five most widely used software vendors with the highest quantity of licenses installed, it faced challenges in determining whether it was purchasing too many or too few of these software licenses.”

The GAO said that for fiscal 2025, the VA planned to spend about $985 million on software, including commercial software licenses.

In 2015, the GAO identified “the management of software licenses as a focus area” for the VA in a high-risk report.

Another GAO report in January 2024 said the VA should track licenses in use within its inventories and compare them with purchase records.

The VA agreed with the recommendations and – as the latest report states – had taken “preliminary actions” to track software license usage and was due to implement initial functionality for a centralised software license inventory in late March 2026.

“If successful, this could be a critical first step in improving the department’s ability to track and analyse licenses across the department. Implementation of these recommendations would allow VA to identify opportunities to reduce costs on duplicate or unnecessary licenses,” it said.

Before that system went live, the GAO remained concerned that “VA was not tracking the appropriate number of licenses for each item of software currently in use.”

The GAO notes the VA “did not compare inventories of software licenses that were currently in use to purchase records on a regular basis.”

The GAO was also concerned with “restrictive software licensing practices” from vendors, which it defined as “any software licensing agreements or vendor processes that limit, impede, or prevent agency efforts to use software in cloud computing.”

The GAO has tracked progress on this issue since an earlier report in November 2024. It found restrictive software licensing practices affected federal agencies’ cloud computing efforts, including those of VA.

“These practices either increased costs of cloud software or services or limited the department’s options when selecting cloud service providers. VA had not established guidance for effectively managing impacts from restrictive practices for cloud computing or determined who is responsible for managing these impacts,” it said.

The GAO said that “fully assessing software licenses and effectively managing impacts from restrictive licensing practices at VA is an issue of vital importance.”

However, it said that the VA had not fully implemented recommendations from earlier reports.

“If the department continues to experience the challenges we have previously identified and does not take further actions to address our recommendations, it may jeopardise its ability to effectively manage its software licenses that provide critical services to veterans,” said the report.

VA told the GAO it expected to implement additional actions to address the recommendations by September 30, 2026. As of March 2026, VA had not provided an update on the status of the working group, the report said.

Oracle customers have been warned to watch for changes in support and pricing as Larry Ellison’s company makes huge datacenter spending commitments to support its AI ambitions.

Advisors in Oracle negotiations said support levels are declining, while costs might increase as discounts disappear. Others have warned of a tougher approach to contract negotiations.

Oracle is aggressively expanding AI datacenter capacity to serve demand tied to customers and partners including OpenAI, xAI, Meta, Nvidia, and AMD. The deal for OpenAI alone is set to be worth about $300 billion over five years.

Widespread reports of layoffs affecting thousands of staff came as investor concerns grew over how Oracle would finance its AI datacenter build-out, while borrowing heavily to support the expansion.

In March, Oracle increased the estimated cost of its fiscal 2026 restructuring plan by $500 million, taking the total to as much as $2.1 billion, as observers anticipated broader job cuts.

Oracle previously raised $18 billion in debt and has since outlined plans to raise far more, as it funds datacenter investments aimed at meeting surging demand from AI model builders and enterprise customers. Ratings agency Moody’s warned of further borrowing and negative free cash flow as Oracle ramps up its AI infrastructure investment.

Nick Walter, CTO of professional consulting at commercial advisory firm House of Brick Technologies, said that there were plenty of anecdotal reports that Oracle support outcomes are getting worse, meaning slower service, less skilled help, and “more Oracle Support responses that were obviously written by AI.”

House of Brick had also seen a recent surge in customers asking for help in reducing Oracle Cloud Infrastructure (OCI) usage or help in negotiation with Oracle over long-term OCI deals, he said. “Many customers who adopted OCI in the last three to five years are suddenly finding out that their renewals are much more expensive because Oracle has eliminated or reduced enterprise discounts, and they are being forced close to public listed pay-as-you-go prices.”

Customers were also seeking help in response to pressure on Java, with audits and sales pushes and “scary-sounding threats.”

“This is not a new phenomenon but pressure continues and Java is the main front in Oracle’s war against their customer’s pocketbook,” he said.

Craig Guarente, founder and CEO of Palisade Compliance, said that Oracle was no longer simply putting pressure on customers to license Java; it was conducting official audits. “We’ve definitely seen in the last few months a return to classic Oracle auditing practices,” he said.

In 2023, Oracle changed its Java SE subscription model, shifting from a per-user or per-processor basis to per-employee. Critics called the move “predatory” as organisations that were using little Java but had a large number of employees could be hit hard by the cost increase. Later that year, research from Gartner showed that costs could be between two and five times greater under the new licensing model for using the same software.

Guarente also warned of price hikes at OCI contract renewal. “If you’re not adequately protected, then we’re getting 9 percent or 10 percent for long term lock in. It all goes back to that original purchase. You had some flexibility in there if you were thoughtful in how you negotiated those contracts. But if you signed the local standard agreement, there’s no price protection.”

Eric Guyer, founder of Oracle advisory and consulting firm Advizant, pointed out in a social media post that the margins in software support were much higher than in datacenters.

“This means the value to Oracle of your software support payments is increasing, desperately so, whereas the value to you is diminishing, and at an increasing rate. I mean this both technically via waning innovation and the more than 8 percent annual inflationary adjustments,” he said.

Customers are also concerned about the long-term impact of the job losses on their relationship with Oracle, Guyer said.

“The trend in license negotiations is only indirectly related to Oracle’s shift for now. The layoffs mean companies have lost one or more of their sales contacts. But for apps or the more strategic long-standing relationships, this means customers are wondering what this loss of institutional knowledge will mean for them. I’m not hearing customers wonder if Oracle is de-prioritising its legacy software business just yet, although I see this as an obvious outcome,” he said.

Does your AI agent count as an employee?

At a recent conference, Microsoft executive Rajesh Jha floated a provocative idea. In a future where companies deploy fleets of AI agents, those agents may need their own identities — logins, inboxes, and even seats inside software systems. If so, AI wouldn’t shrink software revenue. It could expand it.

“All of those embodied agents are seat opportunities,” Jha said, envisioning organisations with more agents than humans — each effectively a user that must pay for a software license, or “seat” in industry lingo.

That’s a radical twist in the SaaS pricing debate rattling companies like Microsoft, Salesforce, and Workday. Investors worry AI could hollow out seat-based pricing, the backbone of enterprise software. If one human can manage dozens of agents, why pay for dozens of licenses?

Jha’s answer: because those agents are the new users. A company with 20 employees might buy 20 Microsoft 365 licenses today. If each employee gets five AI agents, and the workforce shrinks to 10 people, that could still mean 50 paid seats.

Not everyone buys it.

Nenad Milicevic, a partner at AlixPartners, sees the opposite. AI agents will reduce the number of humans interacting with software, slashing licenses. Instead of 20 employees, you might have one person overseeing a handful of agents. That shift would pressure vendors and empower customers to push back on pricing that no longer makes sense.

Milicevic argues the winners will be open platforms. Companies could charge extra for machine-based access, but risk losing customers to software rivals that let agents operate freely.

Which brings us back to the core tension: if AI agents are just extensions of you, charging extra feels like double billing. If they’re autonomous workers, paying for them may be inevitable.

The answer could define the next decade of software economics.

Microsoft has told its channel partners to get ready for a 20 percent price cut for Windows 365 cloud PCs, effective May 1st.

The software giant told partners it will cut prices “to make Cloud PCs more cost-effective for small and medium businesses.”

Microsoft has framed the price cuts as an “update” to the service that will change its performance in two ways: