Microsoft will phase out the current licensing structure for Azure VMware Solution (AVS). This will eliminate one option for organisations to use VMware in the cloud without licensing VMware Cloud Foundation (VCF) themselves. Existing customers have until August 2027 to transition.

Under the current version of AVS, the necessary licenses for vSphere, vCenter, vSAN, NSX, and other components are included in the service Microsoft provides. That model is being phased out. Starting October 31, 2026, Microsoft will no longer sell new AVS environments that include these VMware licenses.

Going forward, customers must have their own VCF license from Broadcom, reports The Register. They can then use it within AVS via the “Bring Your Own License” model, also known as AVS VCF BYOL. Existing users of the current setup must transition by August 30, 2027, at the latest. After that, their existing environments will no longer run the same way.

According to a new report from Taiwanese publication United Daily News (UDC) Microsoft is raising the cost of Windows license fees for hardware makers by a much higher amount than normal. According to the report, certain OEMs are seeing licensing price hikes of between 7% and 10%.

Usually, Microsoft raises Windows license fees for OEMs by a low digit percentage, making this 7% to 10% increase much more significant than normal.

“A PC brand executive stated that Microsoft increases licensing fees for Windows OEMs (device manufacturers) every year. In the past, licensing fees mostly increased by single digits each year, but starting in July this year, the average increase has reached 7% to 10%, which is a significant increase compared to previous years,” UDC says.

Of course, the cost of the Windows license fee is usually (at least partially) passed onto the consumer buying a computer, and UDC claims that their source says laptop pricing is already being impacted by these recent license fee increases. Microsoft charges different OEMs their own fees for Windows, so the exact increase in cost will differ for each hardware maker.

Regardless, with the ongoing memory component shortage, PCs have already seen astronomical price increases over the last year, with experts claiming that we haven’t yet seen the worst of it. With Microsoft raising prices higher than usual on Windows licenses, it feels like the Redmond giant is adding extra fuel to the fire.

To be clear, the Windows license fee price hikes only apply to OEMs building hardware that ships with Windows. The cost of buying a license for Windows 11 as a consumer remains unchanged, being $99 for Windows 11 Home and $199 for Windows 11 Pro.

The ongoing component crisis has made computing unaffordable for many people. PCs that used to target the $600-$800 price bracket now cost close to $1,000. And flagship Windows laptops that used to cost $1,200-1,500 are now closer to $2,000. Even Apple has been hit by the shortage, being forced to raise prices by hundreds of dollars across its Mac line-up. Microsoft’s own Surface line was hit especially hard, with the flagship Surface Pro and Surface Laptop being $400-$500 more expensive than the last-gen models.

Microsoft is moving parts of its AI portfolio beyond pure per-seat pricing by pairing user licenses with charges tied to usage. The hybrid model keeps recurring seat fees in place while adding a variable billing unit as customers consume more AI capacity.

That model is beginning to show up in Microsoft’s financial results. Dynamics 365 Customer Service credit consumption rose fourfold quarter over quarter, while GitHub Copilot generated what Microsoft called “significant consumption revenue” after its June billing change.

Microsoft also reported more than 30 million paid Microsoft 365 Copilot seats, with net additions more than doubling from the previous quarter, and said GitHub continued adding Business and Enterprise seats.

ValueLicensing (VL) has been invited to attend a case management conference in a related multibillion-pound collective action against Microsoft, according to the reseller’s boss, Jonathan Horley.

VL sued Microsoft for £270 million in 2021, alleging that the software giant restricted the supply of surplus Office licenses available for resale. Barrister Alexander Wolfson is the proposed class representative in a separate claim filed in 2025 on behalf of more than two million UK customers. That action seeks between £1.3 billion and £3.5 billion in compensation.

Both cases are before the UK’s Competition Appeal Tribunal (CAT) and concern Microsoft’s alleged efforts to restrict the market for pre-owned software licenses.

Case management conferences (CMCs) are used to set timetables and decide procedural questions as a case progresses.

According to Horley, ValueLicensing has a CMC concerning disclosure listed for September 14, followed the next day by an invitation to another in the Wolfson proceedings.

The September 15 CMC could address how the two proceedings interact, including whether the Wolfson action should be stayed pending judgement in the more advanced ValueLicensing case. There is also the possibility that the claims could eventually be heard together, although the tribunal has yet to indicate what course it will take.

ValueLicensing’s case is considerably further ahead of Wolfson’s. The Court of Appeal dismissed Microsoft’s appeals on issues including copyright in July, although Microsoft can seek permission to appeal to the Supreme Court.

Kate Pollock, head of competition litigation at law firm Stewarts, said of the Wolfson case earlier this year: “Microsoft’s conduct has had a profound and costly impact on millions of individuals and private and public sector organisations that rely on its software for daily business operations.

“We believe that Microsoft abused its market dominance by imposing restrictive licensing practices that effectively shut down competition and inflated prices.”

Closer procedural links between the cases could complicate Microsoft’s defence against two claims arising from similar allegations.

VL’s Horley said: “Following on from the judgement at the Court of Appeal we are pleased to have a hearing listed for September 14 to progress further disclosure. ValueLicensing has also been invited to the first hearing of the Alexander Wolfson class action on September 15. That will deal with the next steps for certification and the interactions between the two claims.”

Horley said the move was “very significant” and showed the progress ValueLicensing had made in terms of the competition and copyright law aspects.

“ValueLicensing are experts in the pre-owned Microsoft market with significant evidence and experience of the operation of the market during the relevant period in which the abuse is alleged to have occurred,” he said.

“Given that both claims relate to the pre-owned Microsoft market, that the ValueLicensing claim is so advanced and Mr Justice Turner is Chair for both, it is logical for ValueLicensing to be invited. ValueLicensing is happy to assist the Tribunal in determining the next procedural steps for both actions.”

The UK’s Competition and Markets Authority has opened a fresh investigation into Microsoft, this time over how the company is marketing its Microsoft 365 Personal and Family subscription plans.

A cursory glance at the probe highlights that the CMA is trying to prevent Microsoft from sneaking in Copilot and AI features as justification for recent subscription price hikes. A closer look at the investigation displays a pattern of friction Microsoft runs into with regulators regarding its subscription practices, automatic renewals, and software bundling almost every time it adjusts its services.

The CMA made the investigation public on July 29, 2026, though the case itself was opened two days earlier. According to the CMA’s case announcement, the price gap between plans is concrete. The Classic Microsoft 365 Personal plan costs £59.99 a year, compared to £84.99 a year for the Copilot-equipped version, a difference of £25 annually. The Family plan costs £79.99 a year for Classic versus £104.99 a year with Copilot bundled in.

The CMA’s announcement hinges on Microsoft’s change in January 2025, when the company automatically added new features such as Copilot to existing Microsoft 365 plans with no increase in fees for the remainder of the subscription period. Unfortunately, once the plans were up for renewal, customers who were not paying attention were re-enrolled into higher-priced plans. Customers who were paying attention could avoid the bait-and-switch by selecting a ‘Classic’ plan or cancelling during the re-enrolment period.

This price change was covered when it first happened in February 2025, and even then, Microsoft would not directly attribute the increase to Copilot in their own communications. Personal plans jumped from $6.99 to $9.99 a month in the US, and Family plans went from $9.99 to $12.99, with the Classic option only showing for existing subscribers who knew to look for it during cancellation.

CMA regulators are now examining whether Microsoft provided adequate messaging for customers to understand what changes occurred and how much more they were going to pay despite spending months using features that were initially presented as free.

As Senior Director for Consumer Protection, Hayley Fletcher puts it, “When a business changes its subscription plans, customers need clear and timely information about their options.”

Still smarting from Court of Appeal loss earlier in July, Microsoft has secured an extended stay in the ValueLicensing saga as it seeks the Supreme Court’s blessing for one more roll of the dice.

The UK’s Competition Appeal Tribunal (CAT) ruled in 2025 that the resale and subdivision of Microsoft on-premises software licenses did not infringe the US corporation’s copyright. Microsoft appealed and, on July 7, lost.

Proceedings had already been stayed in February pending the Court of Appeal’s decision, and an extended stay was granted July 21 after Microsoft indicated that it intends to seek permission to appeal to the Supreme Court.

Microsoft has undertaken a potentially high-risk strategy. Having first contested a claim by ValueLicensing that it had inserted contractual clauses to nudge customers toward Microsoft 365 subscriptions and prevented those customers from reselling their perpetual licenses, it changed tack. Microsoft suggested that reselling its software was illegal due to copyright infringement. The CAT ruled otherwise. Microsoft appealed and lost.

ValueLicensing sued Microsoft for £270 million in 2021 over claims that the company choked off the supply of surplus Office licenses. It’s a big number, but not as big as a class action that bears several similarities to the case. That action, represented by Alexander Wolfson, could result in a multibillion-pound payout. Microsoft has a lot to lose if things don’t go its way.

The stay does not apply to ValueLicensing’s disclosure application, nor does it apply to the confidentiality application. ValueLicensing noted that the applications “are expected to be considered at a further Case Management Conference in September, meaning the case continues to move forward despite the stay.”

The stay hinges on what happens with the Supreme Court. The Chair, Justin Turner KC, said: “As yet it is unknown whether permission to appeal to the Supreme Court will be granted. It is necessary for me to balance the potential for a waste of costs in the event permission is granted and an appeal is successful, against the undesirability of delay in these proceedings.”

The approach, where the outstanding applications could proceed, was described as “middle ground” by Justin Turner KC. “These steps are proportionate at this stage given that the Claimant has successfully prevailed before this Tribunal and the Court of Appeal.”

In the earlier judgement rejecting Microsoft’s appeal, it was noted that Microsoft’s approach, if followed, “would produce odd results.” First, there was a distinction made between products on CD-ROM, where Microsoft can’t control the resale market. Then there was the potential for a legal minefield around UsedSoft, where Oracle’s attempt to stop the sale of secondhand software licenses was stymied by an EU court in 2012.

The Microsoft approach, according to the judgement, “would mean that all that was necessary to avoid the effect of UsedSoft would be to incorporate some icons or clip art with the program.”

ValueLicensing boss Jonathan Horley said in a statement: “We are pleased a full stay of the proceedings hasn’t been granted and we can progress the outstanding applications on further disclosure and confidentiality. These are important steps to enable ValueLicensing to progress swiftly to a full liability trial. As was noted in the Reasoned Order, we succeeded at first instance and in the court of appeal and the decision to allow our disclosure applications to progress now represents a fair and proportionate decision which seeks to minimise further delay to the determination of the claim.”

Recently, Microsoft has been taking many steps to improve the security of Windows and other Microsoft products as a whole. For example, the tech giant recently announced a big change to Entra ID authentication with default passkeys. Plus, it is also introducing AI-enhanced Windows security updates as it highlighted the new update strategy.

Following that, Microsoft has announced that it is preparing to strengthen the security of Windows volume activation too by introducing a new hardware-backed trust model for its Key Management Service (KMS). The enhancement, called KMS Hardware-Secured, will use Trusted Platform Module (TPM)-based attestation to verify that KMS hosts are running on trusted hardware before they can activate Windows devices.

The announcement marks the latest step in Microsoft’s efforts to modernise Windows activation as companies face growing challenges around device identity, software licensing, and the misuse of activation procedures.

KMS, if you are not already aware, is Microsoft’s volume activation technology designed for organisations that need to activate large numbers of Windows devices across a network. Instead of each device connecting individually to Microsoft’s activation servers, a KMS host within the enterprise environment handles activation requests from eligible client devices, thus making deployment easier in such settings.

According to Microsoft, the new KMS Hardware-Secured capability addresses risks from fake or cloned KMS servers, which attackers have used to bypass activation controls. By introducing TPM attestation, Microsoft aims to ensure that only verified KMS hosts running on uncompromised hardware can issue Windows activation licenses.

For anyone who doesn’t know, perhaps, TPM is a dedicated hardware security component that provides a hardware root of trust. TPM basically enables devices to generate and protect cryptographic keys that help ensure the integrity of the platform. Through TPM-based attestation, a device can produce cryptographic proof that it is running on trusted hardware and has not been tampered with. Many Windows security features like Windows Hello, BitLocker, System Guard, and more, rely on TPM.

Under the new activation model, a KMS host first uses TPM-backed attestation to establish its hardware identity, and then Microsoft verifies this attestation before allowing the server to activate Windows devices. The TPM also confirms the integrity of the platform, helping ensure the host has not been compromised. Once verification is complete, the KMS host can securely process activation requests from Windows devices within the organisation.

Hence, businesses using KMS are thus being encouraged to begin assessing their environments ahead of the transition. For virtualised KMS hosts, Microsoft adds that guidance will be provided in the future.

Beginning next month, in August 2026, Windows Server 2025 will introduce readiness messaging to help admins determine whether their KMS hosts meet the new hardware-based security requirements. Status information will be available through the slmgr /dlv command. An eligible device will say “This device is eligible to serve as a KMS host with hardware-based security,” while a non-eligible one will show “This device does not meet the requirements for using KMS host with hardware-based security.”

Finally, Microsoft has confirmed that TPM attestation will become mandatory for KMS Hardware-Secured activation with the next Windows Server Long-Term Servicing Channel (LTSC) release, which likely means Windows Server 2028. As such, the company recommends to begin preparing for the transition process early on. You may find more details on the official blog post here on Microsoft’s Tech Community website.

According to new Lansweeper data, as many as 16.9% of Windows client devices, which equates roughly to a total of one in six overall, still runs Windows 10.

While Windows 11 now accounts for 78.8% of installs and Windows 10’s market share has fallen from about 50% in mid-2025, Lansweeper warns the migration is starting to slow down, implying the remaining Windows 10 market share could show no signs of going anywhere.

And that’s a worrying state of affairs, because the average Windows 10 device has around 3x as many active common vulnerabilities and exposures (CVEs) as a Windows 11 device (1,930 vs 652).

Additionally, around two-thirds of the active CVEs on Windows 10 are rated high or critical, and the rate of vulnerabilities known to be exploitable is around 1.7x higher than on Windows 11.

The report notes that Microsoft’s Extended Security Updates (ESU) program buys some breathing room, protecting consumers until October 2027 and paying commercial customers until October 2028.

Healthcare and pharmaceuticals (23%), consumer and retails (23%) and manufacturing (18%) are among the industries most likely to still be running Windows 10, with SMBs (21.4%) more likely to be running the outgoing OS compared with enterprises (16.6%).

Lansweeper also revealed that technical limitations aren’t necessarily to blame, with only 2.8% of the Windows 10 devices it analysed failing Windows 11’s hardware requirements.

More broadly, the report warns that nearly one-fifth (18.7%) of the entire Windows landscape it monitors runs end-of-life operating systems like Windows 7, Windows 8.1 and Windows XP.

The report concludes that, while many users have now upgraded to the latest OS, the remaining estate is smaller but disproportionately more difficult, expensive or risky to update. But with ESU programs soon running to an end, deeper considerations into leaving Windows 10 should be made.

The UK’s Court of Appeal has dismissed Microsoft’s appeal against a ruling that ValueLicensing (VL) can resell pre-owned software licences.

The judgement, handed down July 7, follows a ruling by the Competition Appeal Tribunal (CAT) in November that customers could resell their licenses, even if Office contained clip-art.

In 2021, VL filed a claim accusing Microsoft of stifling the market for pre-owned on-prem software licenses, alleging the US biz baked restrictive clauses into its contracts – essentially, better subscription deals for customers who didn’t resell old licenses. VL sought £270 million in damages; Microsoft denied wrongdoing.

The case later took a turn, when Microsoft attempted to reframe it as a copyright dispute. VL was leaning on the EU’s UsedSoft ruling, which established that secondhand software licenses could legally be resold. Microsoft changed tack and countered that Office’s icons and help files made it a creative work, and thus covered by the Copyright and Information Society Directive rather than the software licensing rules UsedSoft addressed. Microsoft also argued that licenses it had sold in bulk (for example, a 1,000-seat purchase) couldn’t legally be broken up and resold piecemeal by VL.

The CAT rejected both arguments and ruled unanimously for ValueLicensing. Microsoft filed an appeal, and that appeal has now failed.

The judgement is unambiguous on both counts. On copyright, the Court of Appeal agreed with the CAT that Microsoft’s reasoning would lead to “odd results.”

“It would mean that all that was necessary to avoid the effect of UsedSoft would be to incorporate some icons or clip art with the program,” the judgement noted.

As for the subdivision of volume licenses, again, the Court of Appeal sided with the CAT and dismissed Microsoft’s appeal: there’s nothing wrong with VL’s approach.

VL’s Jonathan Horley said in a statement: “I am delighted that the Court of Appeal has given such a clear judgement in ValueLicensing’s favour on both of Microsoft’s appeals. The judgement agreed with all the main conclusions of the CAT on both rulings under appeal as well as clarifying the overall legality of our business model.”

Horley pointed out that none of Microsoft’s arguments succeeded and VL now intends to pursue its compensation claim.

“We are considering the consequences of the Court of Appeal’s judgement for Microsoft’s defence to our claim and will focus in the coming weeks and months on the key procedural steps leading up to a liability trial,” he added.

A Microsoft spokesperson said: “We respectfully disagree with the court’s decision and will seek permission to appeal. Today’s decision does not address ValueLicensing’s core complaint that we gave customers the option to apply the value of their licenses for older products to new cloud subscriptions rather than selling them to third parties.

“We continue to believe that was both legal and the right thing to do. Helping our customers move to the cloud improves productivity and security.”

Justin Turner KC, the judge presiding over ValueLicensing’s claim, is also overseeing Alexander Wolfson’s collective action against Microsoft. Wolfson was granted permission to intervene in the appeal on March 30, and the judgement noted that “the intervener’s position was essentially supportive of VL’s case.”

That potentially makes today’s dismissal significant well beyond VL’s own claim. The Wolfson collective action, bolstered by this ruling, could expose Microsoft to liability running into the billions, dwarfing the hundreds of millions at stake in VL’s original claim.