Microsoft Licensing Updates Dec 2023

This is the final Microsoft Licensing update for 2023. I think we can safely say 2023 was Microsoft’s year of AI and Copilot. 

As we slowly start to wrap up this year, it seems like things have quieted down at Microsoft as well after the summer Generative AI boom. 

Aside from several updates to the Product Terms and additional items, the biggest news for this month is likely the M365 Archive Preview. You can read more about this at the end of the update. 

Microsoft Product Terms Updates


Clipchamp is an online video editing tool that Microsoft acquired in September 2021. Microsoft added the following terms and conditions: 

  • Clipchamp for Work is now included in the Microsoft Online Services portfolio and is part of M365 Business Standard, Premium, E3 and E5 suites.
  • The Clipchamp Premium add-on was added to the M365 page for EA/EAS or MCA. License prerequisite table was updated to include the above mentioned suites.

Universal Licensing Terms for Online Services

  • Another change was added to the Customer Copyright Commitment, namely the addition of Azure OpenAI Services to the list. This means that the Azure Open AI Services are now covered under Microsoft’s obligation to defend against third-party intellectual property claims.
  • Online Services Purchasing Rules for Add-ons clarified to now show that Add-ons should be specified as such in the Add-on section of the relevant product page


A new clauseadded for using Bing Services. The clause states that Bing Services is not covered by the DPA for Microsoft Volume Licensing, but is instead covered by the following:

Microsoft Fabric

Microsoft Fabric added to the Azure Core Services table. It is also covered by the EU Data Boundary Services, meaning MS Fabric is covered under GDPR.

LicenseQ shares latest updates Copilot licensing


It’s interesting to note that Microsoft Copilot is seemingly excluded from Microsoft’s Data Processing Agreement, whereas Copilot for Microsoft 365 (renamed from M365 Copilot) is included in the EU Data Boundary Services. I wonder what the differences are between the two.

Power platform

  • Copilot Studio added to the Power Platform page.
  • The Data Use and Access for Abuse Monitoring clause is updated to clarify that Microsoft stores and processes Inputs & Outputs Content for debugging and to perform checks to prevent abusive and harmful uses for Power Platform capabilities powered by Azure Open AI Services. 


Added clause to Azure Machine Learning Service to reflect that any third-party products used for this service are subject to Non-Microsoft Products terms of the Product Terms.

New entry for Azure SQL Database regarding SQL Server Fail-over Rights. You can now use a geo-secondary region for disaster recovery without any SQL-costs. The only charges are for compute, storage and any other associated costs.

You have the option to run this as a Primary Workload every 90 days for testing or in case of actual disaster recovery for a brief period to allow for the transfer between them (time allowance not specified). The fail-over server can only have as many vCores as the primary Database Server.

Microsoft Cloud Solution Provider

Other items of interest

Cloud Solution Provider (CSP)

The CSP NCE pricelist erroneously includes triennial Microsoft 365 E3 and E5 and Office 365 E3 SKUs. These are not to be transacted and are due to a publishing error. Partners cannot offer these and they will be removed with the January 2024 pricelist.

CSP for Education, Non-profit and US Government Cloud

The Cloud Solution Provider program still allowed for transacting legacy subscriptions (non-NCE) for Education, Non-profit and US Government Cloud customers. The legacy option to be removed as of January 1st, 2024. Microsoft is allowing a transition period for any of these customers between January and June 2024, after which they will mandatory migrate any remaining customers themselves.

Microsoft 365 Archive

Microsoft 365 Archive

Microsoft has released the Preview of Microsoft 365 Archive. This product offers cost-effective storage for inactive SharePoint Sites. It helps you reduce your hot storage (into cold storage) within SharePoint, which reduces your storage costs.

Mircosoft claims that this cold storage still has the same searchability, security and compliance standards. There are some limitations:

  • Tenant with 50k sites might face issues trying to enumerate archived sites
  • End-user search results won’t show any archived content at the moment
  • Tenant rename isn’t available for archived sites
  • Archiving sites which are enrolled in M365 Backup will be blocked
  • If you archive a site that is synced to a device, that device’s sync client will display errors

If you want to start with M365 Archive, despite these limitations, this is the pricing model:

  • Storage consumption is charged at a per-GB monthly rate ($0,05/GB/month). Only charged when archived storage plus active storage in SharePoint exceeds a tenant’s included or licensed allocated SharePoint capacity limit.
  • Reactivation of archived data after seven days is charged at a per-GB monthly rate ($0,60/GB/month). The reactivation fee is charged regardless of whether a tenant is above or below its SharePoint capacity limit and only if reactivation is executed more than seven days after the site was most recently put into an archive state.

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    As always, I hope you have found this Licensing Update useful. Stay tuned to hear all about the first updates and changes to the Microsoft Product Terms in January. 

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