Google says Microsoft’s confidential settlement with a group of European cloud providers is merely about using its financial muscle to make complaints about software licensing costs vanish.
Yesterday, the Cloud Infrastructure Service Providers of Europe (CISPE), a trade group comprised of 27 companies, agreed to remove a previous formal complaint to the Europe Commission made in November 2022.
UK CMA early findings indicate Microsoft restricts cloud choice
Under the concessions made, Microsoft agreed to pay an unspecified financial sum to CISPE, to release a version of Azure Stack for European hosters that includes features that existing Azure Stack HCI customers get directly from Microsoft, and to create a mechanism to monitor the situation.
Yet Google isn’t convinced this will make much difference. “Microsoft’s playbook of paying off complaints rather than addressing the substance of their complaint hurts businesses and shouldn’t fool anyone,” said Amit Zavery, GM, veep and head of platform for Google Cloud.
“Many regulatory bodies have opened inquiries into Microsoft’s licensing practices, and we are hopeful there will new remedies to protect the cloud market from Microsoft’s anticompetitive behavior,” he added.
Zavery previously told The Register that Microsoft charges customers up to five times more to license its software in Google, AWS or Alibaba clouds. He described it as a”software tax” introduced by Redmond in 2019.
Google has provided information about this and other Microsoft behaviours that it alleges break the rules to the EU, the UK’s Competition and Markets Authority, and the FTC.
It is certainly correct that the hyperscalers account for the vast majority of the public cloud sales to customers, and the deal with CISPE – while no doubt important to CISPE members and their customers – will not have far-reaching consequences for biz clients.
“We are exploring our options to continue to fight against Microsoft’s anticompetitive licensing in order to promote choice, innovation, and the growth of the digital economy in Europe,” said Zavery.
AWS, which has also been highly vocal about Microsoft’s policies with cloud and software, was similarly unimpressed by Microsoft’s settlement. A spokesperson told us yesterday:
“Despite denying its licensing practices harm customers and competition, Microsoft is now making limited concessions for some CISPE members that demonstrate there are no technical barriers preventing it from doing what’s right for every cloud customer.
“Unfortunately, this settlement does nothing for the vast majority of Microsoft customers who are still unable to use the cloud of their choice in Europe and around the world. We continue to stand with the growing number of customers, providers, and regulators globally who are calling on Microsoft to end its discriminatory practices for all customers.”
AWS is a backer of CISPE but was not included in the settlement with Microsoft.
Microsoft previously settled a complaint about its commercial behavior with OVH Cloud, Aruba S.p.a and DCC in March last year. The contents of that settlement were kept confidential, which CISPE said to us was “disappointing on many levels.”
The Campaign for Fair Software Licensing – backed by Google – said that Microsoft’s settlement was the “latest attempt to avoid regulatory scrutiny without addressing the underlying uncompetitive practices that impact millions of cloud customers worldwide.
“Even after this agreement is in place, Microsoft will continue to use its unfair software licensing practices to limit choice, drive up costs, and lock in customers. A settlement with some smaller European providers that excludes the vast majority of customers and cloud providers does nothing to address Microsoft’s global anticompetitive behavior.”
Microsoft declined to comment. ®