Critics slam Microsoft’s CISPE antitrust settlement

Microsoft has paid damages to settle a major antitrust complaint by a European cloud consortium and promised licensing and hosting changes.

However, the deal was met with heavy criticism after it was announced late on Wednesday evening (July 10) – with Mark Boost, CEO CIVOdescribing it as “a global, powerful company paying for the silence of a trade organization.”

Redmond will pay an undisclosed “lump sum” to members of the Cloud Infrastructure Service Provider of Europe (CISPE) association, which owns AWS along with 34 smaller cloud providers, and will work with them to make its hyperconverged platform Azure Stack HCI available in their infrastructure.

The deal will also allow Redmond to participate in multi-session sessions. VDI based on Windows 11, with a pay-as-you-go license for SQL Server and free Extended Security Updates (ESU) available on CISPE members’ cloud stacks.

Microsoft Antitrust Settlement: CISPE Welcomes Promises

CISPE said the agreement will enable European cloud service providers to offer Microsoft’s HCI stack, applications and services on their local cloud infrastructure.

The company says this will help meet “the demand for sovereign cloud solutions and address the disruption experienced by European cloud service providers and their customers following Broadcom’s acquisition of VMware…”

Reuters Agency said the agreed sum was 20 million euros ($22 million).

However, as soon as news of the deal broke, Microsoft’s competitors warned that the cloud services market was “still in crisis” and criticized the agreement’s lack of transparency.

Mark Boost, CEO of cloud computing company Civo, said Stack: “Today’s agreement is not good news for the cloud industry — with some important questions to answer… Certainly, regulators now need to ensure that the largely undisclosed benefits that CISPE members and their customers receive are extended to any cloud provider and cloud user that was a victim of Microsoft’s unfair software licensing practices,” he added in an email.

Microsoft CISPE agreement: AWS excluded, criticizes terms

CISPE member AWS was not a party to the negotiations, was not bound by the agreement – ​​and was clearly not happy with the outcome. An AWS spokesman said Stack: “Although Microsoft denies that its licensing practices harm customers and competitors, it is now making limited concessions to some CISPE members, showing that there are no technical barriers that prevent it from doing what is right for every cloud customer.

“Unfortunately, this settlement does nothing for the vast majority of Microsoft customers who continue to be unable to use the cloud of their choice in Europe and around the world. We continue to support the growing number of customers, vendors and regulators around the world who are calling on Microsoft to end its discriminatory practices against all customers.”

CISPE has launched its Competition Complaint with the EC in 2022, accusing Microsoft of “anti-competitive practices” including “unjustified and discriminatory bundling, tying, pricing preferences and technical and economic lock-in,” tactics “used by dominant software companies to limit choice for European companies moving to the cloud.”

Microsoft “is using its dominant position in the productivity software market to drive European customers to its own Azure cloud infrastructure, which disadvantages European cloud infrastructure providers and IT service users,” the statement said.

Nine months to the birth of the “sovereign” HCI

The two parties have already signed a memorandum of understanding, and CISPE will withdraw its complaint. In addition to AWS, Google Cloud Platform and AliCloud will also “not benefit from or be bound by these conditions.”

Microsoft has nine months to deliver on its promise to deliver new “Azure Stack HCI for Hosters” products, otherwise CISPE will file a complaint again.

CISPE will also establish an independent European Cloud Observatory (ECO) to “monitor the development and ongoing evaluation of the product.” Members will include Microsoft, cloud infrastructure providers operating across Europe, and representatives of European customer associations, who will make “periodic public evaluations, reports, and recommendations related to the implementation of the agreement…”

Francisco Mingorance, Secretary General of CISPE, said: “This is a significant victory for European cloud service providers. CISPE has given Microsoft the benefit of the doubt and believes that this agreement will provide a level playing field for European cloud infrastructure service providers and their customers. Microsoft has nine months to deliver on its commitment.”

Dark Turmoil in the Cloud Industry

Cloud competitors are not happy with the deal and warn that it has done little to address competition concerns in the cloud services market.

CIVO Kubernetes and cloud specialist Mark Boost called for “fundamental changes” in the market because “hyperscalers have failed to self-regulate” and “have operated without checks for too long, leaving customers with subpar technology, opaque pricing, and unpredictable billing.”

“Many companies simply feel locked into using hyperscalers, and services are actively structured to discourage switching to an alternative provider,” he said. “Regulators need to take action, and fast. TCMA Cloud Investigation can ensure the UK charts a different path to the EU… including ending the scourge of a warped cloud credit system and anti-competitive software licensing.”

See also: “I always have to have leverage” – Wells Fargo platform chief