Cadastre-se agora para um orçamento mais personalizado!

Google calls Microsoft's cloud practices in the EU anti-competitive

Mar, 04, 2024 Hi-network.com

Google Cloud has joined AWS and Europe-based Cloud Infrastructure Services Providers in Europe (CISPE) in protesting Microsoft's anticompetitive cloud software licensing practices in the EU.

"Microsoft's cloud licensing restrictions restrict choice and create harmful downstream impacts for companies, ranging from higher costs to more security breaches to a chilling effect on smaller cloud and software providers including European AI startups," Amit Zavery, vice president of platforms at Google Cloud, wrote on X.

Microsoft should end the arbitrary "Listed Provider" designation and allow customers to run their previously purchased software on any platform without paying as much as 5x more to use non-Azure clouds, Zavery said, adding that Microsoft shouldn't be permitted to pick and choose who it competes with.

Zavery was adding to the narrative, which rose from a complaint submitted by CISPE to the EU in November 2022, claiming that Microsoft's new cloud software licensing terms published in October of that year were bad for the EU's cloud ecosystem.

The new cloud software licensing terms were published in the first place by Microsoft in an effort to avoid another complaint brought on by German software provider NextCloud, France's OVHcloud, Italian cloud service provider Aruba, and a Danish association of cloud service providers.

In his interview with Reuters, Zavery claimed that Microsoft's anticompetitive software licensing practices for the cloud will also have a ripple effect on emerging technologies such as generative AI and AI in general.

However, it is to be noted that both companies are competing fiercely in generative AI and the extended AI segment, with Microsoft gaining an upper hand by releasing tools such as ChatGPT and Copilot ahead of Google's release of Duet AI and Gemini.

Conflicting views on the issue

Although Zavery pointed out the expensive nature of Microsoft's licensing policies, Daniel Castro, director of the Center for Data Innovation at think tank ITIF, said he believes Microsoft's licensing terms are fair and especially "not anticompetitive" in nature.

"Microsoft's Services Provider License Agreement is available to any cloud provider. Indeed, many of Microsoft's competitors use it to offer Microsoft services. For example, Amazon offers Microsoft SQL Server and Active Directory on AWS. Competitors can offer Microsoft software, but quite reasonably, Microsoft wants them to pay for these licenses," Castro explained.

Microsoft refuted Zavery's claims and said that it has worked with independent cloud providers to change its licensing terms to address their concerns.

"Worldwide, more than 100 cloud providers have already taken advantage of these changes," a Microsoft spokesperson said.  

However, Zavery took exception to Microsoft's approach of working with individual vendors and called it a tactic of avoiding broader issues while taking advantage of picking and choosing vendors they want to deal with.

"We will continue to raise these issues on behalf of our customers. This should be a transparent process where all affected stakeholders have a seat at the table. Only a resolution that is fair for all in the cloud market will create a level playing field for all," Zavery wrote on X tagging the EU handle.

Along with the complaint by CISPE, the European Commission has received other complaints against Microsoft recently. Last year, it began looking into a complaint regarding Microsoft's bundling of Teams with Microsoft 365.

On the contrary, however, ITIF's Castro said CISPE may be using EU antitrust regulators, who already have a bone to pick with US tech companies, to strengthen their position at the negotiating table.

"While software licensing could conceivably be a factor in some cases, it is unlikely to be a key factor in shaping this market," Castro said, explaining the rationale behind his belief and adding that hyperscalers such as Microsoft are competing based on factors such as reliability and security.

Additionally, concerns raised by both CISPE and Zavery rake up the issue about the revenue of hyperscalers and the smaller vendors operating in the EU.

While on one hand, Forrester's senior analyst Dario Maisto pointed out that anticompetitive practices can have a snowball effect on revenues and market share of certain vendors, Microsoft has cited independent research to show that competition between cloud providers in the Union remained healthy.

"And as the latest independent data shows, competition between cloud hyperscalers remains healthy. In 2023, Microsoft and Google made small gains on AWS, which continues to remain the global market leader by a significant margin," the Microsoft spokesperson said.

Microsoft faces similar challenges in the UK

The UK has also seen hyperscalers embroiled in controversy over anti-competitive practices in their cloud offerings.

Last year in December, Amazon Web Services (AWS) blamed Microsoft for anti-competitive practices in the cloud computing segment in a letter to the UK's Competition and Markets Authority (CMA).

AWS's letter came after the CMA launched an antitrust probe into Microsoft and Amazon's cloud services in October.

The CMA probe was initiated after UK communications regulator Ofcom in July referred the cloud infrastructure market for investigation around anti-competitive practices in cloud computing to the CMA post the publication of an interim report.

The interim report said that existing cloud customers in the UK are paying more than they should be for their cloud infrastructure or having to settle for low-quality services and that the regulator had heard concerns from some customers about their inability to switch or use multiple providers.

During that time, an AWS spokesperson said the company disagrees with Ofcom's findings and believes they are based on a fundamental misconception of how the IT sector functions, and the services and discounts on offer.

AWS had also denied charging customers separate fees for switching data to another IT provider, stating that its customers make "hundreds of millions of data transfers each day in the ordinary course of business, and over 90% of our customers pay nothing for data transfer because we provide them with 100 gigabytes per month for free."

In November, Google Cloud too had shared a letter with the CMA blaming Microsoft for anti-competitive practices around cloud offerings.

In its interim report, Ofcom said that AWS and Microsoft Azure had a combined UK market share of between 60% and 70%, while the next nearest competitor, Alphabet-owned Google, has a 5% to 10% share.

The CMA, which is expected to close the investigation by April 2025, puts the UK's cloud computing market at$9.44 billion (

tag-icon Tags quentes : Indústria de Tecnologia Computação em nuvem A Microsoft Google Regulamento

Copyright © 2014-2024 Hi-Network.com | HAILIAN TECHNOLOGY CO., LIMITED | All Rights Reserved.