A company attempting to avoid a lengthy EU antitrust Inquiry into its cloud computing business.
Microsoft will change its licensing agreements to make it simpler for cloud service providers to compete, according to its president, Brad Smith, as the company tries to avoid a lengthy EU antitrust investigation into its cloud computing business. According to several reports in the previous decade, EU antitrust regulators penalized Microsoft 1.6 billion euros ($1.7 billion) for a number of infractions.
After German software supplier NextCloud, France’s OVHcloud, Italian cloud service provider Aruba, and a Danish cloud service provider organization complained to the European Commission over Microsoft’s cloud operations, the business found itself under examination once more. Smith stated further in a conference organized by research tank Bruegel in Brussels that Microsoft was taking the first, but not the last, step to address the concerns. He recalled Microsoft’s “amazing setback” in a lawsuit against the EU antitrust commission in 2007, which prompted the company to embrace transformation “which is a lot more pleasant than beating heads.”
According to Smith, Microsoft wants to address these issues and take action. with a strong plan of providing better services to the European cloud. So, if a company has a data center but wants to operate solutions in its cloud PBX data center, they will provide them additional alternatives with software to do so, because that’s what the company has been asking for,” he added.
Microsoft will assist cloud providers indirectly by offering Windows and Office as part of a full desktop solution that they can create, sell, and host on their infrastructure.” It will rewrite licensing agreements to allow clients to use their licenses with any European cloud provider that provides services to their own data centers. Customers will be able to purchase licenses just for the virtual environment, eliminating the need to purchase actual gear.
While some cloud service providers applauded the announcement, others argued that it was insufficient. “It doesn’t do anything to end the anti-competitive linking of productivity suites to cloud infrastructure services,” he said. When asked about Slack’s 2020 complaint against Microsoft’s integration of its Teams software into its Office productivity suite, Smith stated about a distinct category but didn’t elaborate.
Microsoft further in its blog post stated about cloud services saying The modifications we’re making today on behalf of European Cloud Providers are based on feedback we received during discussions with a number of them across Europe. I gathered with other senior Microsoft executives so that I could attend remote meetings with the CEOs of two European suppliers. In recent weeks, we’ve also reached out to additional business leaders and dispatched a team to meet with corporations and groups across the globe.
For me, some of the most striking criticism came from a CEO who stated he “felt like a victim of friendly fire in Microsoft’s struggle with Amazon.” It was difficult to hear, but he was correct. Our focus on competing with the competition has shifted in recent years.
As a result of our focus on the top technology providers, we have become less aware of the impact on our cloud provider partners. Beginning today, we are making changes to address this. This response caught an essential component of current cloud rivalry, as shown in the graph below from the Financial Times last month. With just over 20% market share of worldwide cloud services sales, Microsoft is a strong number two in the cloud services market. Every day, we fight with Amazon, which has regularly collected around 33% of those revenues. Google, for its part, has been increasing its cloud services revenue share and now ranks third.
