natali_mis – stock. adobe. com
The cloud infrastructure services industry in Europe (CISPE) is accused of promoting its subsequent members, after striking a $22 million settlement to withdraw its long-standing antitrust complaint against Microsoft.
The two signed a memorandum of understanding committing Microsoft to an enhanced edition of its Azure Stack HCI that provides the same features that users of Microsoft’s platform get in nine months.
“This collaboration will enable European cloud providers to deliver Microsoft programs and their on-premises cloud infrastructures, meet the demand for sovereign cloud responses, and address the disruption faced by European cloud providers and their consumers following Broadcom’s acquisition of VMware,” CISPE said in a statement.
The MoU responds to claims beyond CISPE that corporations and public sector organizations running Microsoft products on competing cloud platforms lack key features and end up paying more than users who host the same on Microsoft Azure.
In exchange, CISPE agreed to withdraw the letter it submitted to the European Commission’s Directorate-General for Competition in November 2022.
In the complaint, CISPE accused Microsoft of engaging in an anti-competitive habit that risked “irreparably damaging the European cloud ecosystem and depriving European consumers of choice in their cloud deployments. “
However, if Microsoft does not comply with the MOU within nine months, CISPE may resubmit its original complaint.
“An independent European Cloud Observatory will be created through CISPE to monitor the progression and continuous evaluation of the product. . . [and its members will understand] Microsoft, the cloud infrastructure operating in Europe and the representatives of European visitors’ associations,” CISPE added. .
Under the terms of the MoU, CISPE is also prohibited from initiating or supporting court cases over Microsoft’s alleged anti-competitive habit in countries.
“The agreement does not prevent CISPE or its members from complying with regulators’ requests for information and CISPE will continue to campaign for fair software licensing in the cloud,” said CISPE.
The organization noted that CISPE member Amazon Web Services (AWS) had been excluded from negotiations with Microsoft and that, like Google Cloud Platform, it would “gain advantages or be obligated” under the terms of the memorandum of understanding.
According to a report from the Reuters news site, Microsoft has agreed to pay a lump sum of $22 million to CISPE as part of the settlement to reimburse the organization for the litigation and campaign expenses it has incurred since it filed its lawsuit against the company in November. 2022. .
Francisco Mingorance, secretary general of CISPE, described the signing of the MoU as a “significant victory for European cloud service providers” and will provide a “level playing box for European cloud infrastructure service providers and their consumers. “
Mingorance added: “Microsoft has months to deliver on its commitment by providing answers that enable fair licensing terms for its European cloud productivity software infrastructures. “
In a statement, Brad Smith, vice president and president of Microsoft, spoke about the positive effect the deal is expected to have on the European cloud market.
“After working with CISPE and its European members for more than a year, I am pleased that we have only resolved their concerns further, but have also worked in combination to outline a way forward that brings even more festivity to the cloud computing market. Europe and beyond,” Smith said.
However, while CISPE and Microsoft say the deal represents a first for cloud providers on the continent, the Coalition for a Fair Software License (CFSL) is among the many parties that disagree.
The organization, which advocates for fair and transparent licensing conditions for cloud users, says the memo does not meet the criteria CISPE said it would impose on Microsoft when news of negotiations between the two men became public in April 2023.
At the time, CISPE said that any agreement with Microsoft would be principled and would apply to all cloud infrastructure providers operating in Europe, as is the case here because Amazon and Google are excluded.
CISPE also said that the agreement should also provide advantages to all consumers in Europe and ensure that all corporations have the right to run licensed software in the cloud of their choice, without monetary or technical penalties.
In addition, he said that any regulation will have to be transparent and clear, open to scrutiny, scalable and verifiable for compliance over time.
In its statement, the CFSL stated, “Microsoft has met the needs of today’s agreement. “
CFSL director Ryan Triplette said the deal is expected to replace very little in terms of how the European cloud infrastructure market works.
“This settlement is Microsoft’s latest attempt to avoid regulatory scrutiny without addressing the underlying antitrust practices that millions of cloud consumers around the world have,” he said.
“Even after this agreement goes into effect, Microsoft will continue to use its unfair software licensing practices to restrict choice, increase costs, and build visitor loyalty. A deal with some small European providers that excludes the vast majority of consumers and cloud providers is nothing to address Microsoft’s global anti-competitive behavior.
He added: “Ongoing investigations and court cases in the United Kingdom, the EU, the US. and other countries obviously demonstrate Microsoft’s widespread anti-competitive behavior and the need for comprehensive responses that apply to all cloud customers. “
Nicky Stewart, a former ICT official in the United Kingdom government’s Cabinet Office, supported the CFSL’s view and the content of the agreement left much to be desired.
“CISPE has stated that its negotiations with Microsoft would yield advantages for all users and cloud providers in Europe, however, the press release is ambiguous and it turns out that CISPE may have sold to non-CISPE European cloud providers and their downstream users. Says.
“If this is the case, it is a pyrrhic victory for CISPE. Cloud providers and consumers around the world will pay the value of a deal that is nothing more than a deal with Microsoft, giving one elite unfair merit over others.
He asked CISPE to reveal more main points about the agreement, as the lack of transparency lately poses dangers that damage the credibility of the organization.
“CISPE will damage its credentials and those of its members if it is unable or unwilling to disclose the main points of the agreement. The only winner will be Microsoft, which will receive a large fine from the EU, given that CISPE is now taking its complaint, in exchange for a measly $22 million,” he said.
“They no longer deserve closed-door agreements. Our regulators, including the CMA, will have to insist on full transparency and openness from Microsoft and CISPE on the main points of the agreement, and ensure that all cloud providers and users get the full benefits.
Mark Boost, chief executive of Stevenage-based cloud service provider CIVO, also took into account the narrowness of the deal’s scope and who will benefit.
“By entering into an agreement with Microsoft that appears to be exclusive to CISPE members, CISPE members in the EU will reap some benefits in the short term, but the cloud industry and its consumers will pay the value in the long term,” he said.
“Regardless of the position taken, we forgot what this deal looks like: a tough, global company that will pay for the silence of an advertising framework and avoid having to make basic adjustments to its software licensing practices on a global scale. “
There will have to be “fundamental changes” in how the cloud market works, he continued, because consumers lose out.
“To build a truly competitive cloud landscape, we need basic tweaks to how this market works. Hyperscalers have been operating unchecked for far too long, leaving consumers with poor technology, opaque pricing, and unpredictable billing. Many corporations simply feel trapped in employing hyperscalers, with facilities actively structured to deter switching to a vendor of choice,” he said.
“Regulators want to act, and quickly. The CMA’s cloud research may see the United Kingdom chart another path to the EU. I hope that you will not miss this opportunity and take decisive action at all levels, adding an end to the scourge of the asymmetric formula of cloud credits and anti-competitive software licenses.
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