According to the report, the licensing requirements for Microsoft Azure cost cloud users more than one billion euros yearly.
Wednesday was the day that Google informed the European Commission of its intention to file a complaint against Microsoft. According to the document, Google accused Microsoft of making it impossible for cloud users to migrate their work from Azure to other providers, such as Google Cloud, because of the excessively high cost involved.
Google asserts that the licensing restrictions for Microsoft’s cloud service prevent European customers from migrating to other cloud platforms, despite the fact that there are “no technical barriers to transitioning.” A blog post written by Google to clarify their complaint stated that Microsoft’s business tactics had “significantly harmed European companies and governments.” According to Google, these activities have resulted in annual losses of one billion euros ($1.1 billion) for European businesses, as well as the waste of taxpayer money and the suppression of competition.
The cloud market in Europe is led by Amazon Web Services (AWS). Azure, which is owned by Microsoft, comes in second, and Google comes in third. During the second quarter of 2024, Oracle, Salesforce, and IBM rounded out the top six.
A representative of the European Commission confirmed to newtechmania on Wednesday that the European Union’s governing body had received the complaint that was filed by Google. “We will evaluate it in accordance with our standard procedures,” wrote Lea Zuber, a spokesperson for the European Commission.
In their case, Google made reference to a settlement that had been reached between Microsoft and CISPE (Cloud Infrastructure Service Providers in Europe), which is the trade group for the cloud business in Europe. Late in the year 2022, the latter organisation lodged a complaint against Microsoft, alleging that the latter had engaged in anti-competitive tactics with Azure. These allegations are eerily similar to those that Google has lodged today. The complete particulars of the settlement, which resulted in the CISPE retreating from its complaint, were not disclosed to the general public. Microsoft would make modifications to address its concerns, according to a letter that was written by CISPE in July. There was also the possibility of launching an improved version of the Azure Stack HCI, which would make available to European cloud providers the same features that are available to Microsoft’s customers.
Microsoft expressed their optimism that the European Commission would dismiss Google’s lawsuit in a statement that was provided to newtechmania. “Microsoft settled amicably similar concerns raised by European cloud providers, even after Google hoped they would keep litigating,” a spokeswoman for Microsoft wrote. This statement was in reference to a report from Bloomberg that stated Google proposed a $500 million alternative agreement in order to keep the antitrust complaint alive. Having been unsuccessful in convincing European businesses, we anticipate that Google will also be unsuccessful in convincing the European Commission, according to a statement written by a representative for Microsoft.
Windows Server is the primary focus of Google’s complaint, according to the company. Microsoft has altered its business processes in response to the growing profitability of cloud computing, as stated by the corporation, which describes it as “a workhorse that is essential in many information technology environments.” In response to the increased competition that Azure was facing, Microsoft established new restrictions that drastically restricted the options available to customers, as Google wrote.
The licensing terms that Microsoft introduced in 2019 “imposed extreme financial penalties” on businesses who wished to utilize Windows Server software with Azure competitors like Amazon Web Services and Google Cloud, according to Google. Both of these firms are competitors of Microsoft. “Microsoft’s own statements indicate that customers who want to move their workloads to these competitors would need to pay up to five times more,” Google claimed, citing an archived webpage from 2023 that compared the cost of Azure to that of Amazon Web Services (AWS). Microsoft, according to Google, also restricted the availability of security patches and established additional obstacles to choice among cloud providers.
Google also provided a link to study conducted by Professor Frédéric Jenny, a French economist who serves as the chair of the Competition Committee of the OECD. clients who license software to run on cloud infrastructure from independent service providers are allegedly subjected to “unfair, additional costs,” according to the findings of the study. These clients include European enterprises and government entities. A statement made by Professor Jenny stated that those who opted for cloud providers that were not Microsoft “sucked an additional €1,010,394,489 out of the European economy in 2022.”
According to a post that was published on Wednesday by Amit Zavery, the Head of Platform for Google Cloud, Microsoft’s tactics restrict innovation, harm cybersecurity, and lock consumers into Azure solutions. In addition, Zavery gave an interview to CNBC, where he advocated for a more open market for cloud service providers. “The restrictions that are in place today do not permit customers to have a choice,” he stated. According to Zavery, Microsoft’s limits should be lifted, and consumers should be able to have and select any cloud provider that they believe to be the most suitable for them in terms of both commercial and technological considerations.