Exclusive Microsoft has tabled a fresh set of commercial terms for an association of cloud providers in Europe that earlier filed a complaint with antitrust authorities in the trading bloc over allegations of anti-competitive licensing practices.
The Cloud Infrastructure Service Providers of Europe, aka CISPE, is a trade body that acts on behalf of 30 plus independent traders in the region, and which also counts AWS – and latterly Microsoft – among its membership. It first documented its frustration with the Windows-maker’s market moves in November 2022.
Its complaint centered on Microsoft allegedly charging service providers more to run its software – including Windows Server, Exchange, and SharePoint – on clouds outside of Azure, although other issues were also raised over the terms Microsoft offers.
A threat of legal action was quelled a year ago this week on the understanding that Microsoft would build and promote a new version of Azure Local, formally known as Azure Stack HCI, for European hosters. It was to include features previously only available to Azure customers. This was to include multi-session virtual desktop infrastructure based on Windows 11, free extended security updates and pay-as-you-go licensing for SQL Server.
Yet Microsoft failed to develop that in the allotted timeframe and so CISPE and Microsoft went back to the drawing board. Now the US corporation has returned with a fresh offer, CISPE confirmed to The Register.
“CISPE confirms that it has received a proposal from Microsoft within the deadline demanded by the memorandum of understanding signed in July 2024. It is reviewing Microsoft’s proposal and will communicate its decision in the coming weeks,” the trade group told us.
This agreement will be financial, not technically based. CISPE refused to discuss the contents or answer questions we discussed with a spokesperson.
Sources told us they heard that Microsoft will no longer require service providers to send their customer lists to Microsoft – a bone of contention for some – and providers will benefit from a reduction in Service Provider License Agreement fees. Microsoft had bumped up SPLA prices by ten percent in January, including for CISPE members, something the group complained about.
“CISPE members thought the original settlement with Microsoft exempted them from SPLA increases,” a source said. “Unclear how much of a reduction this is, or if CISPE members will face additional fee increases in the future.”
A contractual solution was originally sought by CISPE before the promise of a custom-built Azure Local solution was floated.
“If the contractual solution doesn’t offer the same functionality as Azure Local, bravo Microsoft for promising one thing so the lawsuit goes away but running out the clock and delivering something else. If it offers the same, then it confirms Microsoft’s restrictive licensing practices are contractual, not technical, and specifically discriminatory against Azure’s main competitors.”
Those main competitors are AWS and Google. AWS was previously on the board at CISPE but took a backseat after it was outvoted by other board members to let Microsoft join the group following their initial settlement agreement.
Google had tried to convince CISPE not to settle its complaint with Microsoft and to join the association, though that didn’t work out in Google’s favor. The Alphabet arm separately complained to the EU about the cost of running Microsoft software in its infrastructure. This harks back to changed Microsoft made in 2019, when it classified AWS, Google, and Alibaba Cloud as listed providers, meaning it was more expensive to run certain operating systems and applications on their infrastructure than Azure.
The UK’s Competition and Markets Authority, as well as the FCC in the US, are also paying close attention to the issue.
A Microsoft spokesperson told The Reg: “We are committed to ensuring a successful relationship with the European cloud community and a strong, durable and collaborative partnership with CISPE.” ®