Microsoft has submitted a new proposal to the European cloud organization CISPE following a complaint about anti-competitive licensing practices. The tech giant promises cost reductions for service providers, but is abandoning the technical approach in favor of a financial solution.
This is according to The Register. After a year of negotiations, Microsoft has made a new offer to CISPE, the trade organization representing more than 30 independent cloud providers in Europe. This step follows the complaint CISPE filed with European regulators in 2022 about alleged anti-competitive practices.
According to sources, the new terms are entirely financial. Microsoft will reportedly refrain from demanding customer lists from service providers and promises to reduce the Service Provider License Agreement (SPLA) rates. These rates were increased by ten percent at the beginning of this year, which led to dissatisfaction among CISPE members.
Contractual solution instead of Azure Local
A year ago, Microsoft promised to develop a special version of Azure Local (formerly Azure Stack HCI) for European hosters. This solution would include features previously only available to Azure customers, including multi-session virtual desktop infrastructure and free extended security updates.
However, the intended technical solution was not delivered within the agreed timeframe. This forced the parties back to the negotiating table, where Microsoft is now proposing a contractual approach instead of a technical solution.
The relationship between Microsoft and CISPE remains tense. AWS, formerly a board member of CISPE, recently resigned from the board after Microsoft joined the organization. This decision followed a vote in which other board members outvoted AWS to grant Microsoft admission.
Broader impact and oversight
Google previously tried to convince CISPE not to settle with Microsoft and to join their own complaint. This attempt was unsuccessful, prompting Google to file a separate complaint with the European Commission about the costs of running Microsoft software on its infrastructure.
The issue dates back to 2019, when Microsoft classified AWS, Google, and Alibaba Cloud as “listed providers.” This classification made it more expensive to run certain operating systems and applications on their infrastructure than on Azure.
CISPE has confirmed to The Register that it has received Microsoft’s proposal within the deadline and will communicate its decision “in the coming weeks.”