Faced with European antitrust scrutiny, Microsoft has made it easy to virtualize its software on a non-Microsoft cloud infrastructure, as long as that infrastructure is not owned by well-known rivals Amazon, Google or Alibaba.
The conflict, brewing for months, is startling for a company that largely avoided antitrust scrutiny from its competitors and sought to distance itself from the anticompetitive complaints and government actions that plagued Microsoft in the late 1990s.
Microsoft described the changes, which will take effect on October 1st , in a blog post. Nicole Dezen, Director of Partner Operations, wrote that Microsoft “believes in the value of the partner ecosystem”and has changed its outsourcing and hosting terms to “benefit partners and customers worldwide.”
According to Desen, the new licensing terms will make it easier for Microsoft enterprise customers to migrate Microsoft software to a non-Microsoft infrastructure and scale the cost and size of their Microsoft systems or their customers’ Microsoft systems on their own hardware.
But Microsoft wants to make something clear: its Service Provider License Agreement (SPLA) is for customers who offer hosting “in their own data centers”rather than buying Microsoft licenses to “host in someone else’s data centers.”To “strengthen the hosting ecosystem,”writes Desen, Microsoft will forgo the ability to outsource to Alibaba, Amazon Web Services, Google, the Microsoft Azure cloud, or anyone who uses these companies as part of their hosting.
Amazon and Google have spoken out and do not believe that Microsoft is showing its new, less anti-competitive side.
“Microsoft is now doubling down on the same harmful practices by imposing even more restrictions in an unfair attempt to limit the competition it faces, instead of listening to its customers and restoring fair software licensing in the cloud for everyone,”an Amazon spokesman said . .
Marcus Jadotte, vice president of government relations and policy for Google Cloud, tweeted : “The cloud promises flexible, elastic computing without contractual restrictions.”Customers should have freedom of movement and choose what’s best for them, “not what works for Microsoft,”writes Jadotte.
Microsoft describes its upcoming license changes as a “response to partner feedback,”without mentioning previous licensing changes that have caught the attention of EU antitrust law. Changes to Microsoft’s licensing terms in October 2019 increased the cost of using Microsoft services in non-Microsoft “hyperscale”infrastructure. The Microsoft Azure provider was included in the list of higher prices, but customers often received a separate discount that offset most of the increase.
ZDNet’s Mary Jo Foley notes that many customers didn’t notice price hikes until their licenses were renewed, many of them this year.
Responding to EU inquiries in May, Microsoft President Brad Smith wrote on the Microsoft EU Policy Blog that “while not all of these statements are valid, some are valid and we will be sure to make changes shortly to address them.”The changes Smith described were aimed at “European cloud providers”such as OVHcloud, who had contacted the EU about licensing Microsoft. In other words, small and medium vendors, not other companies that Microsoft competes with for 65 percent of the global cloud.
The European Commission continues to investigate Microsoft’s business practices. CISPE, a European cloud provider group of which Amazon is a member, told Bloomberg in a statement this week that Microsoft’s new system “not only shows no progress in addressing Microsoft’s anti-competitive behavior, but may add new dependencies that will further exacerbate situation.”block customers and arbitrarily exclude cloud infrastructure providers.”