Microsoft’s cloud computing changes stir up a storm

Microsoft’s recent changes to its cloud contracts aren’t going down well with other tech behemoths.

Microsoft has decided to amend the terms of its licensing deals, making it easier for customers to run Microsoft software on cloud platforms beyond its own Azure. According to Microsoft, the changes “will enable new scenarios for how they can license and run workloads with infrastructure outsourcers” and are due to go into effect starting Oct. 1.

The new flexible virtualization benefits, which are meant to benefit smaller EU-based cloud service providers, exclude certain “listed providers” such as Alibaba, Amazon Web Services, Google Cloud, and Microsoft itself.

Amazon and Google’s parent company, Alphabet, criticized Microsoft’s cloud computing changes, saying they “limit competition and discourage customers from switching to rival cloud service providers,” Reuters reported.

But Microsoft likely doesn’t care what its rivals think—the plans aim to win over EU antitrust regulators. They are yet to react.

Brief history

On Feb. 1, 2010, when Microsoft launched Azure, it was among the trailblazers in the sector. Amazon Web Services (AWS) debuted much later in 2006, and Google Clouds in 2008.

While 95% of Fortune 500 companies use Azure, maintaining a stronghold hasn’t been easy for the service. AWS has quickly climbed to the top of the chart.

Complicating matters further, Microsoft has been hit with a litany of complaints in Europe. In 2019, EU antitrust regulators launched a probe into the Washington-based firm after several smaller European competitors complained that Microsoft’s licensing terms made it prohibitively more expensive to run Microsoft software such as Office on cloud platforms other than its own Azure.

Microsoft’s move is meant to appease these critics, but drew ires from other tech giants.

Quotable

“The promise of the cloud is flexible, elastic computing without contractual lock-ins. Customers should be able to move freely across platforms and choose the technology that works best for them, rather than what works best for Microsoft. At Google Cloud, we believe that openness matters, and we continue to gain customers’ trust by promoting the security, cost, and benefits of using multiple cloud providers. We urge all cloud providers to avoid locking in their customers and compete on the merits of their technologies.” —Marcus Jadotte, vice president of government affairs & policy at Google Cloud

By the digits

€1.6 billion ($1.6 billion): How much Microsoft has been fined by EU antitrust regulators over the last decade

32, 19, and 7: The cloud market share commanded by AWS, Azure, and Google Cloud respectively

715 million: Microsoft Azure users globally (as of 2017)

200: Microsoft Azure products

Fun fact

The Microsoft Cloud is connected by enough fiber to stretch to the moon and back three times.