Microsoft’s Concessions to CISPE: A Step Towards Fairer Cloud Competition in Europe
In a significant move, Microsoft has yielded to pressure from CISPE, the organization representing Europe’s top cloud providers. This concession allows CISPE members to offer pay-as-you-go plans, align pricing with Azure, and privately host customer workloads. Despite some viewing this as just another development, it marks a pivotal moment in the ongoing battle between Microsoft and CISPE.
According to Phil Brunkard, Executive Counselor at Info-Tech Research Group UK, Microsoft’s step signifies a move towards fairer terms. The true test lies in how these changes will navigate the evolving landscape of pricing and licensing in the future.
What CISPE Achieved in the Deal
Under the new agreement, qualified CISPE members can now provide Microsoft software on a pay-as-you-go basis through the CSP-Hoster program. This initiative aims to enhance privacy for European customers and establish pricing conditions more in line with Microsoft’s Azure platform. Members gain access to pay-as-you-go licensing models for products like Windows Server and SQL Server, alongside the existing Flexible Virtualization Benefit.
Furthermore, the introduction of Microsoft 365 Local is seen as a significant step towards achieving digital sovereignty for European clients. Notably, members can host Microsoft workloads on independent European infrastructure without sharing customer details with Microsoft, addressing a core concern raised by CISPE.
The program, initially available to current CISPE members, is set to expand to eligible providers in the coming months. By excluding hyperscale cloud providers from the program, CISPE aims to bolster European cloud providers and foster competition and innovation in the region’s digital landscape.
De-escalating Years of Tensions
The conflict between CISPE and Microsoft has roots dating back several years. In response to complaints from European cloud providers, Microsoft introduced the Flexible Virtualization Benefit to allow customers to use licensed software across various cloud infrastructures. However, restrictions on pay-as-you-go terms persisted, leading to continued tensions.
Recent developments, including Microsoft’s agreement to alter cloud licensing practices to avoid an EU antitrust probe, highlight the evolving dynamics in the industry. While the introduction of Azure Local aimed to address some concerns, subsequent feedback from the European Cloud Collaboration Observatory raised doubts about its full implementation.
The latest agreement enables CISPE members to bill Windows, SQL Server, and Microsoft 365 on an hourly basis through the CSP-Hoster program. This shift is expected to simplify billing processes for customers and potentially lower overall costs, particularly for those seeking data residency with national providers.
By embracing these changes, Microsoft aims to navigate potential antitrust concerns under the DMA while providing customers with more transparent and cost-effective solutions.
What About Non-CISPE Members?
While the agreement benefits CISPE members, it raises questions about its impact on other European cloud providers. Critics, like Mark Boost from Civo, express concerns about the exclusivity of the concessions and the lack of clarity regarding benefits for non-CISPE members.
Ryan Triplette, Executive Director of the Coalition for Fair Software Licensing, views Microsoft’s actions as a stalling tactic that perpetuates restrictive licensing practices. Triplette emphasizes the need for genuine efforts to promote competition and customer choice in the cloud market.
In conclusion, Microsoft’s concessions to CISPE signal a significant shift towards fairer competition in the European cloud sector. As the industry continues to evolve, it is crucial for stakeholders to monitor how these changes impact pricing, competition, and customer choice in the dynamic landscape of cloud computing.