Arthur T Knackerbracket has processed the following story:
A group of cloud infrastructure providers in Europe has delivered an ultimatum to Microsoft: End the "unjustified feature and pricing discriminations against fair competition" or face legal action.
With 27 member organizations – including 26 headquartered in the region plus US-based AWS – Cloud Infrastructure Providers in Europe (CISPE) is a non-profit industry group based in Brussels. It filed a complaint against Microsoft with the EU's antitrust cops in November 2022.
That complaint laid out how Microsoft discounts its own software when bundled with its own Azure cloud services – meaning it is more expensive to run Redmond’s wares in rival clouds. The Windows goliath tried to settle the case out of court last May. CISPE told The Register Microsoft's offer was "paltry" and rejected it.
The parties recently resumed negotiations, and the timing of today's statement to The Register seems designed to ratchet pressure on Microsoft's lawyers to offer bigger concessions. CISPE told us it used the Azure Pricing Calculator to highlight the pricing disparity at the heart of the issue – see the table below, provided by CISPE.
It shows, if CISPE is right, that although a member of the cloud association – a rival of Azure – can offer remote desktop virtual machines at lower cost than Microsoft, the red-tape put in place by Redmond leaves the competing provider worse off for customers in comparison, causing the rival to potentially lose sales to Azure.
"According to the Azure Pricing Calculator with the multi-session capabilities allowed on Azure, a customer can run a typical virtual desktop implementation supporting 32 users using just three virtual machines," the group explained.
"The licensing restrictions on multi-session use of Microsoft software outside of Azure impose on CISPE members to provision 32 virtual machines – that is ten time more machines – to support the same number of users. Even with lower cost hardware (VM cost per hour) the cost of supporting 32 users for a CISPE member is 2.5 times higher than what Microsoft charges."
The dominance of Microsoft software in the enterprise means cloud infrastructure providers often need to accommodate customers' IT estates that inevitably include Office, Windows, and more. That's software Microsoft ensures is cheaper to run on Microsoft's Azure cloud compared to rivals, according to CISPE, hence that group's unhappiness.
CISPE members are similarly upset about the price of service provider license agreements, arguing Microsoft charges double digit percentages more to run SQL Server Enterprise licensing on non-Azure servers. Again, here's a table from CISPE advancing those claims.
"These figures are just the tip of the iceberg," Francisco Mingorance, secretary general of CISPE, told The Register. "This data represents prima facie evidence that Microsoft is acting against fair competition.
"The unjustified feature and pricing discriminations imposed by Microsoft on its dominant software, Office and Windows, outside of Azure, squeeze the margins of rival cloud infrastructure providers, lock in customers and raise prices."
"It is clear that there is a straightforward competition case here and that if these unfair licensing practices are not immediately ended by Microsoft voluntarily, legal and regulatory action should swiftly follow," he declared.
[...] The EU anti-trust team and competition authorities at the US Federal Trade Commission are also running investigations into Microsoft's cloudy licensing offers.
(Score: 4, Interesting) by Mykl on Monday March 11 2024, @09:51PM (1 child)
Microsoft, you say? Anti-competitive? That can't be right!
What I find most amazing of all is that they have been so blatant about it this time, and are deciding to continue running the scheme as long as they possibly can. This seems like a classic open-and-shut case of abusing market power in one part of your business to prop up another - exactly what they ended up being hit for with Internet Explorer and Win95.
(Score: 4, Informative) by krishnoid on Monday March 11 2024, @10:13PM
I too am shocked, shocked! Well, not that shocked [cnn.com].
(Score: 5, Interesting) by Adam on Monday March 11 2024, @10:01PM
It'd take several years for a lawsuit to work through the court system. In the meantime, Microsoft is both getting more business and stifling competitors. Probably better for them to drag it through the court system and pay the fine to the state than to capitulate and fund their competitors today.
(Score: 2, Insightful) by anubi on Tuesday March 12 2024, @01:00AM
They set and enforce laws over their jurisdictions.
They can decide to protect or ignore business interests... Like patent or copyright.
Tit for that... Someone makes bad product and sells it here, we don't consider it a violation of our law if they fix it. Or share the fix.
All that fancy business talk in the contract, like noncompete clauses in some States of the USA are simply unenforceable.
I guarantee you THAT will get their attention!
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
(Score: 1, Disagree) by ChrisMaple on Tuesday March 12 2024, @07:59PM (2 children)
If they charge less than competitors, it's evidence they're trying to establish a monopoly. If they charge more. it's evidence that they've established a monopoly. If they charge the same, it's evidence of collusion.
The EU has decided to wage war against Microsoft. Perhaps Microsoft deserves it, but Microsoft does not deserve to be attacked by irrational laws.
(Score: 3, Insightful) by janrinok on Tuesday March 12 2024, @08:10PM (1 child)
Microsoft can hardly claim to be playing on a level playing field - and the slope is definitely in their favour. There is a simple solution. Microsoft don't have to do business in Europe if they do not wish to do so.
Europeans see things very differently from Usians in many ways. Holiday (vacation) entitlements (with pay), far shorter working hours, maternity/paternity leave, to name but a few. And playing from a level playing field too it seems.
I am not interested in knowing who people are or where they live. My interest starts and stops at our servers.
(Score: 1) by khallow on Thursday March 14 2024, @02:27PM
Or they can stonewall or whatever games they need to play to keep the gravy flowing. More complicated, but sounds like it would be more profitable too.
We'll see how that works for the two of them in the future.