Microsoft Joins European Cloud Provider Coalition CISPE Following Licensing Dispute Settlement

Microsoft joins CISPE, a coalition of European cloud service providers, aligning on EU cloud migration initiatives.

Microsoft is joining the Cloud Infrastructure Services Providers of Europe (CISPE), a trade group representing the interests of European cloud providers, according to The Register.

The move, approved by CISPE’s board of directors, follows a settlement addressing longstanding complaints about Microsoft’s cloud licensing practices.

However, the decision to admit Microsoft has sparked mixed reactions among CISPE members, with Amazon Web Services (AWS) voting against the inclusion and several smaller providers expressing concerns about the implications for competition in the European cloud market.

A spokesperson for CISPE described the decision as an opportunity to represent the entirety of Europe’s cloud ecosystem, including major industry players.

“There are many areas where we are very much in alignment, so it is useful to have Microsoft participate,” the representative said, specifically citing collaboration on the Cloud Switching Framework, an EU initiative to facilitate compliance and simplify cloud migration.

However, the decision was far from unanimous, and AWS, one of CISPE’s founding members, declined to publicly comment on its opposition to Microsoft’s membership.

The Settlement That Paved the Way

Microsoft’s membership in CISPE comes after the company negotiated a settlement to resolve a 2022 complaint filed by the organization with the European Commission.

CISPE had accused Microsoft of anti-competitive practices, including charging up to five times more for running its software on non-Azure platforms and implementing technical barriers that complicated migration to rival cloud providers.

The settlement reportedly includes a payment of up to €30 million, enhancements to Microsoft’s Azure Local services, and a two-year suspension of licensing audits for CISPE members.

Azure Local, a hybrid cloud platform designed to allow businesses to deploy Azure services on-premises or in localized data centers, has been presented as a critical component of Microsoft’s efforts to address European compliance needs.

These enhancements aim to provide flexibility and support for regional cloud providers, but skeptics argue that they do not fully resolve the competitive disadvantages posed by Microsoft’s licensing practices.

As part of the settlement, CISPE established the European Cloud Observatory to monitor Microsoft’s compliance with these agreements, with its first report due later this month.

AWS and Other Critics Question CISPE’s Direction

AWS, one of Microsoft’s fiercest competitors in the cloud market, opposed Microsoft’s inclusion in CISPE.

While AWS declined to issue a formal statement, insiders have suggested the company is concerned that Microsoft’s membership could undermine the trade group’s original mission of advocating for fair competition and data sovereignty.

Some smaller cloud providers within CISPE echoed these concerns, with one member stating, “What value can CISPE be for European cloud providers? It seems like a stooge for Microsoft now.”

Others have questioned the timing of Microsoft’s membership, arguing that it raises doubts about the integrity of the settlement process.

While CISPE’s spokesperson defended the decision as strengthening the group’s oversight capabilities, internal divisions highlight the tension between smaller cloud providers and hyperscalers like AWS and Microsoft, which together dominate over 70% of the European cloud market.

Google’s Failed Bid and Continued EU Pressure

The broader context of Microsoft’s entry into CISPE includes failed efforts by Google to join the organization in 2024.

Sources indicate that Google offered financial incentives, including cash and cloud credits, in an attempt to secure membership and encourage CISPE to continue its legal challenges against Microsoft. When CISPE rejected Google’s bid, the company escalated its objections, filing a formal complaint with the European Commission in September 2024.

Google’s complaint accuses Microsoft of tying key software, such as Windows Server, to its Azure cloud services, restricting customer choice and limiting competition.

Google has also criticized Microsoft’s 2023 updates to its Cloud Solution Provider program, which were intended to expand hosting rights for third-party vendors. According to Google, these adjustments were insufficient and left Azure’s competitive advantages largely intact.

Microsoft has defended its licensing practices, arguing that they ensure equitable use of its intellectual property while supporting innovation.

A spokesperson for the company emphasized its commitment to collaborating with CISPE in a comment to The Register, stating, “We are grateful to the CISPE membership for accepting our application as a non-voting adherent member and will continue to focus on building a constructive partnership that supports European cloud providers.”

The Path Ahead for Europe’s Cloud Industry

As Microsoft settles into its new role within CISPE, the trade group faces the challenge of balancing the interests of smaller cloud providers with those of hyperscalers.

The European Cloud Observatory’s upcoming report is expected to shed light on whether Microsoft’s settlement terms effectively address the concerns raised in the 2022 complaint.

Meanwhile, the broader dynamics of the European cloud market remain contentious, with AWS, Microsoft, and Google vying for dominance amid ongoing regulatory scrutiny.

The decision to include Microsoft has raised fundamental questions about CISPE’s ability to advocate for fair competition. Some members see the move as a pragmatic step toward ensuring compliance and fostering dialogue, while others worry that it signals a shift away from the organization’s original mission.

As one CISPE insider commented to The Register, “What value can CISPE be for European cloud providers? It seems like a stooge for Microsoft now.”

Markus Kasanmascheff
Markus Kasanmascheff
Markus has been covering the tech industry for more than 15 years. He is holding a Master´s degree in International Economics and is the founder and managing editor of Winbuzzer.com.

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