Avoiding EU Antitrust Sanctions, Microsoft Wants To Ease Licensing For Cloud Services

Brad Smith meeting the Pope at the vatican.(photo: twitter @BradSmi)

JAKARTA - Microsoft will revise the licensing agreement and make it easier for cloud service providers to compete. This was explained by Microsoft President Brad Smith on Wednesday, May 8, as the US software giant tries to avoid a lengthy EU antitrust probe into its cloud computing business.

Microsoft was fined 1.6 billion euros (IDR 24.6 trillion) by the EU antitrust regulator in the previous decade for various violations.

Microsoft also found itself under scrutiny by the EU's competition body again after German software provider NextCloud, France's OVHcloud, Italian cloud service provider Aruba, and the Danish cloud service provider association complained to the European Commission about Microsoft's perceived monopolistic cloud practices.

"Microsoft is taking the first step, but not the last, to address the problem," Smith said at a conference hosted by think tank Bruegel in Brussels.

He recounted the "tremendous defeat" Microsoft faced in its challenge to the EU antitrust agency in 2007 that forced it to accept changes "that are much more pleasant than dropping heads".

"Microsoft wants to listen to and follow up on complaints," Smith said.

"It really starts with giving European cloud providers more options. So if any company has a data center but wants to run a solution on its cloud PBX data center, we create more options for them to do it with our software, what they want," he said.

Microsoft will help cloud providers to offer Windows and Office directly as part of a complete desktop solution that they can build, sell, and host on their infrastructure.

This will revise the licensing agreement and allow customers to use their licenses on any European cloud provider that delivers services to their own data centers. Customers will also be allowed to purchase licenses for virtual environments only without the need to purchase physical hardware.

While some cloud service providers praised the news, others said it was not enough.

"Europe's cloud adoption and development of digital capabilities is a priority for the European Union. Microsoft has a unique role to play in supporting this effort," the European Cloud Alliance, whose members include Microsoft, said in a statement.

CISPE, which counts cloud service world's providers No. 1, Amazon, OVHCloud and Aruba as members, rejected the move and urged the EU's antitrust watchdog not to abate.

"The initiative announced today fails to address in any way the unfair licensing practices at the heart of complaints and concerns among cloud infrastructure service providers and customers across Europe," CISPE Secretary General Francisco Mingorance said in a statement.

"There's no point in ending the productivity suite's anti-competitive ties to cloud infrastructure services," he said.

Asked about Slack's 2020 workplace messaging app complaint about Microsoft tying its Teams product into its Office productivity suite, Smith said the bundling fell into a different category, but gave no details.