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Google is like a dog with a bone over Microsoft's cloud licensing policies, not letting Euro regulators forget about what it sees as anti-competitive practices that penalize those wanting to run Windows software on rival cloud platforms.
The ad and cloud tech giant says it has been a year since it filed a formal complaint with the European Commission about Microsoft, and seems frustrated with the progress – or lack of it.
Google's gripe centers on the licensing strategy that Microsoft operates regarding widely used software, including Windows Server and SQL Server. This makes it more expensive to run these products on certain clouds, notably those seen as key rivals for its own Azure cloud service, such as Google Cloud and Amazon Web Services (AWS).
In particular, Microsoft permits customers to reallocate on-prem licenses they hold for software such as Windows Server to cloud-based instances running on Azure – but those wanting to do the same on AWS or Google must pay for new licenses. This means it costs up to five times as much to move legacy workloads to a rival's cloud, Google claims, serving as a major incentive for companies to choose Azure instead.
This hasn't escaped the attention of some regulatory authorities, with the UK's Competition and Markets Authority (CMA) finding last year that Microsoft's licensing was restricting cloud choice, although it has yet to impose any measure to remedy this.
The US Federal Trade Commission also kicked off an antitrust investigation into Redmond late last year.
In Europe, the Cloud Infrastructure Service Providers in Europe (CISPE) trade group representing 27 cloud operators filed its own formal complaint with the European Commission over Microsoft's licensing in 2022.
Redmond averted that crisis by doing a deal with CISPE, after which the organization withdrew its complaint. This included a payout and, latterly, different terms.
Following that deal, Microsoft was also allowed to join CISPE itself, which we guess means there won't be any further complaints coming from that quarter.
However, it did not undo the licensing restrictions on the so-called listed providers such as AWS and Google, and led to accusations that CISPE had been bought off. Google in particular expressed its unhappiness with the deal.
"Despite regulatory scrutiny, it's clear that Microsoft intends to keep its restrictive licensing policies in place for most cloud customers. In fact, it's getting worse," Google claims in a blog post marking the anniversary of the complaint being filed.
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"While some progress has been made, restrictive licensing continues to be a global problem, locking in cloud customers, harming economic growth, and stifling innovation."
But the problem is that regulators move at a leisurely pace – it is two years since the CMA announced it would conduct an investigation into competition in the UK cloud services market, for example.
It is also two years since Amit Zavery, then vice president, general manager and head of platform at Google Cloud, warned The Register that regulators were taking too long to settle matters such as this, and said it was already too late in the collaboration services market, where Microsoft had basically won.
Redmond had offered to unbundle Teams from Office/Microsoft 365 after a complaint to the European Commission from rival provider Slack. Zavery said this was "too little, too late," as Microsoft had already amassed an installed base of hundreds of millions of Teams customers.
"In the year since our complaint to the European Commission, our message is as clear as ever: restrictive cloud licensing practices harm businesses and undermine European competitiveness. To drive the next century of technology innovation and growth, regulators must act now to end these anti-competitive licensing practices that harm businesses," Google concludes on its blog.
We asked Microsoft for its response to the complaint over its licensing practices, and a spokesperson told us:
"Microsoft settled amicably similar concerns raised by European cloud providers, even after Google hoped they would keep litigating. Having failed to persuade European companies, we expect Google similarly will fail to persuade the European Commission." ®
