Microsoft has failed to fully meet its end of the bargain after striking a 2024 agreement with European cloud consortium CISPE, the group claims – saying the American hyperscaler is simply pushing an existing Azure proposition at its members rather than co-creating a product.
Redmond suggested that CISPE had misunderstood the Memorandum of Understanding (MoU) and was demanding out-of-scope additions.
“We can work together to develop additional capacities like those provided by the CISPE members, but this must work as a partnership that involves co-investment and reasonable expectations,” Microsoft said.
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Last year’s MoU came two years after CISPE lodged a formal competition complaint with the European Commission that had accused Microsoft of “discriminatory bundling, tying, self-preferencing pricing and technical… lock-in.” (Microsoft also paid CISPE $21 million to settle the dispute.)
The European Cloud Competition Observatory (ECCO) was created by CISPE to monitor delivery of 2024’s MoU and reported on progress today.
Microsoft, it said in the report, had agreed in the 2024 MoU to jointly “develop and promote a product that would allow CISPE members to offer hybrid cloud-enabled applications that realize many benefits of Azure on their own owned infrastructure [with] multi-tenancy, free ESU [extended security updates], unlimited virtualization and multi-session VDI [virtual desktop infrastructure] solutions based on Windows 10, 11 and future versions, and PAYG licensing for SQL Server.”
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Microsoft is helping CISPE members pilot Azure Local (formerly Azure Stack HCI) as the potential foundation for such a product, ECCO said.
During a December 2024 meeting with Microsoft, its members had “detailed the core functions required from any proposed Microsoft multi-tenant hybrid cloud product development…” ECCO revealed.
Specifically, it was made clear that to meet CISPE’s understanding of the commitments made in the MOU the Microsoft product needed to deliver full multi-tenancy, including but not limited to oversubscription/overcommitment of CPU and RAM, storage, and network overlapping
Microsoft suggested CISPE has seriously overestimated what the MOU covered. Its members will need to invest to co-develop features, it said.
“ These do not reflect an agreed-to set of commitments because they go beyond the product requirements and characteristics defined in the MOU… We can work together to develop additional capacities like those provided by the CISPE members, but this must work as a partnership that involves co-investment and reasonable expectations" – Microsoft, cited in the ECCO report
ECCO added in today’s report that Microsoft had told it it was still “processing and evaluating” and “digesting” CISPE’s requirements.
It also said that Redmond had told it after meeting that Microsoft’s engineering teams have a “very long list of things they are working on…”
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The ECCO report further adds that “CISPE members report that during monthly calls with Microsoft any further discussion of these key requirements is rejected with Microsoft seemingly focused on ‘pushing’ the existing product as the solution.”
Microsoft said in a comment shared alongside the ECCO report: “We are committed to ensuring a successful relationship with the European cloud community and a strong, durable and collaborative partnership with CISPE. We are reviewing the ECCO report and will work together to chart a path forward with CISPE and its members.”
The ECCO report comes days after a UK competition watchdog enquiry provisionally found that Microsoft’s “conduct is harming competition.”
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“Microsoft is using its strong position in software to make it harder for AWS and Google to compete effectively for cloud customers that wish to use Microsoft software on the cloud. This reduces the competitive challenge that AWS and Google can provide in cloud services and to Microsoft’s position,” the CMA’s independent enquiry concluded.
Microsoft's Rima Alaily, Deputy General Counsel, responded: “The draft report should be focused on paving the way for the UK's AI-powered future, not fixating on legacy products launched in the last century.
"The cloud computing market has never been so dynamic and competitive, attracting billions in investments, new entrants, and rapid innovation. What could be better for UK businesses and government?”
