NIX Solutions: Microsoft Joins CISPE Amid Cloud Market Tensions

Microsoft has recently been accepted as a new member of CISPE (Cloud Infrastructure Services Providers in Europe), an association primarily comprising small cloud providers. Despite historical tensions and previous anti-competitive complaints, the company has secured a position within the organization, though not without controversy.

NIX Solutions

Strategic Membership and Market Dynamics

The goal of CISPE is to promote cloud services in Europe, where AWS, Microsoft, and Google currently dominate over 70% of the cloud market. The ten-member board voted to include Microsoft, though the decision was not unanimous. AWS notably voted against the application, citing disagreements with Microsoft’s cloud software licensing practices. Microsoft welcomed its non-voting membership and promised to build a constructive partnership that could support European cloud service providers.

Ongoing Licensing Controversies and Future Implications

Previously, CISPE and AWS had criticized Microsoft’s software licensing practices, which involve significantly higher fees for using Microsoft software outside of Azure, reminds NIX Solutions. In November 2022, CISPE filed a complaint with the European Commission. However, after negotiations, Microsoft persuaded most members to enter a settlement agreement that included potential payments, improved Azure services, and a two-year suspension of licensing audits. A commissioned study suggested that European public sectors and businesses overpay up to €1 billion annually on Microsoft software outside Azure.

Interestingly, Google previously attempted to join CISPE but was unsuccessful, subsequently joining the Open Cloud Coalition (OCC). We’ll keep you updated on how Microsoft’s membership might influence future cloud market dynamics and licensing practices in Europe.