European cloud consortium secures Microsoft compromises, yet software licensing advocate dismisses their actions as a tactics delay
In a significant development, Microsoft has reached an agreement with the Cloud Infrastructure Services Providers (CISPE) in Europe, opening up new opportunities for European cloud providers. This agreement, set to take effect from June 2025, comes after years of negotiations and conflict over Microsoft's licensing practices.
Key aspects of the agreement include the introduction of pay-as-you-go licensing models for major Microsoft enterprise applications such as Windows Server and SQL Server. These models will be offered to CISPE members at pricing levels comparable to Microsoft's own Azure cloud platform, enabling European cloud providers to compete more equitably.
The agreement also includes the Flexible Virtualization Benefit, which allows European vendors greater flexibility in how they deploy Microsoft software on cloud infrastructure. Furthermore, Microsoft 365 Local is set to be introduced, allowing business customers to install Microsoft 365 directly on local European cloud infrastructure, enhancing digital sovereignty.
However, the agreement remains exclusive to European cloud providers, deliberately excluding hyperscale cloud providers. This exclusion is intended to promote regional innovation and fair competition for European cloud vendors.
Despite these improvements, some industry experts have raised concerns. Nicky Stewart, Senior Advisor to the Open Cloud Coalition, believes that opaque side deals cannot deliver a level playing field and only market-wide antitrust remedies will deliver real choice and fair pricing. Ryan Triplette, Executive Director of the Coalition for Fair Software Licensing, shares similar sentiments, claiming that Microsoft's concessions are stalling tactics meant to avoid regulatory scrutiny and disingenuously pretend these actions promote European competition.
One area of ongoing concern is identity management. Although the agreement does not remove the technical tie-in between Entra ID (formerly Azure Active Directory) and Microsoft 365, this limitation on user choice in ID management remains a point of contention for some critics in the cloud community.
CISPE is yet to secure an arrangement for ID management with Microsoft, and the Flexible Virtualization Benefit, which allows users with existing licenses to choose a European provider without having to purchase new licenses, does not address this issue directly.
In summary, while the agreement between Microsoft and CISPE marks a significant step towards addressing pricing equity, data sovereignty, and licensing flexibility, concerns remain about whether it fully resolves all issues, particularly those related to identity management. The debate continues, with critics arguing that more comprehensive changes are needed to ensure a level playing field for all players in the European cloud market.
- The agreement between Microsoft and CISPE, effective from June 2025, introduces pay-as-you-go licensing models for softwarelike Windows Server and SQL Server, placing European cloud providers on a more equal footing with Microsoft's own Azure cloud platform.
- In addition to the pay-as-you-go models, the agreement offers the Flexible Virtualization Benefit, providing European vendors with greater flexibility in deploying Microsoft software on cloud infrastructure, and Microsoft 365 Local for local installation on European cloud infrastructure, boosting digital sovereignty.
- Notably, this agreement is exclusive to European cloud providers, intentionally excluding hyperscale cloud providers to foster regional innovation and fair competition.
- Nevertheless, industry experts like Nicky Stewart and Ryan Triplette have expressed concerns that Microsoft's concessions may not be sufficient, claiming that the agreement is a stalling tactic to avoid regulatory scrutiny and maintain control over the market, particularly with regards to identity management, where concerns about user choice persist.
