[German]Does Microsoft face legal trouble from the CISPE, misses deadline for EU-specific cloud version? Microsoft has failed to provide an adapted Azure version for the consortium of European cloud providers by an agreed deadline. They are now granting additional two months for Microsoft to come out with a proposal, otherwise the are threatening legal action.
Review: CISPE lodged a complaint
CISPE is the abbreviation for Cloud Infrastructure Services Providers in Europe, a non-profit association of Infrastructure-as-a-Service cloud providers in Europe. CISPE seeks to represent the interests of its members. Its members include a number of European cloud providers and Amazon.
At the end of 2022, the CISPE filed a complaint against Microsoft with the European Commission, claiming that the contractual terms introduced by Microsoft on October 1, 2022 would harm the European cloud computing ecosystem. I assumed that the EU Commission would launch a formal investigation against Microsoft to investigate this further and, if necessary, stop the practices.
In July 2024 came the big surprise, as Reuters reported that Microsoft had reached a settlement with CISPE. Microsoft will pay CISPE €20 million to settle an antitrust complaint about its cloud computing licensing practices, averting an EU antitrust investigation and a potentially hefty fine. In addition, Microsoft is compensating CISPE members for the lost revenue they have incurred from licensing costs over the past two years, CISPE announced at the time.
The more exciting part of the deal, which I mentioned in the German blog post Hat sich das europäische Cloud-Konsortium CISPE von Microsoft für 20 Millionen Euro kaufen lassen? (Did the European cloud consortium CISPE let Microsoft buy it for 20 million euros?): Microsoft agreed to to develop a product that will enable CISPE members to run Microsoft software on their platforms in the US tech giant's Azure cloud infrastructure. The prices are to match those of Microsoft. The company had nine months for this development.
Deadline for EU-customized CISPE solution missed
Now The Register reports here that Microsoft has failed to deliver this special Azure version (formerly known as Azure Stack HCI) for CISPE's EU cloud providers on time. The product is essential for CISPE as it is said to include features that were previously only available to customers of Microsoft's own Azure service. The solution should include multitenancy support for multiple customer workloads, unlimited virtualization and multi-session VDI for Windows 10, 11 and future versions, pay-as-you-go licensing for SQL Server and free advanced security updates, according to The Register.
But so far, nothing has come of it because Microsoft is not delivering. The Register writes that Microsoft had committed to completing the customized Azure platform by mid-April 2025. Sources warned The Register back in early April that Microsoft would not be able to meet the agreed deadline. According to my reading, too few developer resources were invested.
The Register quotes from the latest report by the European Cloud Collaboration Observatory (ECCO). This is an independent body set up by CISPE to produce technical progress reports for its 37 members. This body had bluntly stated Microsoft's fail. "Both Microsoft and CISPE have now agreed that Azure Local will not provide the full functionality of the agreement," the ECCO report states.
Microsoft and CISPE have agreed on Plan B, according to The Register. The originally planned hoster product will be abandoned "to focus on alternative, commercially equivalent approaches, and to meet the fair licensing obligations set out in the agreement," the ECCO report continues.
Francisco Mingorance, Secretary General of the CISPE, said according to The Register that it was disappointing that the proposed product did not materialize. But this is not the end of the agreement. Phase 2 opens the door to discuss alternative, commercially equivalent solutions. These should allow CISPE members and European cloud infrastructure providers to compete fairly while still offering Microsoft's productivity tools to their customers.
However, in an interview with The Register, Mingorance expressed frustration with the whole process: "Probably many of the companies in CISPE see Plan B as a better outcome than running more software and more Microsoft software on top of it. Azure Local requires dedicated hardware, so you have to spend a lot of money to upgrade or change your infrastructure. "But so far, nothing has come of it because Microsoft isn't delivering. The Register writes that Microsoft had committed to having the customized Azure platform ready by mid-April 2025. Sources warned The Register back in early April that Microsoft would not be able to meet the agreed deadline. According to my reading, too few developer resources were invested.
But if a third-party cloud provider could run the same workload as on Azure without anyone having to pay Microsoft extra for the privilege, then the problem would no longer exist, says Mingorance. "There has already been a demand from European cloud provider customers to run as much Microsoft software locally as possible, rather than on the servers in Redmond."
Microsoft is probably not keen on this idea, Mingorance speculated, according to The Register. "They want to drive as much traffic as possible to Azure. And the best way to do that? By getting everyone to run Microsoft software on the Azure platform and not on a competing platform."
Microsoft now has less than two months to submit proposals for Phase 2 or Plan B. Proposals must be submitted by July 10, 2025, the first anniversary of the MoU.
A Microsoft spokesperson sent The Register the following statement: "We are committed to ensuring a successful relationship with the European cloud community and a strong, enduring and collaborative partnership with CISPE. We are reviewing the second ECCO report and look forward to the new journey with CISPE and its members."
It remains to be seen what will be on the table in July 2025. If necessary, CISPE could make a further formal complaint to the EU.
