Microsoft has revealed it will introduce new licensing terms for its Azure cloud computing service in Europe on 1 October. The changes are designed to meet EU sovereign cloud requirements and head off a potential antitrust investigation following complaints from European cloud providers.
“On 1 October, 2022, Microsoft will implement significant upgrades to our outsourcing and hosting terms that will benefit customers worldwide,” the company said in a blog post yesterday confirming the roll-out of the changes.
How will Microsoft Azure licenses in Europe change?
Microsoft made controversial revisions to its terms and conditions in 2019, which meant customers using Office 365 and its other productivity tools had to purchase an additional license to run them on a third-party cloud provider.
This was a move from Microsoft to try and convince customers to switch over to Azure from its two biggest rivals in the public cloud market – Amazon’s AWS and Google Cloud – but the charge also applied to all other European cloud providers too, which are already struggling to make in-roads against their US rivals.
Under the changes to Microsoft licenses in Europe, being introduced on 1 October, this additional charge will now only apply to AWS, Google Cloud and Chinese provider Alibaba Cloud.
Microsoft says it also eliminating an additional charge for customers who run Windows 10 and Windows 11 virtual machines in the cloud, but who don't have physical hardware provided by the company.
Why is Microsoft changing its cloud license in Europe?
The changes, first announced in May, came after a group of European cloud companies, headed by OVHCloud, filed a complaint to the European Commission in March, stating that they believe Microsoft's behaviour is anti-competitive.
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“Over the past few years, our focus on competing with the largest technology providers has resulted in us not being as attentive to the impact on our cloud provider partners. We are making changes to remedy this, beginning today," Microsoft president Brad Smith said at the time.
The changes are also designed to reflect the increasing interesting in EU sovereign cloud provisions – the idea that data from the continent is kept within the bloc for security and privacy reasons. Two years ago, 25 member states signed a declaration pledging to build the next generation of cloud technology in Europe so that the continent can reduce its reliance on US and Chinese cloud providers, and various initiatives are already underway, including GAIA-X, a regulatory and technical framework which it is hoped will be used for building the next generation of secure cloud networks.
“There’s a recognition that [the EU] is behind the US and Asia on cloud, so this is a good chance to stimulate the economy,” Valentijn de Leeuw, vice president of tech research company ARC Advisory Group, told Tech Monitor last year.
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