What exactly did Microsoft promise CISPE in its settlement?

Analysis Microsoft's deal to settle an antitrust complaint taken to the European Commission by a group of cloud providers is good for Microsoft, but no so meaningful for enterprise customers, says a well respected analyst.

The Cloud Infrastructure Services Providers in Europe (CISPE) organization, which represents 27 members, filed the complaint with the EC in November 2022.

Microsoft's maneuvering is undoubtedly impressive. For a relatively small payout — we've seen claimed figures ranging from 10 million euros to 30 million US dollars — the company managed to get CISPE's complaint over alleged anticompetitive behavior withdrawn. AWS, Google, and Alibaba were excluded from the settlement.

The complaint centered on the higher cost of running Microsoft software in public clouds outside of Microsoft Azure.

Some onlookers are unimpressed by the deal. Directions on Microsoft analyst Wes Miller said, "At the end of the day, the settlement is nothing."

"It won't affect so-called listed providers and just promises to give a few Azure exclusives to the smaller 'authorized outsourcers.' It's unclear what this settlement actually resolves other than a legal threat."

The cloud giants — Microsoft, AWS, and Google — enjoy market dominance in Europe despite regular complaints by regulators. However, running Microsoft software on the likes of listed providers that include AWS and Google is not covered by the settlement. Instead, European cloud providers will — if Microsoft sticks to its nine-month promise — get an enhanced version of Azure Stack HCI for European cloud providers dubbed Azure HCI Stack for Hosters.

Sources with knowledge of the matter told The Register earlier this week that a higher value deal was on the table from Google to keep the complaint alive, but it was rejected in favor of Microsoft by CISPE members, who apparently valued CISPE's independence over half a billion euros' worth of credits spread over five years alongside a more considerable lump sum payment upfront.

• Goodbye Azure AD, Entra the drag on your time and money
• Microsoft wasn't CISPE's only suitor – it seems Google was willing to pay for its views on cloudy licensing to prevail
• Google: We're still working to defeat Microsoft's 'anticompetitive' cloud policy
• Microsoft avoids formal antitrust EC probe over abusive licensing claims by settling case with CISPE

Mary Jo Foley of Directions on Microsoft wrote, "It's unclear if there are other hidden terms in the agreement," which is a fair point to raise considering what CISPE members apparently turned down in favor of Microsoft's deal. Another source described Google's offer as staggering and laughed, "When did Google become a not-for-profit company?"

Our source also noted that the settlement did not address every issue, with question marks still surrounding services such as Microsoft Entra. However, they did describe the settlement as a significant step forward in solving the problem of licensing Microsoft's productivity software for some cloud providers. Even if AWS and Google were notable exceptions.

According to our source, Microsoft has a "different relationship" with its rival tech giants compared to CISPE's members and their comparatively smaller European market share. ®

PS: Speaking of Microsoft, the Windows giant has reportedly axed its diversity, equity and inclusion (DEI) team, whose lead lamented in a leaked email that the equality initiative was "no longer business critical." Redmond said its commitments to diversity were unchanged.