The latest turn in the tech industry’s pits Google against Microsoft as the latter is accused of breaking the rules in the cloud computing field – Google has filed an antitrust complaint against Microsoft in the European Commission. But what’s really going on? Okay, let’s separate it all to make as much sense to everyone as possible.
The Cloud Tug-of-War
Google says that Microsoft is using licensing techniques to constrain competition in cloud solutions. Google has accused Microsoft of using its dominance to block enterprises from using any cloud service other than its own, Microsoft Azure.
Their own clients say Microsoft is tying customers into it via other extremely popular related products such as Windows Server and Microsoft Office. Therefore, because you probably already are using Microsoft’s software, switching to another cloud provider may not be as seamless as it should be.
The Cost of Staying with Microsoft
Microsoft’s licensing terms mean customers must pay through, as Google refers to it, a ‘cloud tax’, to switch to other cloud services. Businesses and public sector organizations in Europe are losing up to 1 billion euros ($1.1 billion) a year due to such challenging licensing agreements – as identified by Google.
A History of Complaints
Microsoft has been accused of such behavior in cloud space several times in the past. However, the issue was raised earlier this year, by CISPE, a trade group for the cloud computing industry. They were able to get a settlement with Microsoft but Google is not happy with it. As far as Google is concerned, the changes that Microsoft agreed to implement would not suffice, therefore, they had to go ahead with their complaint.
Microsoft on the other hand is cool, saying that such complaints have been addressed within the company before and that Google has no grounds for complaints to the European Commission. They are sure that everything they do is fair and that the cloud market is fine.
The “Microsoft Cloud Tax”
Among the most striking ‘proofs’ in the complaint that Google presented is the ‘Microsoft cloud tax’. In other words, if a company desires to run Microsoft Office tools on the cloud provider different from Azure, say Google Cloud Platform they are required to pay a fairly large amount of licensing fees to Microsoft. Google dismisses this fee as regressive, anti-competitive, and that it shrinks choice, including on cybersecurity.
Further aggravating this, reports from the UK and other European states show that Microsoft dominates a big chunk of cloud spaces. The data provided by Google indicates that between 2021 and 2022 the company owned 60 to 70 per cent of new customers in the United Kingdom.
Google’s Call for Change
Google wants the European Commission to act and order Microsoft to change its behavior. And, the head of Google Cloud’s platform Amit Zavery is extremely confident saying that Microsoft is completely violating antitrust rules of the EU. He said he wants to have a famed and exciting cloud market where customers can select the provider that would be appropriate for him without the penalties.
Microsoft’s Denial
Microsoft affirms that the cloud services market is in a proper working order and that such actions are not damaging.
Whether Google’s complaint transforms the cloud dynamic or will be another lost storm in the cloud market is still to be determined.
Conclusion
From what is discernible, cloud computing is an industry in its growth stage, and as such, very competitive. That is why the stakes are so high Google’s antitrust complaint against Microsoft which is after all another act of the unfolding situation.
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