In response to rivals' complaints, Microsoft begins relaxing its cloud licensing rules in Europe, which made running its software on other clouds more expensive
ZDNetMary Jo Foley
Context & Ripple Effects
Business customers had already said Microsoft’s terms made Windows and Office harder and more expensive to run on AWS and Google Cloud. The European change responds to the same rival complaints by reducing the licensing penalty tied to those deployments.
The move became a more formal EU licensing amendment later that year, aimed at making rival-cloud use cheaper amid EU antitrust scrutiny. It matters because licensing terms can determine whether customers are free to place Microsoft workloads outside Azure.
First-order effects
European customers using Microsoft software on rival cloud platforms face lower licensing friction, improving the economics of keeping those workloads off Azure.
AWS and Google Cloud gain a more credible route to compete for Microsoft-dependent workloads that had carried an added cost under the prior terms.
Second-order effects
Microsoft must compete more directly on Azure’s service, price, and operational strengths rather than benefiting from a licensing disadvantage imposed on rival platforms.
Rival cloud providers’ complaints gain leverage: the later planned EU amendment shows that the initial relaxation was moving toward a defined licensing change.
Third-order effects
If enforcement pressure continues to reshape licensing, enterprise cloud competition in Europe shifts toward portability of major software workloads rather than lock-in through software-use terms.
The pattern points to hyperscalers negotiating market access through both commercial policy changes and antitrust channels, as reflected in later efforts to resolve cloud providers’ European Commission complaints.
The trend: European cloud competition is increasingly being shaped by licensing portability and antitrust pressure on the terms that govern where enterprise software can run.
Another example of how Microsoft avoids the antitrust crosshairs. While the rest of big tech fights European regulators with Apple going as far as getting weekly fines in Netherland, Microsoft brags about how quickly they comply and how happy they are to do so. Chess vs checkers …
Our commitment is firm. We will work with Europe's cloud providers and regulators to invest in and build a public cloud that will promote competition and meet Europe's economic, security, and cultural needs. https://blogs.microsoft.com/ ...
Our new European Cloud Principles will guide our cloud business across Europe. The licensing changes announced today will enhance transparency for the public and help us to better support Europe's technology needs for cloud providers and customers. https://twitter.com/...
Instead of denying or deflecting a valid criticism, Microsoft is owning it and fixing it. Microsoft's big tech peers on the other hand... https://twitter.com/...
This went exactly how I anticipated it would. They specifically addressed the complaints of European partners to avoid the EC, but did absolutely nothing to undo the changes that affect customers at Amazon, GCP, and Alibaba. https://twitter.com/...
We've listened to feedback from Europe. And today in Brussels, @BradSmi announced we're responding to this feedback, with a new initiative to support European Cloud Providers, alongside a set of 5 European Cloud Principles. Learn more: https://blogs.microsoft.com/ ... https://twi…
Microsoft is undoing in Europe some of the restrictive cloud-licensing policies it first announced in 2019 which made running its software more expensive on its competitors' clouds.: https://www.zdnet.com/...