Google Cloud accuses Microsoft of engaging in anti-competitive cloud practices

Google Cloud has accused Microsoft of engaging in anti-competitive cloud computing practices.
Microsoft Cloud principles in Europe
Google Cloud, the third largest player in the global Cloud market, also criticized Microsoft’s recent deals with European cloud vendors, stating that these deals do not address broader concerns about licensing terms, Reuters news report said.

Amit Zavery, Google Cloud’s Vice President, spoke out publicly about Microsoft and its European deals, urging European Union antitrust regulators to investigate the matter, Reuters news report said. Google trails market leader Amazon and Microsoft in cloud computing market.

In response, Microsoft pointed to a blog post from last year where its president, Brad Smith, emphasized the company’s commitment to the European Cloud Community.

Google Cloud’s Amit Zavery argued that Microsoft’s bundling practices and licensing restrictions make it difficult for customers to choose other cloud providers. The individual deals Microsoft has struck with smaller European cloud vendors only benefit Microsoft. Amit Zavery called on regulators to address the broader problem, rather than just the complaints of individual vendors.

Microsoft president Brad Smith said it has a healthy number two position when it comes to cloud services, with just over 20 percent market share of global cloud services revenues.

The cloud computing sector has recently drawn regulatory scrutiny, including in the United States and in Britain, because of the dominance of a few players and its increasingly critical role as more and more companies shift their services to the cloud.

Microsoft has offered to change its cloud computing practices in a deal with a few smaller rivals which in turn will suspend their antitrust complaints.

“Microsoft definitely has a very anti-competitive posture in cloud. They are leveraging a lot of their dominance in the on-premise business as well as Office 365 and Windows to tie Azure and the rest of cloud services and make it hard for customers to have a choice,” Amit Zavery said in an interview.

“When we talk to a lot of our customers, they find a lot of these bundling practices, as well as the way they create pricing and licensing restrictions, make it difficult for them to choose other providers,” Amit Zavery said.

Amit Zavery said individual deals struck with several smaller European cloud vendors only benefit Microsoft.

“They’re selectively kind of buying out those ones who complain and not make those terms available to everyone. So that definitely makes it an unfair advantage to Microsoft and ties the people who complained back to Microsoft anyway,”

“Whatever they’re offering, there should be terms across for everybody, not just for one or two they’ve chosen and pick, and that shows you that they have so much market power they can kind of go and do those things individually.”

“My point to the regulators would be that they should look at this holistically, even though one or two vendors might settle doesn’t solve the broader problem. And that’s the problem we need to really resolve, not individual vendors’ problems.”

Microsoft still faces another EU antitrust complaint from CISPE, whose members include Amazon. The trade group has rejected the Microsoft’s changes.

Canalys report said the global cloud infrastructure services expenditure grew 23 percent in Q4 2022 to $65.8 billion. In 2022, total cloud infrastructure services spend grew 29 percent to $247.1 billion from $191.7 billion in 2021.

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