Microsoft has struck a deal with a trade association for cloud providers that would allow its members to offer its software services under a pay-as-you-go model.

Previously, the Cloud Infrastructure Services Providers in Europe (CISPE) and the hyperscaler were at odds due to antitrust allegations, with claims that Microsoft unfairly tied customers to its Azure cloud services.

Since settling that dispute last summer, the pair have come together to allow members access to pay-as-you-go licenses to platforms like Windows Server and SQL Server, as well as host Microsoft workloads for customers on European-centric infrastructure, without having to share customer details with the hyperscaler.

“The agreement we reached with Microsoft marks a significant breakthrough in our long-standing efforts to ensure a level playing field," CISPE Secretary General Francisco Mingorance noted in a statement.

CISPE had complained about Microsoft to the European regulators in November 2022, after it joined an OVHcloud complaint with Aruba against the hyperscaler.

Microsoft sought to appease CISPE in February 2024, opening talks with the trade group to resolve the dispute. Another complaint from the group is being examined by the U.K.'s Competitions and Markets Authority (CMA), with provisional findings siding against the hyperscaler and its rivals.

The subsequent European Union settlement later that year saw the pair agree to create an Azure Stack HCI for European cloud providers to enable CISPE members to run Microsoft software on their platforms at equivalent prices.

That offering is now available, though it’s only available to “qualified” members – current CISPE members, but no hyperscale cloud providers. Microsoft plans to evaluate the program’s effectiveness in its first year for possible expansion.

“For enterprise customers, the new programs directly address previous concerns of CISPE members and empowers European enterprises to choose among a wide range of cloud solutions that meet their sovereignty, compliance, and economic needs,” Mingorance added.

In a statement provided to SDxCentral, Lars Johnson, general manager of business planning at Microsoft, said: “We remain steadfast in our commitment to empower our partners and customers with greater choice and control over their data.

"By working closely with CISPE and our European partner community, we strive to innovate our products, business models, and strengthen our opportunities together.”

The fight goes on

Microsoft rival Google had attempted to disrupt the settlement talks by offering CISPE cash and software licenses, but the trade group ultimately chose the $21.7 million Microsoft settlement.

Microsoft last year accused Google of bankrolling the Open Cloud Coalition (OCC) lobbying group, a claim the group’s senior adviser vehemently denied.

Google did, however, file its own complaint against Microsoft with the European Commission last September, claiming its rival’s licensing terms prevent customers from moving to a competitor.

Critics argue the Microsoft-CISPE agreement doesn't solve the fundamental competition issues that prompted Google's own complaints. Mark Boost, CEO of U.K.-based cloud computing firm Civo, told SDxCentral the agreement raises serious questions about fairness and transparency.

“The concessions apply only to CISPE members, with no clarity on whether other cloud providers across Europe will benefit," Boost said. "Is this a private deal for a select few? Who decides who gets access, Microsoft or regulators? Without these answers, it is easy to arrive at the assumption that this is a workaround that protects market power instead of challenging it.

“From Microsoft to Broadcom, we’re seeing a pattern of behavior where licensing practices consistently undermine competition and restrict market access,” Boost added. "If the EU won’t act decisively, the U.K.’s CMA investigation next month has a vital opportunity to set a new precedent, one where competition isn’t optional and cloud users aren’t trapped by the very infrastructure they depend on.”

The OCC and the European Centre of International Political Economy (ECIPE) earlier this week called for EU lawmakers to address anticompetitive practices in the continental cloud market, including claims that proprietary AI models and chips from hyperscalers “entrench” their market power.

'Smoke and mirrors'

CISPE's Microsoft agreement wasn't welcomed by all of its peers, however, with Ryan Triplette, Executive director of the Coalition for Fair Software Licensing, telling SDxCentral: “Every stalling tactic has just bought Microsoft more time to lock in customers with restrictive and anticompetitive licensing practices.

“This is more smoke and mirrors from Microsoft: offer weak concessions in an attempt to avoid regulatory scrutiny and disingenuously pretend these actions promote European competition. Meanwhile, Microsoft continues to line its pockets at the expense of customer choice around the world.”