In a significant development for the European cloud computing landscape, the Cloud Infrastructure Services Providers in Europe (CISPE) and Microsoft have announced further amendments to their licensing agreements. This move aims to enhance accessibility to Microsoft's software services for CISPE members, particularly through the introduction of pay-as-you-go models. Notably, the program remains exclusive to European cloud providers, explicitly excluding "hyperscale cloud providers" such as Amazon Web Services (AWS), Google Cloud Platform, and AliCloud. This strategic decision underscores a concerted effort to bolster competition and innovation within the European digital ecosystem by empowering local cloud providers.
Background of the Agreement
The collaboration between CISPE and Microsoft traces back to July 2024, when both parties reached a settlement addressing antitrust concerns raised by CISPE. The trade association had previously accused Microsoft of leveraging its dominant position in the business software market to tether customers to its Azure cloud services, thereby stifling competition. The settlement included Microsoft's commitment to develop an enhanced version of Azure Stack HCI tailored for European cloud providers. This initiative aimed to equip these providers with features comparable to those available to Microsoft's Azure customers, such as multi-session virtual desktop infrastructure based on Windows 11, free Extended Security Updates (ESU), and pay-as-you-go licensing for SQL Server. (cispe.cloud)
Progress and Challenges
Despite the initial agreement, the journey towards implementation has encountered several hurdles. The European Cloud Competition Observatory (ECCO), established to monitor the progress of the agreement, published its second report in May 2025, maintaining an "Amber" rating for Microsoft. This rating indicates that while there have been setbacks, particularly concerning the delivery of the promised product-based resolution, both parties continue to engage in constructive discussions. ECCO's report highlighted that the first phase of the agreement had concluded, and Microsoft was given until July 10, 2025, to propose a commercially equivalent offer. (cispe.cloud)
Further complicating the situation, reports from April 2025 suggested that Microsoft was unlikely to meet the agreed-upon deadline for delivering the customized Azure Stack HCI product. Sources indicated that the technical challenges associated with developing a multi-tenant hybrid cloud solution were more complex than initially anticipated. This development raised concerns among CISPE members about the feasibility of the proposed solutions and the potential need for alternative approaches. (datacenterdynamics.com)
Recent Developments
In response to these challenges, CISPE and Microsoft have agreed to further modifications in their licensing terms. The latest agreement introduces pay-as-you-go models for certain Microsoft services, providing European cloud providers with more flexible and cost-effective options. By excluding hyperscale cloud providers from this program, the initiative aims to level the playing field, allowing smaller European cloud providers to compete more effectively. This approach aligns with CISPE's mission to foster a competitive and innovative digital ecosystem in Europe.
Implications for the European Cloud Market
The exclusion of hyperscale cloud providers from the new licensing terms is a strategic move designed to empower local European cloud providers. By offering more favorable licensing conditions exclusively to these providers, the agreement seeks to mitigate the competitive advantages held by larger, global cloud companies. This could lead to increased diversity in the cloud services market, offering customers a broader range of options and fostering innovation within the region.
However, this approach has not been without criticism. Representatives from excluded hyperscale providers have expressed concerns that such agreements may not fully address the broader issues of fair competition and could potentially lead to market fragmentation. They argue that comprehensive solutions should encompass all market participants to ensure a truly competitive environment.
Looking Ahead
As the July 10, 2025, deadline approaches, all eyes are on Microsoft to deliver on its commitments. The success of this agreement will largely depend on the timely and effective implementation of the proposed licensing changes and product developments. For European cloud providers, this represents a critical opportunity to enhance their service offerings and strengthen their position in the market.
In conclusion, the evolving partnership between CISPE and Microsoft marks a significant step towards addressing longstanding concerns about software licensing practices and competition in the European cloud computing sector. While challenges remain, the continued dialogue and adjustments to the agreement reflect a shared commitment to fostering a more equitable and innovative digital landscape in Europe.
Source: MLex CISPE, Microsoft agree further licensing terms for cloud computing | MLex | Specialist news and analysis on legal risk and regulation
