European cloud providers have long operated under the looming shadow of American tech giants, their ambitions often hamstrung by restrictive licensing, technical tying, and complex negotiations. In one of the most significant developments for the continent’s digital sovereignty in recent years, the Cloud Infrastructure Providers in Europe (CISPE) has announced a landmark deal with Microsoft, claiming to have won “major licensing reforms” following a protracted, high-profile dispute. While the arrangement marks what many in the industry are hailing as progress, it also underscores the unfinished business stemming from other powerful players—namely, Broadcom and its controversial overhaul of VMware licensing. This deep-dive unpacks the drama, examines what’s actually changed for European cloud providers, and analyzes the lingering risks and realities of hyperscale consolidation across the sector.
The digital economy across Europe has expanded exponentially, with enterprises and governments pushing for homegrown cloud capacity to reduce dependency on global behemoths. Yet, licensing arrangements—especially those imposed by US titans—have been a notable sticking point. In 2022, these tensions boiled over when CISPE lodged a formal complaint with the European Commission, targeting Microsoft’s licensing practices as anti-competitive and detrimental to fair market play.
The heart of the complaint focused on Microsoft’s so-called “tying,” whereby certain features and favorable terms remained locked to Microsoft’s own Azure cloud while becoming prohibitively expensive—or technically convoluted—for independent providers. Such tactics, CISPE alleged, undermined innovation, restricted competition, and ultimately resulted in European enterprises and public-sector bodies shouldering higher costs for fewer choices. This claim was repeatedly echoed by smaller providers across the bloc, who found themselves effectively squeezed out of offering Microsoft workloads on terms that compared to Azure.
In a press statement, Lars Johnson, Microsoft’s General Manager of Business Planning, emphasized the company’s willingness to “innovate our products, business models, and strengthen our opportunities together” through close collaboration with CISPE and its partners. On paper, these steps indicated a thaw in frosty relations and a good-faith effort to recalibrate Microsoft’s licensing for the European cloud ecosystem.
However, the path from agreement to actual reform proved rocky, culminating in CISPE publicly accusing Microsoft in February of pushing a rebranded existing product rather than delivering meaningful access and terms for its members. Microsoft, for its part, fired back, claiming CISPE misunderstood the MoU and accusing the organization of demanding “out of scope” changes. This stalemate cast doubt on whether the high-profile deal would amount to anything more than a PR exercise.
Such skepticism is not entirely unfounded. Historical precedent shows large enterprise software vendors often debut limited reforms only for specific partners or geographies to placate regulators. The risk, especially for independent or smaller providers outside these arrangements, is that they remain disadvantaged—either forced into unfavorable terms or priced out of key customer opportunities.
This concern has prompted calls for regulatory authorities to maintain close oversight and intervene proactively whenever vendor behavior threatens the integrity of open cloud markets. With the UK’s Competition and Markets Authority (CMA) preparing to examine these licensing practices in detail next month, CISPE’s partial victory may be just the opening salvo in a much broader struggle over the future rules of digital infrastructure competition in Europe.
This dynamic could inadvertently entrench the largest, best-resourced European players while leaving startups and smaller regional clouds outside the licensing perimeter. In a sector already criticized for its consolidation and high barriers to entry, such a scenario runs counter to the very EU objectives of greater competition, local innovation, and digital sovereignty.
In recent months, Broadcom has drawn sharp criticism for introducing tougher licensing terms, narrowing the range of service providers eligible for access, and reportedly hiking fees for certain workloads. The result, industry insiders warn, is disruption at nearly every tier of the value chain—from hosting companies to enterprise IT departments and even public projects.
Ben Maynard, CISPE’s director of communications, confirmed the consortium is exploring whether to initiate a formal complaint with the European Commission over Broadcom’s actions. The stakes are high: VMware is ubiquitous in European hybrid and private cloud deployments, and any limitation in terms of licensing, interoperability, or pricing could have far-reaching impacts on digital competitiveness and sovereignty.
For Europe in particular, where fears of digital colonialism are never far from policymakers’ minds, the stakes go beyond economics. They touch on cybersecurity, privacy, and even national autonomy over critical digital infrastructure. Hence, each licensing tweak or regulatory engagement is closely watched as a test of Europe’s broader strategy for digital resilience.
Still, with key issues unresolved and critics warning of continuing market manipulation, this is clearly not the end of the story. Instead, it serves as a crucial reminder that ongoing regulatory attention, sector-wide transparency, and collaborative advocacy are the only safeguards against the subtle but powerful levers of vendor influence. As disputes with Broadcom heat up and scrutiny intensifies, the fate of Europe’s cloudy ambitions will depend less on one-off deals and more on the collective resilience of its providers, regulators, and customers to demand—and enforce—truly level digital playing fields.
For now, the European cloud landscape stands at an inflection point. Whether these recent reforms become a harbinger of lasting change or are remembered as tactical concessions on the path to deeper consolidation will ultimately be judged in the months and years to come.
Source: The Stack Euro cloud group claims 'wins' in Microsoft battle – turns attention to Broadcom
The digital economy across Europe has expanded exponentially, with enterprises and governments pushing for homegrown cloud capacity to reduce dependency on global behemoths. Yet, licensing arrangements—especially those imposed by US titans—have been a notable sticking point. In 2022, these tensions boiled over when CISPE lodged a formal complaint with the European Commission, targeting Microsoft’s licensing practices as anti-competitive and detrimental to fair market play.The heart of the complaint focused on Microsoft’s so-called “tying,” whereby certain features and favorable terms remained locked to Microsoft’s own Azure cloud while becoming prohibitively expensive—or technically convoluted—for independent providers. Such tactics, CISPE alleged, undermined innovation, restricted competition, and ultimately resulted in European enterprises and public-sector bodies shouldering higher costs for fewer choices. This claim was repeatedly echoed by smaller providers across the bloc, who found themselves effectively squeezed out of offering Microsoft workloads on terms that compared to Azure.
The Memorandum of Understanding: Promise and Peril
After months of regulatory back-and-forth, CISPE and Microsoft announced a Memorandum of Understanding (MoU) designed to address core concerns. Microsoft agreed to release an “enhanced version of Azure Stack HCI” expressly for European cloud providers. Another major initiative was the establishment of the European Cloud Observatory, an independent body tasked with monitoring progress and holding both parties accountable to their commitments.In a press statement, Lars Johnson, Microsoft’s General Manager of Business Planning, emphasized the company’s willingness to “innovate our products, business models, and strengthen our opportunities together” through close collaboration with CISPE and its partners. On paper, these steps indicated a thaw in frosty relations and a good-faith effort to recalibrate Microsoft’s licensing for the European cloud ecosystem.
However, the path from agreement to actual reform proved rocky, culminating in CISPE publicly accusing Microsoft in February of pushing a rebranded existing product rather than delivering meaningful access and terms for its members. Microsoft, for its part, fired back, claiming CISPE misunderstood the MoU and accusing the organization of demanding “out of scope” changes. This stalemate cast doubt on whether the high-profile deal would amount to anything more than a PR exercise.
CISPE’s Licensing Wins: What Changed and Who Benefits?
The latest round of announcements signals that both sides have returned to the negotiating table and reached a more concrete accord. Central to the newly clarified arrangement are two pivotal reforms:- Pay-As-You-Go Licensing for Windows Server and SQL Server: CISPE members gain the ability to offer Microsoft workloads, such as Windows Server and SQL Server, on a Pay-As-You-Go (PAYG) basis. Pricing is now explicitly described as “comparable to Azure”, establishing a more level playing field and giving European providers the chance to compete directly—at least within the CISPE cohort.
- Bring Your Own License (BYOL) with Data Sovereignty: European providers can now support BYOL workloads for Microsoft software, crucially without sharing sensitive customer information directly with Microsoft. This addresses one of the chief data sovereignty fears by allowing users to retain greater control over how, where, and by whom their data is processed.
Limits, Omissions, and Why Critics Remain Skeptical
While CISPE has coined the outcome as a “landmark” achievement, the organization admitted it did not win every demand at the table. Notably:- No Windows 10/11 VDI Multi-Session for Multi-Tenant European Clouds: Microsoft will not provide the multi-user virtual desktop infrastructure (VDI) capability on European-owned multi-tenant platforms. This omission remains a sore point for many smaller and medium-sized providers who sought parity with Azure’s own VDI services.
- Persistent Technical Tying: Microsoft refuses to decouple Entra ID (formerly Azure Active Directory) from Microsoft 365 offerings, meaning customers remain locked into Microsoft’s identity solutions if they wish to take full advantage of the 365 ecosystem. This technical tying is a linchpin for Microsoft’s ecosystem control, and one that several industry critics argue stifles both innovation and genuine customer choice.
- Reform Clarity and Exclusivity: One of the most persistent criticisms—voiced publicly by Mark Boost, CEO of UK-based CIVO—is the apparent exclusivity of the reforms. As it stands, the licensing improvements appear ringfenced to CISPE members, with “no clarity on whether other cloud providers across Europe will benefit.” If true, this creates a tiered market where membership unlocks advantages, undercutting pan-European fairness.
Regulatory Reluctance and North American Counterpoints
Not everyone is cheering from the sidelines. The North America-based Coalition for Fair Software Licensing has blasted the CISPE-Microsoft arrangement as “smoke and mirrors,” contending that Microsoft only made concessions as a stalling tactic to “lock in customers” and avoid deeper regulatory scrutiny. These critics point to a broader pattern: licensing changes presented as pro-competitive reforms, but engineered in ways that preserve walled gardens and delay meaningful structural change in software markets.Such skepticism is not entirely unfounded. Historical precedent shows large enterprise software vendors often debut limited reforms only for specific partners or geographies to placate regulators. The risk, especially for independent or smaller providers outside these arrangements, is that they remain disadvantaged—either forced into unfavorable terms or priced out of key customer opportunities.
This concern has prompted calls for regulatory authorities to maintain close oversight and intervene proactively whenever vendor behavior threatens the integrity of open cloud markets. With the UK’s Competition and Markets Authority (CMA) preparing to examine these licensing practices in detail next month, CISPE’s partial victory may be just the opening salvo in a much broader struggle over the future rules of digital infrastructure competition in Europe.
Unintended Consequences: Fragmentation of the European Cloud Scene?
While the reforms represent measurable progress for CISPE members, the question of inclusivity looms large. Clarity is needed on whether these new terms will be accessible—either immediately or via subsequent policy action—to the wider European cloud market or remain an exclusive CISPE benefit. If the latter, the risk is of a two-speed cloud environment, where smaller non-aligned providers face continued obstacles to compete.This dynamic could inadvertently entrench the largest, best-resourced European players while leaving startups and smaller regional clouds outside the licensing perimeter. In a sector already criticized for its consolidation and high barriers to entry, such a scenario runs counter to the very EU objectives of greater competition, local innovation, and digital sovereignty.
Enter Broadcom: Industry Shockwaves from VMware Licensing Changes
With the Microsoft battle provisionally settled, CISPE and its members now find their attention shifting toward another cloud flashpoint: Broadcom’s overhaul of VMware licensing following its $61 billion acquisition in late 2023. The ramifications of this takeover have rippled through the infrastructure market, unsettling providers and customers who rely on VMware as a foundational virtualization and cloud platform.In recent months, Broadcom has drawn sharp criticism for introducing tougher licensing terms, narrowing the range of service providers eligible for access, and reportedly hiking fees for certain workloads. The result, industry insiders warn, is disruption at nearly every tier of the value chain—from hosting companies to enterprise IT departments and even public projects.
Ben Maynard, CISPE’s director of communications, confirmed the consortium is exploring whether to initiate a formal complaint with the European Commission over Broadcom’s actions. The stakes are high: VMware is ubiquitous in European hybrid and private cloud deployments, and any limitation in terms of licensing, interoperability, or pricing could have far-reaching impacts on digital competitiveness and sovereignty.
The Broader Pattern: Oligopoly Risk in Global Cloud Infrastructure
The controversies surrounding both Microsoft and Broadcom reflect a wider pattern of concentrated market power in the hands of a few technology giants. Whether through exclusive contracts, “bundling” practices, or technical pre-integration, major vendors can shape market access and customer choice—often at the expense of independent providers and end-user flexibility.For Europe in particular, where fears of digital colonialism are never far from policymakers’ minds, the stakes go beyond economics. They touch on cybersecurity, privacy, and even national autonomy over critical digital infrastructure. Hence, each licensing tweak or regulatory engagement is closely watched as a test of Europe’s broader strategy for digital resilience.
Critical Strengths and Industry Progress
Despite these headwinds, CISPE’s latest agreement does offer several notable advances:- Real Competitive Parity for CISPE Members: The ability for member clouds to offer Microsoft software under comparable terms to Azure materially improves their competitive prospects, especially for customers weighing alternatives to an all-in Microsoft stack.
- Enhanced Data Sovereignty: BYOL without mandatory customer information sharing with Microsoft represents a breakthrough for GDPR-conscious enterprises and public-sector bodies anxious to retain control of sensitive workloads.
- Precedent for Future Negotiation: The saga sets an important benchmark for how determined collective action by regional players can move the needle on global vendor terms, even if incrementally.
Persistent Risks and Unresolved Challenges
Yet the risks, limitations, and open questions should not be glossed over:- Partial and Exclusive Nature of Reforms: If the licensing changes are limited to CISPE, market fragmentation and exclusivity may worsen rather than ameliorate open competition.
- Regulatory Follow-Through Essential: Without ongoing vigilance and intervention from both European and national regulators, reforms may stall or fail to trickle down to where they’re most needed.
- Broadcom’s Question Mark: As focus shifts to Broadcom’s VMware maneuvering, the playbook for vendor accountability and customer protection remains underdeveloped, heightening uncertainty for enterprises that depend on legacy virtualization stacks.
Next Steps: What Should European Cloud Customers and Providers Watch For?
Industry observers and stakeholders can expect several key developments in the coming months:- Implementation Details: Close monitoring of how Microsoft’s new PAYG and BYOL terms manifest in practice will be essential for verifying the true impact of the reforms, both for CISPE members and—potentially—other independent clouds.
- Regulatory Outcomes: The UK CMA’s upcoming investigation into cloud market practices could establish significant new precedents, especially if it results in further unbundling or pro-competitive remedies with broader applicability than the private CISPE-Microsoft settlement.
- Broadcom’s Response: Whether CISPE proceeds with an official complaint and how European regulators respond to Broadcom’s VMware changes will set the tone for the next chapter in European cloud vendor relations.
- Customer Communication: European cloud buyers should actively engage with providers and vendors to clarify their actual licensing terms, rights, and obligations under the new arrangements, ensuring that promised reforms translate into real-world flexibility and savings.
Conclusion: A Turning Point, or Just Another Maneuver?
The deal between CISPE and Microsoft represents a significant—if incomplete—victory in the larger battle for fairer, more open cloud infrastructure markets in Europe. By prying open access to PAYG and BYOL on competitive terms, CISPE has made real progress in breaking down some of the most persistent barriers to local cloud growth and autonomy.Still, with key issues unresolved and critics warning of continuing market manipulation, this is clearly not the end of the story. Instead, it serves as a crucial reminder that ongoing regulatory attention, sector-wide transparency, and collaborative advocacy are the only safeguards against the subtle but powerful levers of vendor influence. As disputes with Broadcom heat up and scrutiny intensifies, the fate of Europe’s cloudy ambitions will depend less on one-off deals and more on the collective resilience of its providers, regulators, and customers to demand—and enforce—truly level digital playing fields.
For now, the European cloud landscape stands at an inflection point. Whether these recent reforms become a harbinger of lasting change or are remembered as tactical concessions on the path to deeper consolidation will ultimately be judged in the months and years to come.
Source: The Stack Euro cloud group claims 'wins' in Microsoft battle – turns attention to Broadcom