Raises privacy, but technical dependency on Entra ID remains in place
An alliance of European cloud providers has claimed a victory over Microsoft, but critics say it’s just a “stalling tactic.”
Cloud Infrastructure Services Providers in Europe (CISPE) has had a chequered history with Microsoft. In 2022, the group filed an anti-trust complaint with the European Commission over the hyperscaler’s licensing costs for Windows Server, arguing that it was a “software licence tax.”
But in 2024, CISPE accepted a settlement from Microsoft that included concessions and a cash payment – and the Windows maker actually joined CISPE as a member early this year.
Now the two entities say they have made a further “significant breakthrough” on licensing. The new agreement means CISPE members will be able to offer their customers Microsoft software on a pay-as-you-go (PAYG) basis via Microsoft’s Cloud Solution Program (CSP-H). They will also be able to use Microsoft 365 Local, allowing deployment on local cloud infrastructure.
The trade group also says it has secured a privacy agreement, so members can host Microsoft workloads as PAYG for their customers without sharing their details with Microsoft.
CISPE says these measures will give European cloud providers’ customers better privacy and bring pricing conditions for products like Windows Server and SQL Server closer to those of Microsoft Azure.
There are two areas where CISPE was unable to gain concessions, though. Firstly, Windows 10 and 11 VDI multi-sessions are still not allowed on European-owned multi-tenant infrastructure.
Secondly is ID management. The technical dependency between Entra ID (formerly Azure Active Directory) and Microsoft 365 remains in place, forcing users to use Entra ID for Microsoft software in the cloud.
“If you want to use Microsoft 365 services, for instance, you have to use Entra ID to activate them,” said Mikkel Naesager, CISPE executive advisor on business models.
“There’s no ability to have a competing identity management and swap it out. We have been unable to make any headway there.”
While CISPE is celebrating a win, not everyone feels the same. Mark Boost, CEO of UK cloud provider Civo, said 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. 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.”
Ryan Triplette, executive director of the Coalition for Fair Software Licensing, called the move a “stalling tactic” giving Microsoft “more time to lock in customers with restrictive and anticompetitive licensing practices.”
She added, “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.”