Google exec: Microsoft Teams concession 'too little, too late'
(2023/09/15)
- Reference: 1694793847
- News link: https://www.theregister.co.uk/2023/09/15/google_exec_microsoft_teams_concession/
- Source link:
Google is urging regulators on both sides of the pond to tackle Microsoft's alleged software licensing abuses in the cloud before it is too late, claiming it may already be too late in the collaboration services market, which is also attracting interest from antitrust authorities.
Back in [1]2019 , Microsoft introduced some drastic changes to its bring your own license (BYOL) policies that either prevented customers from running its software in a rival's cloud infrastructure or made it prohibitively expensive to do so. Numerous complaints were subsequently filed with the European Commission over the impact to competition.
Amit Zavery, vice president, general manager and head of platform at Google Cloud, who talked to us about this in June when he described Microsoft's actions as a [2]"software tax" customers are forced to pay, says things haven't changed.
[3]
"I was meeting many customers this week," he told The Register , "quite a few CIOs and others, and they're still facing the same issues in terms of exclusionary licensing practices from Microsoft. They can't move their existing licenses, and they're having to pay a penalty or a tax to Microsoft."
[4]
[5]
"Microsoft has so much market power that they can decide… how the market will evolve based on their rules," Zavery added. "I think this is a global issue. This is an issue of Microsoft restricting and picking companies who they will not let the customers choose as an option for running the cloud services."
In its marketing material, the Windows maker bills Azure as being five times cheaper to run its own Microsoft software on, but in some other areas, such as Windows Server, customers simply aren't allowed to run the software on so-called [6]"listed" providers - which Redmond classifies as AWS, Google and Alibaba.
[7]
A joint complaint about the license cost policy was filed with the EU's antitrust police by OVHcloud, DCC and Aruba SpA in 2021. Microsoft [8]settled the case with the trio in March before it had the chance to go to court. AWS-backed trade group CISPE also took its fight to Europe in November last year, and [9]refused a settlement offer from Microsoft in June .
According to CISPE-commissioned [10]research by Frederic Jenny, emeritus professor of Economics at ESSEC Paris Business, additional charges on customers choosing to run Microsoft SQL Server in a third party cloud equates to a 28 percent surcharge.
He said the BYOL licensing change in 2019 "may have resulted in first-year license repurchase costs equivalent to €560 million ($597 million) for the European market. An additional overcharge of €1 billion ($1.07 billion), relating to licensing surcharges imposed on non-Azure deployments of SQL Server, may further be attributed to the policy change."
[11]
That's no small change.
Microsoft also tried to make peace in other scenarios where it is attracting the attention of regulators: it threw the Competition and Markets Authority a bone to approve its proposed $69 billion purchase of Activision Blizzard by agreeing to sell [12]cloud streaming rights to Ubisoft – it can still pay Ubisoft for a commercial license to get into cloud gaming. And last month it offered to [13]unbundle Teams from Office/ Microsoft 365 after a complaint to the EU from Slack.
Yesterday [14]Bloomberg reported this offer was not considered sufficient by the European Commission and a deeper probe of the market, one which investigates Microsoft's policies, is understood to be imminent, with a statement of objections document expected to be sent to Microsoft in the next few weeks.
Google's Zavery told us he thinks the concession being offered on Teams and the 365 suites are perhaps unworkable as this applies only in the European Union.
"I don't even know how Microsoft can justify this," he said. "The funny part to me, as a vendor, is to be able to say [to a customer with a] straight face, 'You know what, we'll do this for this particular country or region, and it's the same issue for the rest of the world, but we will not do it for the rest of the world'… What's the reason for that?"
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He suggested it is because Microsoft is willing to address concerns after its policies have proven beneficial to market share. The concession was "too little, too late," as Microsoft already has 300 million Teams customers compared to Slack's 27 million. Microsoft has amassed the installed base of customers already.
"I think that concession of unbundling Teams for European-only customers is a very small change, and I don't think [it will] make any difference in that market anymore," said Zavery.
[15]Microsoft still prohibits Google or Alibaba from running O365 Windows Apps
[16]Microsoft places huge cap-ex bets on datacenters for cloud and AI
[17]Google formally accuses monopolist Microsoft of trapping people in its cloud
[18]It's official: EU probing bundling of Teams with Microsoft 365
[19]Euro clouds lodge another complaint against Microsoft over anti-competitive licenses
The EU previously issued a request for information (RFI) from Microsoft cloud rivals and interested third parties about the way Microsoft software is handled in the cloud, and Google was among the businesses to respond to a [20]similar call from the FTC .
"FTC basically had an RFI, so we we did provide responses to it directly, and made sure that there is a clarity in terms of what we see in this market. So they are looking at all this information from various vendors, and customers as well, to see what the impact of Microsoft licensing and these restrictions are.
"I think people are realizing this is not right and this is very anticompetitive in nature," he added, as with the Slack complaints "people are realizing that if you don't do it early enough" then Microsoft will limit competition.
Cloud is a bigger market than collaboration software, and one where generative AI will run, and Zavery said the industry should be worried about Microsoft's restrictions as this "will impact future innovation."
We have asked Microsoft to comment. ®
Get our [21]Tech Resources
[1] https://www.microsoft.com/en-us/licensing/news/updated-licensing-rights-for-dedicated-cloud
[2] https://www.theregister.com/2023/06/01/google_microsoft_cloud_complaints/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_specialfeatures/cloudinfrastructureweek&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZQTUAxJCarbLiPg-ukuChgAAAgc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_specialfeatures/cloudinfrastructureweek&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZQTUAxJCarbLiPg-ukuChgAAAgc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_specialfeatures/cloudinfrastructureweek&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZQTUAxJCarbLiPg-ukuChgAAAgc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.microsoft.com/en-us/licensing/news/updated-licensing-rights-for-dedicated-cloud
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_specialfeatures/cloudinfrastructureweek&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZQTUAxJCarbLiPg-ukuChgAAAgc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2023/03/30/microsoft_euro_complaints/
[9] https://www.theregister.com/2023/05/30/microsoft_cispe_settlement_rejected/
[10] https://cispe.cloud/the-billion-euro-unfair-software-licence-tax-on-eu-customers/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_specialfeatures/cloudinfrastructureweek&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZQTUAxJCarbLiPg-ukuChgAAAgc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[12] https://www.theregister.com/2023/08/22/microsoft_activision_ubisoft_cma/
[13] https://www.theregister.com/2023/08/31/microsoft_to_unbundle_teams/
[14] https://www.bloomberg.com/news/articles/2023-09-14/microsoft-facing-formal-eu-complaint-over-teams-video-app
[15] https://www.theregister.com/2023/08/25/microsoft_google_alibaba_windows_apps/
[16] https://www.theregister.com/2023/07/28/microsoft_places_huge_capex_bets/
[17] https://www.theregister.com/2023/06/21/google_ftc_microsoft_anticompetitive_cloud/
[18] https://www.theregister.com/2023/07/27/its_official_ec_to_stick/
[19] https://www.theregister.com/2022/11/09/cispe_ec_microsoft_complaint/
[20] https://www.theregister.com/2023/06/21/google_ftc_microsoft_anticompetitive_cloud/
[21] https://whitepapers.theregister.com/
Back in [1]2019 , Microsoft introduced some drastic changes to its bring your own license (BYOL) policies that either prevented customers from running its software in a rival's cloud infrastructure or made it prohibitively expensive to do so. Numerous complaints were subsequently filed with the European Commission over the impact to competition.
Amit Zavery, vice president, general manager and head of platform at Google Cloud, who talked to us about this in June when he described Microsoft's actions as a [2]"software tax" customers are forced to pay, says things haven't changed.
[3]
"I was meeting many customers this week," he told The Register , "quite a few CIOs and others, and they're still facing the same issues in terms of exclusionary licensing practices from Microsoft. They can't move their existing licenses, and they're having to pay a penalty or a tax to Microsoft."
[4]
[5]
"Microsoft has so much market power that they can decide… how the market will evolve based on their rules," Zavery added. "I think this is a global issue. This is an issue of Microsoft restricting and picking companies who they will not let the customers choose as an option for running the cloud services."
In its marketing material, the Windows maker bills Azure as being five times cheaper to run its own Microsoft software on, but in some other areas, such as Windows Server, customers simply aren't allowed to run the software on so-called [6]"listed" providers - which Redmond classifies as AWS, Google and Alibaba.
[7]
A joint complaint about the license cost policy was filed with the EU's antitrust police by OVHcloud, DCC and Aruba SpA in 2021. Microsoft [8]settled the case with the trio in March before it had the chance to go to court. AWS-backed trade group CISPE also took its fight to Europe in November last year, and [9]refused a settlement offer from Microsoft in June .
According to CISPE-commissioned [10]research by Frederic Jenny, emeritus professor of Economics at ESSEC Paris Business, additional charges on customers choosing to run Microsoft SQL Server in a third party cloud equates to a 28 percent surcharge.
He said the BYOL licensing change in 2019 "may have resulted in first-year license repurchase costs equivalent to €560 million ($597 million) for the European market. An additional overcharge of €1 billion ($1.07 billion), relating to licensing surcharges imposed on non-Azure deployments of SQL Server, may further be attributed to the policy change."
[11]
That's no small change.
Microsoft also tried to make peace in other scenarios where it is attracting the attention of regulators: it threw the Competition and Markets Authority a bone to approve its proposed $69 billion purchase of Activision Blizzard by agreeing to sell [12]cloud streaming rights to Ubisoft – it can still pay Ubisoft for a commercial license to get into cloud gaming. And last month it offered to [13]unbundle Teams from Office/ Microsoft 365 after a complaint to the EU from Slack.
Yesterday [14]Bloomberg reported this offer was not considered sufficient by the European Commission and a deeper probe of the market, one which investigates Microsoft's policies, is understood to be imminent, with a statement of objections document expected to be sent to Microsoft in the next few weeks.
Google's Zavery told us he thinks the concession being offered on Teams and the 365 suites are perhaps unworkable as this applies only in the European Union.
"I don't even know how Microsoft can justify this," he said. "The funny part to me, as a vendor, is to be able to say [to a customer with a] straight face, 'You know what, we'll do this for this particular country or region, and it's the same issue for the rest of the world, but we will not do it for the rest of the world'… What's the reason for that?"
Installed base achievement unlocked
He suggested it is because Microsoft is willing to address concerns after its policies have proven beneficial to market share. The concession was "too little, too late," as Microsoft already has 300 million Teams customers compared to Slack's 27 million. Microsoft has amassed the installed base of customers already.
"I think that concession of unbundling Teams for European-only customers is a very small change, and I don't think [it will] make any difference in that market anymore," said Zavery.
[15]Microsoft still prohibits Google or Alibaba from running O365 Windows Apps
[16]Microsoft places huge cap-ex bets on datacenters for cloud and AI
[17]Google formally accuses monopolist Microsoft of trapping people in its cloud
[18]It's official: EU probing bundling of Teams with Microsoft 365
[19]Euro clouds lodge another complaint against Microsoft over anti-competitive licenses
The EU previously issued a request for information (RFI) from Microsoft cloud rivals and interested third parties about the way Microsoft software is handled in the cloud, and Google was among the businesses to respond to a [20]similar call from the FTC .
"FTC basically had an RFI, so we we did provide responses to it directly, and made sure that there is a clarity in terms of what we see in this market. So they are looking at all this information from various vendors, and customers as well, to see what the impact of Microsoft licensing and these restrictions are.
"I think people are realizing this is not right and this is very anticompetitive in nature," he added, as with the Slack complaints "people are realizing that if you don't do it early enough" then Microsoft will limit competition.
Cloud is a bigger market than collaboration software, and one where generative AI will run, and Zavery said the industry should be worried about Microsoft's restrictions as this "will impact future innovation."
We have asked Microsoft to comment. ®
Get our [21]Tech Resources
[1] https://www.microsoft.com/en-us/licensing/news/updated-licensing-rights-for-dedicated-cloud
[2] https://www.theregister.com/2023/06/01/google_microsoft_cloud_complaints/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_specialfeatures/cloudinfrastructureweek&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZQTUAxJCarbLiPg-ukuChgAAAgc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_specialfeatures/cloudinfrastructureweek&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZQTUAxJCarbLiPg-ukuChgAAAgc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_specialfeatures/cloudinfrastructureweek&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZQTUAxJCarbLiPg-ukuChgAAAgc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.microsoft.com/en-us/licensing/news/updated-licensing-rights-for-dedicated-cloud
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_specialfeatures/cloudinfrastructureweek&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZQTUAxJCarbLiPg-ukuChgAAAgc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2023/03/30/microsoft_euro_complaints/
[9] https://www.theregister.com/2023/05/30/microsoft_cispe_settlement_rejected/
[10] https://cispe.cloud/the-billion-euro-unfair-software-licence-tax-on-eu-customers/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_specialfeatures/cloudinfrastructureweek&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZQTUAxJCarbLiPg-ukuChgAAAgc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[12] https://www.theregister.com/2023/08/22/microsoft_activision_ubisoft_cma/
[13] https://www.theregister.com/2023/08/31/microsoft_to_unbundle_teams/
[14] https://www.bloomberg.com/news/articles/2023-09-14/microsoft-facing-formal-eu-complaint-over-teams-video-app
[15] https://www.theregister.com/2023/08/25/microsoft_google_alibaba_windows_apps/
[16] https://www.theregister.com/2023/07/28/microsoft_places_huge_capex_bets/
[17] https://www.theregister.com/2023/06/21/google_ftc_microsoft_anticompetitive_cloud/
[18] https://www.theregister.com/2023/07/27/its_official_ec_to_stick/
[19] https://www.theregister.com/2022/11/09/cispe_ec_microsoft_complaint/
[20] https://www.theregister.com/2023/06/21/google_ftc_microsoft_anticompetitive_cloud/
[21] https://whitepapers.theregister.com/
Re: Hmmmm
Throatwarbler Mangrove
Except, notably, it's not really Microsoft's customers complaining but Microsoft's competition . . . who are also known for abusing their monopoly power in their own domains. It's a bit rich for Google and Amazon to complain about Microsoft using its market dominance to lock in customers when both other companies are demonstrably guilty of the same thing. All of them want the same lock-in, and all of them are happy to shaft their customers when it suits them. God help us all if any of them achieves full dominance over the others.
Windows Server?
Happy_Jack
"but in some other areas, such as Windows Server, customers simply aren't allowed to run the software on so-called "listed" providers - which Redmond classifies as AWS, Google and Alibaba".
I think anybody choosing Windows Server or SQL Server in 2023 deserves all they get.
Re: Windows Server?
Throatwarbler Mangrove
"I think anybody choosing Windows Server or SQL Server in 2023 deserves all they get."
Flexible, powerful, stable software which comes without the side order of unbearable smugness and elitism that accompanies Linux and Open Source?
Re: Windows Server?
Gene Cash
> I think anybody choosing Windows Server or SQL Server in 2023 deserves all they get.
Would you prefer to jump from the Microsoft frying pan into the Oracle fire?
Pot meet kettle.
nematoad
"Microsoft has so much market power that they can decide… how the market will evolve based on their rules,"
Well they would know, wouldn't they?
How anyone can come out with this bullshit with a straight face beats me.
Maybe that's why members of the C suite are so richly rewarded.
Soon it will be Microsoft's turn to moan about the stranglehold Google has on the online ad business and search and how that is unfair to a struggling browser owner like themselves.
Hypocritical, entitled and just downright loathsome the lot of 'em.
Sorry
Pascal Monett
I'm terribly sorry, but I just can't bring myself to sympathise with anything a Google mouthpiece complains about.
You are hoovering up every bit of data you can (with and without permission), storing it forever in bit barns the size of Texas, and using and abusing that data to sling stupid ads for which you get paid all the money.
You have no right to complain about anything .
Hmmmm
A lot of Microsoft customers woes have been bought on themselves by choosing Microsoft. There were - and still are - other choices.
I can't help but feel sometimes it's like a Tesla owner complaining they can't fill their car at a gas station ... well you did buy a fucking Tesla. Which everyone knows as you won't shut up about it.