Getting a Fair Deal • The Registry
If you’re a cloud specialist in the EU, things like licensing, the European Gaia-X digital sovereignty project, and creating a level playing field are all on your mind.
On licensing, Microsoft recently had an apparent wake-up call about its practices in Europe and pledged to make concessions – accusations of anti-competitive behavior may focus the mind.
Yet a cloud rival The register spoke, who asked to remain anonymous, complained that Redmond’s proposed changes fail to “move the needle” and ignore “other problematic practices” at the company.
It’s protectionism 101. The United States does it massively. The EU does not do this at all.
European cloud vendors and software vendors have long complained about the dominance of US tech giants, and particular anger is being directed at Microsoft through EU courts. In November last year, Nextcloud (along with other providers) filed a complaint with the EU over the bundling of OneDrive with Windows.
While the core of Nextcloud’s complaint concerns Microsoft 365, Nextcloud CEO Frank Karlitschek said The register the company decided “to focus on one specific thing that’s easy for politicians and lawyers to understand” – which was OneDrive.
The lawsuit will have been a factor in Microsoft’s recent policy changes in the EU, but some of the hyperscalers’ other antics have left EU cloud companies raising more than an eyebrow. The great hope of open standards and interoperability, Europe’s Gaia-X data infrastructure initiative, has also come under scrutiny.
Nextcloud is a founding member, and Karlitschek commented that “it’s not going well”, noting the time the process is taking – time that hyperscalers could use to build an even more dominant position.
Taming Beasts with Gaia-X
“The idea, he told us, was really to build infrastructure and software, like a marketplace and everything to compete with the big cloud providers.”
Karlitschek added: “And, I don’t know, at some point the idea of being created with open source software kind of disappeared. This whole market kind of disappeared. And then I think that it has become like a certification/standards organization.
“Which really isn’t very helpful…”
Michel Paulin, CEO of OVHcloud, was a little more brutal in his assessment during an interview with The register, using the word “sabotage” in reference to the behavior of some Gaia-X players. “In fact,” he said, “they don’t want to do, in practice, the [stated] goal, which is to create an open cloud.”
Regarding Gaia-X, Paulin is keen on openness, “reversibility, interoperability”.
“If someone really wants to achieve these goals, they are welcome. The red line is if they don’t want to achieve them. Then they should be excluded.”
Yann Lechelle, CEO of cloud provider Scaleway, was even more blunt. Scaleway memorably left the Gaia-X project last year and Lechelle said The register that he continues to believe that leaving was the right decision” for two reasons. The first is because… we have better things to do.
“The market is not asking us to be Gaia-X compliant. The market is asking us to keep our velocity in terms of roadmap and our ability to provide a regional alternative to largely American public cloud solutions.
“The second reason,” he added, “is that Gaia-X is confusing to everyone. There was a lot of fantasizing about Gaia-X providing a European cloud, a sovereign cloud. ever get there.
“Cloud providers shouldn’t be inside at all. None of them. American cloud providers, European cloud providers. Gaia-X should be defined and governed by data producers.”
The register contacted UK open-source collaboration organization OpenUK for its opinion on the Gaia-X situation, but we were told the group had nothing to share.
A level playing field or the specter of protectionism
When it comes to the predicament of EU cloud infrastructure and software providers, the solution for Nextcloud is to level the competition. “It looks a bit like protectionism,” admitted Karlitschek, “which is not a good thing. But, on the other hand, a level playing field is absolutely necessary. And in everyone’s interest. “
Lechelle was again a bit more direct. When asked how European cloud providers could compete, he replied, “To me, that’s protectionism 101. The US does it massively. The EU doesn’t do it at all. So, protectionism 101 is for me liberal.It is liberal protectionism, which consists in ensuring a certain quantity of purchases by the public sector, which sets an example, has a minimum threshold oriented towards small local, regional businesses.
“And that doesn’t have to apply to Scaleway in particular. For me, it’s universally necessary.”
Solving the license problem
Microsoft has created five European cloud principles and agreed to modify the licenses. This includes allowing software such as Windows 11 and Microsoft 365 apps to be hosted on a European cloud provider’s infrastructure without financial penalties for the customer; refine Software Assurance agreements to provide more flexibility in deployment options; and the relaxation of legacy merchandise rules in which licenses were tied to physical hardware.
A rival uncharitably described the new set of policies as “frontage”.
CISPE (Cloud Infrastructure Services Providers in Europe) was also unimpressed and said: “We cannot rely on the goodwill or even the charity of a gatekeeper. Microsoft must follow the law, including the competition law.”
“The initiative,” he said of Microsoft’s changes, “fails to meaningfully address the unfair licensing practices at the heart of complaints and concerns from cloud infrastructure service providers. and customers across Europe.It does nothing to end the anti-competitive link of productivity suites with cloud infrastructure services.
“The Commission must continue its investigation in the interest of European cloud customers.”
“It definitely doesn’t go far enough,” Karlitschek said. The register. “Microsoft has agreed to license Office 365 to cloud providers, but offers the same [itself] for a cheaper price,” he continued. “And the general dependency and locking effects are not resolved at all.
“Nextcloud,” he said, “has filed an antitrust complaint with the EU regarding the bundling of different services and software. For example, bundling on OneDrive with Windows 10 and 11.”
“Microsoft has not addressed these concerns at all.”
OVHcloud told The register he regretted that there had to be action from the authorities before Microsoft reacted.
Another cloud provider, who spoke to The register speaking on condition of anonymity, complained that the changes were rooted in broad participation of the existing CSP program and that nothing had been done about bundling and linking Windows and Office and products to foster the adopting Azure. ®