A senior Google Cloud executive has harshly criticized Microsoft’s cloud computing practices, arguing that the tech giant is pursuing an industry monopoly that could hurt long-term competition.
Amit Zaveri, vice president of Google Cloud, said: Reuters The company has serious concerns about Microsoft’s current direction in the cloud computing industry and warns that it may seek to establish a stranglehold on areas similar to the one Microsoft holds in the software sector. There is.
“I’m concerned that Microsoft wants to change the way it’s been doing for a decade, where they previously dominated on-premises software, but now they’re trying to push it into the cloud.”
“They’re creating this whole walled garden that’s completely controlled and owned by Microsoft. Customers who want to do something like this only need to go to Microsoft,” he said. Ta.
In the long run, the company’s approach could create monopolies over emerging technologies such as generative AI, resulting in a “walled garden” where customers are locked into platforms such as Azure, Zaveri said. I warned you.
“Next-generation technologies like AI will also have problems and long-term problems if the Microsoft cloud doesn’t remain open, as Microsoft is forcing customers to move to Azure in a variety of ways.” he warned.
Mr Zabrey called on regulators on both sides of the Atlantic to address the issue.
“I think regulators need to provide some guidance,” he said, “and also provide regulations that block the way Microsoft is building its Azure cloud business and prevent the on-premises monopoly from becoming a cloud monopoly. It will need to be done.”
The criticism is the latest in a long-running battle between Microsoft and competitors in the cloud computing industry amid increased regulatory scrutiny of its practices.
British regulators, for example, are investigating whether providers such as Microsoft and Amazon Web Services (AWS) continue to dominate the country’s cloud computing market.
In October 2023, Ofcom called for a formal antitrust inquiry into the competitive landscape of the industry, highlighting that Microsoft and AWS in particular could hinder growth and competition in the sector.
Ofcom has referred the investigation to the Competition and Markets Authority (CMA), which said it had identified “features that make it more difficult for UK businesses to switch between multiple cloud suppliers”.
The main concerns highlighted in the survey centered on ‘egress charges’, where customers have to pay to switch providers completely or adopt a multi-cloud approach using multiple providers.
“Our market research has identified features that will make it more difficult for UK businesses to switch between using multiple cloud suppliers,” Ofcom said at the time.
“We are particularly concerned about the position of market leaders Amazon and Microsoft.”
Tensions between the three hyperscalers escalated late last year after both AWS and Google criticized Microsoft’s licensing practices. The companies argued that Microsoft creates “difficult conditions” for its customers because its licensing practices prevent customers from switching to alternative providers.
Microsoft made changes to its licensing terms in 2019 and 2022 following complaints to EU regulators, aimed at making it easier for small providers to compete in Europe’s cloud computing market.
However, AWS and Google disputed the merits of these changes, arguing that they brought little change and still locked customers into Microsoft products and services.
“To use many of Microsoft’s software products with these other cloud service providers, customers must purchase separate licenses, even if they already own the software,” AWS said at the time. “This often makes it financially impossible for a customer to choose her provider other than Microsoft.”
Microsoft has worked in recent weeks to allay industry concerns and possible antitrust scrutiny. In early February, the tech giant revealed it had begun talks with Europe’s cloud industry trade association CISPE.
In 2022, CISPE filed a complaint with EU regulators for alleged anti-competitive conduct.
CISPE confirmed that discussions with the tech giants are likely to focus on resolving persistent concerns related to “unfair software licensing” practices of infrastructure providers and customers.
We are pleased that MSFT is coming to the negotiating table with CISPE regarding its complaint to the EC regarding anti-competitive licenses in Europe. This is a step in the right direction and we recognize that these limits have no technical basis and can be changed at MSFT’s discretion.February 26, 2024
In a post on X today (February 27), Zaveri said he welcomed the move, calling it a positive step towards improving competition.
“We are pleased that MSFT is coming to the negotiating table with CISPE regarding its complaint to the EC regarding anti-competitive licenses in Europe,” he said. “This is a step in the right direction, recognizing that these restrictions have no technical basis and can be changed at MSFT’s discretion.”
Microsoft is making significant advances in cloud computing and AI
Microsoft’s success in the cloud computing and generative AI market over the past 18 months is no secret.
Since the launch of ChatGPT in November 2022, the tech giant has recorded impressive growth riding a wave of interest in AI technology.
Microsoft has partnered with OpenAI to embed generative AI capabilities and tools across its core products, from Windows, Azure, and even security products.
In January, Microsoft overtook Apple to become the world’s most valuable company, with a market capitalization of $2.887 trillion. Much of that is due to the cloud’s huge success in computing and generative AI.
Microsoft’s financial results for the second quarter of 2024, announced at the end of January, showed that its cloud business as a whole recorded 24% year-on-year growth.
The tech giant’s intelligent cloud division, which includes Azure, posted revenue of $25.8 billion.
In a speech at the time, Microsoft CEO Satya Nadella attributed the growth to increased interest in generative AI, which expanded the company’s customer base.
“Currently, we have 53,000 Azure AI customers, more than a third of whom used Azure for the first time in the past 12 months,” said Nadella. “Our new model of service delivery makes it easy for developers to use their LLMs from partners like Cohere, Meta, and Mistral on Azure without managing the underlying infrastructure.”
