Microsoft Yields to CISPE Concerns, Paving Way for EU Cloud Competition

Microsoft’s Azure Local Faces Setback Amidst EU Antitrust Scrutiny

A proposed solution to appease European regulators is reportedly falling short of expectations.

Microsoft’s efforts to resolve a European Union antitrust probe into its cloud licensing practices have hit a snag. A key component of the agreement,dubbed Azure Local,is reportedly not delivering the full suite of features initially promised.

This development comes after Microsoft agreed in March 2023 to alter its cloud licensing practices. The settlement,reached in July 2024 with CISPE,included a €20 million ($21.7 million) payment and the commitment to develop Azure Local.

Azure Local was intended to allow cloud providers to run Microsoft software on their platforms at comparable prices to Microsoft’s own offerings. It was designed to feature multitenancy support, pay-as-you-go licensing for SQL server, and enhanced VDI capabilities.

However, the European Cloud Collaboration Observatory (ECCO), tasked with overseeing the deal, recently found that both Microsoft and CISPE have acknowledged Azure Local will not meet all the stipulated features. ECCO has described Microsoft’s progress as “disappointing,” assigning the company an “Amber” rating-an indication that concerns remain and corrective actions are needed.

Frequently Asked Questions

What was the purpose of Azure local?

Azure Local was designed to allow cloud providers to use Microsoft software on their platforms at prices similar to Microsoft’s own rates as part of an EU antitrust settlement.

What features were initially promised for Azure Local?

The initial agreement included multitenancy support, pay-as-you-go SQL Server licensing, unlimited virtualization, and multi-session VDI for Windows.

What is CISPE?

CISPE stands for the Cloud Infrastructure Services Providers in Europe, an organization representing cloud providers impacted by Microsoft’s licensing practices.

Why is the European Cloud Collaboration Observatory (ECCO) involved?

ECCO provides independent oversight of the settlement agreement between Microsoft and CISPE to ensure compliance.

What does an “Amber” rating from ECCO signify?

An “Amber” rating indicates that concerns exist regarding the implementation of the agreement, and corrective actions have been proposed by the overseer.

Has Microsoft failed to meet the EU antitrust settlement terms?

Reports suggest that Azure Local is not delivering the full set of features initially agreed upon,leading to disappointment and a need for corrective actions.

What are your thoughts on Microsoft’s ability to meet the terms of this EU settlement?

Share your insights in the comments below or share this article with your network!

What specific contractual changes has Microsoft agreed to implement for European customers, and how do these address concerns about vendor lock-in?

Understanding the CISPE Challenge & Microsoft’s Response

The Cloud Infrastructure Service Providers in europe (CISPE) has been a vocal advocate for fairer competition within the European cloud market. Their core argument centers around concerns that hyperscale cloud providers – notably Microsoft, Amazon Web Services (AWS), and google Cloud – leverage unfair advantages, especially regarding data localization, sovereign cloud offerings, and contractual terms. recently, Microsoft has demonstrably responded to these pressures, signaling a potential shift in the EU cloud landscape. This move impacts cloud services, digital sovereignty, and the future of EU cloud infrastructure.

Key Concessions Made by Microsoft

Microsoft’s concessions, announced in July 2025, address several key areas highlighted by CISPE.these aren’t a complete overhaul, but represent meaningful steps towards leveling the playing field.

Contractual Changes: Microsoft has agreed to revise it’s standard contract terms for European customers. This includes greater transparency regarding data processing locations and enhanced portability options, making it easier for customers to switch providers. This directly addresses concerns about vendor lock-in and data portability.

Interoperability Commitments: A commitment to improve interoperability between Microsoft Azure and other cloud platforms.While specifics are still being fleshed out, this aims to reduce barriers to multi-cloud and hybrid cloud deployments. This is crucial for organizations pursuing a multi-cloud strategy.

Data Residency Options: Expanded options for data residency within the EU, allowing customers to choose where their data is stored and processed, aligning with stricter data localization regulations.

Fair Access to APIs: Improved access to APIs for smaller cloud providers, enabling them to better integrate with Microsoft’s ecosystem and compete more effectively. This fosters innovation within the cloud computing market.

The Impact on EU Cloud Competition

These changes are expected to have a ripple effect across the European cloud market.

Increased Choice for Businesses: European businesses, particularly SMEs, will have more options when selecting cloud providers, fostering a more competitive habitat. This benefits digital transformation initiatives.

Growth of Local Cloud Providers: CISPE members and other European cloud providers are likely to see increased opportunities as barriers to entry are lowered. This supports the advancement of a robust European cloud ecosystem.

Enhanced Data Security & Sovereignty: Greater control over data location and processing strengthens data security and aligns with the EU’s focus on digital sovereignty and the General Data Protection Regulation (GDPR).

Stimulation of Innovation: A more competitive market encourages innovation in cloud services, leading to better products and lower prices for customers.

CISPE’s Role and Future Advocacy

CISPE’s persistent advocacy has been instrumental in bringing these issues to the forefront. Their efforts have included:

formal Complaints: Filing formal complaints with the european commission regarding anti-competitive practices.

Public Awareness Campaigns: Raising awareness among policymakers and the public about the challenges faced by European cloud providers.

Collaboration with Regulators: Working closely with EU regulators to develop policies that promote fair competition in the cloud market.

CISPE continues to advocate for further reforms, including stricter enforcement of competition laws and the development of a European cloud certification scheme. They are pushing for a truly level playing field, not just concessions.

Practical Implications for Businesses

What does this mean for businesses operating in the EU?

1. Review Cloud contracts: Carefully review existing cloud contracts with Microsoft and other providers to understand your rights regarding data portability and residency.
2. Explore Multi-Cloud Options: Consider adopting a multi-cloud strategy to reduce vendor lock-in and increase resilience.
3. Assess Data localization Needs: Evaluate your data localization requirements and choose cloud providers that can meet those needs.
4. Stay Informed: Keep abreast of developments in EU cloud policy and regulations.

The broader Context: EU Cloud Strategy & GAIA-X

Microsoft’s response also occurs within the broader context of the EU’s cloud strategy, including the GAIA-X initiative. GAIA-X aims to create a secure, federated data infrastructure for Europe, promoting data sovereignty and innovation. While GAIA-X is a long-term project, it provides a framework for fostering a competitive European cloud market. The concessions from Microsoft can be seen as aligning with the goals of GAIA-X, even if not directly part of the initiative. GAIA-X represents a significant investment in future-proof cloud infrastructure.

Real-World Examples & Early Adopters

While widespread adoption of the new contractual terms is still unfolding, several european organizations are already exploring the implications. Such as, the German Fraunhofer Institute, a leading research organization, has publicly stated its intention to leverage the improved data portability options to diversify its cloud providers. Similarly, several financial institutions in France are evaluating the enhanced data residency options to comply with stricter regulatory requirements. These early adopters demonstrate the practical value of the changes.

Benefits of a Competitive EU Cloud Market

A truly competitive EU cloud market offers numerous benefits:

Lower Costs: Increased