Google calls out Microsoft’s cloud software licensing ‘tax’

Google is very publicly adding to the chorus of complaints about Microsoft’s alleged restrictive cloud software licensing policies, claiming that unless the European Union formally tackles it, the industry and customers will suffer lasting damage.

Amit Zavery, vice president, general manager, and head of platform at Google Cloud, says antitrust regulators are “starting to understand the situation” and are asking questions.

“Any enterprise company will be impacted negatively if things are not resolved properly,” he told The Register. “I think there should be appetite [from the regulators] and I think there should be movement in that area to really put some kind of checks and balances on Microsoft’s policies.”

One bone of contention for Google, the third-largest public cloud provider globally and in Europe, is that it simply costs more to run Microsoft software on third-party providers’ clouds. This is due to extra licensing costs levied by Microsoft when you run its applications on non-Microsoft clouds, we’re told.

“Microsoft publicly touts that if you run their software on Azure versus other vendors like AWS and GCP, it’s five times cheaper or it’s more expensive to run on us, basically because of the tax customers have to pay to Microsoft,” Zavery told us.

“The price of the products are the same in terms of infrastructure and everything else, so the licensing cost is more expensive because of using providers other than Azure,” he added.

“On premises, they could run it on any hardware, there was no restriction really. But now if you want to run it on any other cloud provider, you have to pay a tax and penalty to Microsoft if it’s not running on Azure, or in the preferred providers of their choice.

“So that, I think, is a big issue because, of course, all enterprises have a large footprint of Microsoft products like Office and Windows, SQL Server and others as well, and if you don’t allow that for products which have been paid for already by customers to be run anywhere, without paying a penalty to Microsoft, you’re just getting getting beholden to Microsoft.

“That’s the big, big problem for many enterprises today where they can’t bring their licenses wherever they choose to. There is nothing technically preventing that from happening either. It’s running on standard compute, which of course Microsoft allows for some cloud providers to use and run their products on, but not AWS, or GCP.”

Microsoft is the only one of the big three cloud providers that has a huge installed base of customers that have been using its wares and services for decades before the cloud showed up. Microsoft’s meteoric growth recorded with Azure was due to its “policies,” the Google exec said.

“It shows you how much pull they have, that is the cost to customers, because they don’t have a choice,” he told The Reg.

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