Cispe Urges Microsoft to End Azure Discounts Linked to Office Products, Threatens Legal Action

The interest group of European cloud providers Cispe is calling on Microsoft to discontinue the practice of offering discounts to Azure customers. These discounts are provided to customers who purchase Office products, creating a disadvantage for alternative cloud environments in terms of competition.

Cispe, the Cloud Infrastructure Service Providers in Europe, has raised concerns in a letter about Microsoft's business practices. The organization is urging Microsoft to revise this strategy, and if no action is taken, Cispe is prepared to pursue legal action.

Cispe is critical of the way in which Microsoft promotes its Azure cloud environment by bundling Office products with it. This has implications for the costs incurred by administrators when installing software like Windows Server or SQL Server on Azure environments. Cispe's customers have conducted calculations using the Azure Pricing Calculator. According to these calculations, customers often end up paying significantly more to use SQL Server on Azure compared to other cloud providers. The same applies to the use of Office software, which is a crucial component for many users. Cispe states, "“European cloud providers' customers expect them to include essential Microsoft software, such as Office, in their cloud migration contracts."

In addition to the bundling discount, Cispe is also critical of the restrictions Microsoft imposes on Windows 10 or 11 virtual machines that are not running on Azure Virtual Desktop. While Azure allows administrators to allocate up to 32 users across three VMs, competing cloud services require administrators to deploy 32 VMs individually, as concurrent sessions are not permitted. According to Cispe, this results in Azure costing up to four times more in such scenarios, even if the per-VM price at competitors is lower than that of Azure.

The organization asserts that this issue represents a clear competitive concern, with Microsoft engaging in price discrimination and putting financial pressure on competing cloud services. Details regarding the specific legal measures Cispe intends to take to address these concerns have not been disclosed. Cispe previously engaged in discussions with Microsoft on the same topic, but these discussions did not result in any changes.