Companies that have invested heavily in Microsoft software literally cannot leave the company’s Azure cloud to move to AWS or Google Cloud Platform instead of their own servers. Using the Redmond giant’s software on third-party clouds is very expensive due to Microsoft’s licensing policies, and rewriting the software for Linux may be even more expensive, The Register reports.
AWS and Google complained to the UK Competition and Markets Authority (CMA), which is investigating the country’s cloud market, that customers were faced with a dilemma: either use Azure or pay four times more to run Windows Server and SQL Server applications in third-party clouds. In 2019, Microsoft introduced a “prohibitive” licensing system, requiring separate licenses to run Windows Server and SQL Server in the clouds of Amazon, Google and Alibaba.
The simplest solution would be for customers to migrate to Linux, but they often have invested heavily in the Microsoft ecosystem and have no choice — they are “very dependent” on Windows and other products. Google complains about Microsoft’s artificial tie to Windows Server and SQL Server — upgrading and migrating such systems to Linux “will take years and years.” In fact, all applications that have been created for the Microsoft ecosystem for years will have to be rewritten. According to Google, some companies actually spent several years on such a migration, which affected prices for end users. Many organizations simply do not have the resources for such “reforms.”
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In addition, companies using Windows Server on their own hardware and wanting to move to the cloud have virtually no choice due to the cost of licenses – migrating to Azure will be significantly cheaper for them than to other clouds. AWS also agrees that moving to Linux and another cloud is a very expensive, often economically unjustifiable task for many Azure customers. According to Google’s calculations, 70-80% of Azure’s revenue comes from customers using Windows Server and SQL Server. Thus, Google says, this particular software is a “critical part” of the cloud market.
Google and AWS want the CMA to resolve the issue of Microsoft’s anti-competitive pricing. The British regulator has already preliminarily decided that the company’s behavior does indeed not comply with the rules of a “healthy” market. Microsoft itself believes that there is nothing illegal in retaining customers when switching from on-premise to the cloud. In its opinion, when approaching SPLA pricing, it maintains a balance, asking for “not too little, but not too much.” In addition, the company offers a Linux version of SQL Server.
The CMA is expected to make its final decision on July 4. Other issues under investigation include egress fees and technical barriers to migrating from cloud to cloud. The CMA itself does not see any major problems with this, but small cloud providers disagree, believing that such obstacles are only beneficial to hyperscalers. The Big Three have formally abolished the “fines” for migrating data to another cloud. However, Amazon does not require you to give up all services and close your accounts when migrating, while Microsoft and Google do.