7 ms·

A stumbling block here might be that neither Azure nor Windows Server has that big of a market share in the wider cloud market. In that case it could be argued

by zokier 2y ago

A stumbling block here might be that neither Azure nor Windows Server has that big of a market share in the wider cloud market. In that case it could be argued that no matter how unfair, their pricing is not illegal; market power is afaik fairly significant aspect in anti-competitive lawsuits

wmf 2y ago
If Windows Server has ~50% of the overall server market and is trying to use that to support Azure it's a legitimate complaint.
- LordKeren 2y ago
  What does the 50Z unit refer to? I have not come across the term
  - wmf 2y ago
    Sorry, I'm not sure how that typo slipped in.
- zokier 2y ago
  That is big if though. Afaik even in Azure MS has said that majority of servers run Linux, and on other clouds I imagine Windows' market share is significantly smaller
  - wmf 2y ago
    Again, I am not talking about the cloud market. The overall server market is ~5x larger than cloud.
jaysinn_420 2y ago
Enterprises are moving more and more workloads to cloud, and they tend to have 70-80% Windows OSes on their virtual server workloads. With Microsoft's licensing constraints it is a very real barrier to them choosing any cloud except Azure, and this is a multi-trillion dollar market space, larger than the current hyperscalers combined.
LordKeren 2y ago
*In the states Google filed this complaint to the European Commission - and given the EC’s recent decisions around the tech giants in general- it is probably wise for azure to address this now. This fee is brazenly anticompetitive.
candiddevmike 2y ago
Windows Server has a complete monopoly on the Windows Server workload market. It's the same argument that folks use to defend Apple and iPhones. A market can be fairly "niche" but have a massive value capable of anti-competitive practices.
- lvzw 2y ago
  Relevant market definition is not so straightforward in antitrust matters. I'm not a product area expert (but do have experience in antitrust litigation) and am certain that Microsoft's attorney's would say that such a market is too narrowly defined. [1] https://www.justice.gov/atr/merger-guidelines/tools/market-definition https://www.justice.gov/atr/merger-guidelines/tools/market-d...
taeric 2y ago
The problem here is leveraging a dominance in another market to influence the newer one, though? You could almost compare this to exfiltration costs the different cloud companies have. Where they have clear incentives not to make it cheap to offload all of your data. That does have obvious costs associated to the providers, at least.
- Spooky23 2y ago
  It’s more than that. Microsoft had clear rules for licensing on prem. You didn’t pay more to use HPE vs. Dell or Dell vs. Surface. If you chose to buy VMWare, same deal, as long as you followed certain licensing rules with respect to migration and other factors. Now you pay a tax unless you use the favored provider. When I looked a couple of years ago, you could not license Windows client at all in cloud, unless you used on of the MS virtual desktop offerings.
- zokier 2y ago
  But does Windows Server "dominate" server OS or especially cloud server OS market? Vast majority of servers in cloud run Linux....
  - taeric 2y ago
    But that is somewhat missing the point. This locks in people that are currently doing on-prem servers so that they are cost prohibitive to move to a cloud that isn't MS. Again, you can almost argue that clouds do this with expensive exfiltration costs. At least that corresponds to work you are asking them to do, though. This is purely a licensing trap to keep people from choosing an option.
    - zokier 2y ago
      They can move to different OS if they don't like MS licensing policy. I'm sure IBM and Oracle etc are more than happy to take them as customers, MS does not have monopoly on server side.
Spooky23 2y ago
That’s a stretch. Windows is dominant in significant sectors of the IT market. They own enterprise, government and education. The company engages in a wide variety of business behaviors to compel customers to use their service. Anti-competitive behavior like this, license audits where you settle up with Azure credits, O365 tie in, etc. In the other areas of the cloud market where these is competitive pressure, their offerings are competitive with AWS, GCP and others.
GeekyBear 2y ago
Windows has previously been ruled to have a monopoly market share in both the US and the EU. There's certainly a case that can be made that having Windows licencing fees be many times more expensive (unless you use Microsoft's own cloud service) would be an instance of illegal tying. > Antitrust concerns arise when such arrangements are used to maintain or augment the seller’s pre-existing market power or impair competition on the merits in the market for the tied product https://www.law.cornell.edu/wex/tying_arrangement https://www.law.cornell.edu/wex/tying_arrangement
diggan 2y ago
> market power is afaik fairly significant aspect in anti-competitive lawsuits That's such a backwards concept that you have in the US. "This company is being anti-competitive, but haven't yet reached enough market power so we'll wait to address this problem until they have more market power", how does that make sense? That will only make it harder to fix in the future. Attack the problem head on, before it becomes too large. But then we're talking about "The Land of Corporations" here so maybe I'm just being idealistic.
pjmlp 2y ago
While kind of true, it is still out there, about 40% of Azure workloads currently. And enough on many Microsoft shops, especially due to stuff stuck on .NET Framework, Sharepoint, Active Directory and such.
quitit 2y ago
I think this is why they filed in the EU instead of the United States. The EU has demonstrated that they'll narrow the boundary of the market and ignore marketshare if they see there is an EU-centric advantage to be had. This also lends into Google's opening wording where they frame the behaviour as a threat to the EU, rather than a threat to Google's Cloud business. Or a more controversial take: The EU has demonstrated a naive over-eagerness to legislate in tech matters despite the absence of harm. (Versus a more conservative USA that is wary of upending industries without proven harm.)
- lenkite 2y ago
  > The EU has demonstrated a naive over-eagerness to legislate in tech matters despite the absence of harm. You mean the EU is not as deeply corrupt as good old USA and actually cares about anti-competitive behavior. This is the opposite of the USA that will blow a LOT of hot air but never truly target and penalize any big company that is bribing the political establishment with campaign funding ?
  - quitit 2y ago
    The EU uses “anticompetitive” concern as marketing for protectionism. If not, then Spotify would be a deemed a gatekeeper under the DMA. Instead Spotify met with the commission more than 65 times during the development of the DMA. Plus has the lowest pay out rates to artists of the leading music services, the fewest and slowest developing feature profile, the largest targeted consumer ad tracking network, and have progressively raised prices in recent months. So no, the EU isn’t whatever you think it is.
    - lenkite 2y ago
      Are you referring to the €1.8 billion Anti-trust fine against Apple ? Where Spotify met the EU commission 65 times during the course of its investigation ? What is wrong with that ? NO one should be forced to kneel to Apple's ridiculous criminal mafia pricing. Considering that Spotify sells music on its web-site, why should Apple abuse power to force payment through themselves, obtain a free pass on theft and mandate higher prices on everyone ? Blatant American corporate robbery through forced threats of expulsion should no longer be tolerated by the rest of the world and it is good that the EU is fighting back.

by zokier 2y ago

wmf 2y ago

If Windows Server has ~50% of the overall server market and is trying to use that to support Azure it's a legitimate complaint.

LordKeren 2y ago
What does the 50Z unit refer to? I have not come across the term
- wmf 2y ago
  Sorry, I'm not sure how that typo slipped in.
zokier 2y ago
That is big if though. Afaik even in Azure MS has said that majority of servers run Linux, and on other clouds I imagine Windows' market share is significantly smaller
- wmf 2y ago
  Again, I am not talking about the cloud market. The overall server market is ~5x larger than cloud.

jaysinn_420 2y ago

Enterprises are moving more and more workloads to cloud, and they tend to have 70-80% Windows OSes on their virtual server workloads. With Microsoft's licensing constraints it is a very real barrier to them choosing any cloud except Azure, and this is a multi-trillion dollar market space, larger than the current hyperscalers combined.

LordKeren 2y ago

*In the states Google filed this complaint to the European Commission - and given the EC’s recent decisions around the tech giants in general- it is probably wise for azure to address this now. This fee is brazenly anticompetitive.

candiddevmike 2y ago

Windows Server has a complete monopoly on the Windows Server workload market. It's the same argument that folks use to defend Apple and iPhones. A market can be fairly "niche" but have a massive value capable of anti-competitive practices.

lvzw 2y ago
Relevant market definition is not so straightforward in antitrust matters. I'm not a product area expert (but do have experience in antitrust litigation) and am certain that Microsoft's attorney's would say that such a market is too narrowly defined. [1] https://www.justice.gov/atr/merger-guidelines/tools/market-definition https://www.justice.gov/atr/merger-guidelines/tools/market-d...

taeric 2y ago

The problem here is leveraging a dominance in another market to influence the newer one, though? You could almost compare this to exfiltration costs the different cloud companies have. Where they have clear incentives not to make it cheap to offload all of your data. That does have obvious costs associated to the providers, at least.

Spooky23 2y ago
It’s more than that. Microsoft had clear rules for licensing on prem. You didn’t pay more to use HPE vs. Dell or Dell vs. Surface. If you chose to buy VMWare, same deal, as long as you followed certain licensing rules with respect to migration and other factors. Now you pay a tax unless you use the favored provider. When I looked a couple of years ago, you could not license Windows client at all in cloud, unless you used on of the MS virtual desktop offerings.
zokier 2y ago
But does Windows Server "dominate" server OS or especially cloud server OS market? Vast majority of servers in cloud run Linux....
- taeric 2y ago
  But that is somewhat missing the point. This locks in people that are currently doing on-prem servers so that they are cost prohibitive to move to a cloud that isn't MS. Again, you can almost argue that clouds do this with expensive exfiltration costs. At least that corresponds to work you are asking them to do, though. This is purely a licensing trap to keep people from choosing an option.
  - zokier 2y ago
    They can move to different OS if they don't like MS licensing policy. I'm sure IBM and Oracle etc are more than happy to take them as customers, MS does not have monopoly on server side.

Spooky23 2y ago

That’s a stretch. Windows is dominant in significant sectors of the IT market. They own enterprise, government and education. The company engages in a wide variety of business behaviors to compel customers to use their service. Anti-competitive behavior like this, license audits where you settle up with Azure credits, O365 tie in, etc. In the other areas of the cloud market where these is competitive pressure, their offerings are competitive with AWS, GCP and others.

GeekyBear 2y ago

Windows has previously been ruled to have a monopoly market share in both the US and the EU. There's certainly a case that can be made that having Windows licencing fees be many times more expensive (unless you use Microsoft's own cloud service) would be an instance of illegal tying. > Antitrust concerns arise when such arrangements are used to maintain or augment the seller’s pre-existing market power or impair competition on the merits in the market for the tied product https://www.law.cornell.edu/wex/tying_arrangement https://www.law.cornell.edu/wex/tying_arrangement

diggan 2y ago

> market power is afaik fairly significant aspect in anti-competitive lawsuits That's such a backwards concept that you have in the US. "This company is being anti-competitive, but haven't yet reached enough market power so we'll wait to address this problem until they have more market power", how does that make sense? That will only make it harder to fix in the future. Attack the problem head on, before it becomes too large. But then we're talking about "The Land of Corporations" here so maybe I'm just being idealistic.

pjmlp 2y ago

While kind of true, it is still out there, about 40% of Azure workloads currently. And enough on many Microsoft shops, especially due to stuff stuck on .NET Framework, Sharepoint, Active Directory and such.

quitit 2y ago

I think this is why they filed in the EU instead of the United States. The EU has demonstrated that they'll narrow the boundary of the market and ignore marketshare if they see there is an EU-centric advantage to be had. This also lends into Google's opening wording where they frame the behaviour as a threat to the EU, rather than a threat to Google's Cloud business. Or a more controversial take: The EU has demonstrated a naive over-eagerness to legislate in tech matters despite the absence of harm. (Versus a more conservative USA that is wary of upending industries without proven harm.)

lenkite 2y ago
> The EU has demonstrated a naive over-eagerness to legislate in tech matters despite the absence of harm. You mean the EU is not as deeply corrupt as good old USA and actually cares about anti-competitive behavior. This is the opposite of the USA that will blow a LOT of hot air but never truly target and penalize any big company that is bribing the political establishment with campaign funding ?
- quitit 2y ago
  The EU uses “anticompetitive” concern as marketing for protectionism. If not, then Spotify would be a deemed a gatekeeper under the DMA. Instead Spotify met with the commission more than 65 times during the development of the DMA. Plus has the lowest pay out rates to artists of the leading music services, the fewest and slowest developing feature profile, the largest targeted consumer ad tracking network, and have progressively raised prices in recent months. So no, the EU isn’t whatever you think it is.
  - lenkite 2y ago
    Are you referring to the €1.8 billion Anti-trust fine against Apple ? Where Spotify met the EU commission 65 times during the course of its investigation ? What is wrong with that ? NO one should be forced to kneel to Apple's ridiculous criminal mafia pricing. Considering that Spotify sells music on its web-site, why should Apple abuse power to force payment through themselves, obtain a free pass on theft and mandate higher prices on everyone ? Blatant American corporate robbery through forced threats of expulsion should no longer be tolerated by the rest of the world and it is good that the EU is fighting back.