Between 2018 and 2023, one cloud firm saw revenues from selling Microsoft products climb over 300% — but profit margins plunged, according to a complaint.
CISPE, a trade body for infrastructure as a service cloud firms in Europe, issued a complaint Friday alleging that Microsoft's licensing terms for running its software products on alternative clouds are destroying profit margins for rival cloud providers.
The claim came in a complaint from CISPE, a trade body for "infrastructure as a service" cloud firms in Europe. It also comes as the Redmond, Washington-based technology giant is facing intense scrutiny over its cloud computing and software licensing practices in the European Union, as well asThe allegations stem from tweaks Microsoft made to its licensing terms in 2019.
Microsoft declined to comment when contacted by CNBC. In 2022, Microsoft President Brad Smith wrote asaying it was revising its licensing deals and making it easier for cloud providers to compete. The biggest decline in profit margins for this cloud firm occurred in 2019, the same year Microsoft changed its licensing terms to favor licensing software on Azure, the CISPE said. From 2019 to 2020, the CISPE member concerned saw their margin collapse from over 20% to zero.
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