Skip to content

Microsoft Customers Decry Cloud Contracts That Sideline Rivals

The software giant says it will make changes to address customer concerns that it hinders use of rival clouds with Windows, Office

Microsoft cloud
Photographer: Krisztian Bocsi/Bloomberg
Updated on

The current tide of antitrust scrutiny and regulations focused on big technology companies has conspicuously omitted one company: Microsoft Corp., the software and cloud-computing behemoth that was the notorious target of a landmark U.S. government lawsuit in the 1990s. Microsoft, the thinking goes, was already humbled by years of intense government oversight, and since it largely caters to other companies, instead of consumers, it doesn’t belong in the same category as Facebook, Amazon, Google and Apple.

But now some Microsoft customers, and some of its fiercest rivals, are making a bold claim: The software giant is again using its sway over one market to thwart competition in another. 

Microsoft three years ago overhauled the way it licenses some of its most ubiquitous software programs, including Windows and Office, in ways that increase the cost of running those programs on rival cloud-computing systems like Amazon Web Services and Google Cloud Platform. In some cases, the revamped agreements outright forbid using some products on competing cloud services. AWS and Google say they have complained to Microsoft on behalf of multiple customers. French cloud provider OVH, along with other unidentified companies, filed a complaint last year with European regulators about the practice, saying it’s also being hurt by Microsoft’s policies. 

Major business software customers, some of which are only now starting to see the impact as they renew deals or replace aging programs, are also incensed. Over a six-month period, Bloomberg spoke with five Microsoft customers and three software resellers working with clients affected by the changes.

After being contacted by Bloomberg News, Microsoft President and Vice Chair Brad Smith said the company will talk with customers and rivals and is committed to addressing the issues. “There definitely are some valid concerns,” he said in an interview. “It’s very important for us to learn more and then make some changes.”