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Microsoft changes cloud practices in Europe, acknowledges missteps in rivalry with Amazon

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Microsoft President Brad Smith. (GeekWire File Photo / Dan DeLong)

Microsoft responded to criticism of its cloud licensing policies in Europe with a series of promises to change its licensing practices and overall principles to level the playing field for local cloud providers.

Brad Smith, Microsoft president, outlined the changes in an extensive post this morning, citing recent coverage by the Financial Times that pointed to the potential for new antitrust action against the company in Europe. Critics said the company was wrongly tying Windows and Office to Azure to fuel its cloud growth.

The changes include the ability for European cloud providers to offer Windows and Office on a hosted basis as part of their own solutions, independent of Microsoft’s cloud platform.

Smith wrote that he and others from Microsoft have held a series of meetings with European cloud providers over the past few weeks.

“Some of the most compelling feedback for me personally came from a CEO who said that he felt that he ‘was a victim of friendly fire in Microsoft’s competition with Amazon.’ It was hard to hear this – but he was right. Over the past few years, our focus on competing with the largest technology providers has resulted in us not being as attentive to the impact on our cloud provider partners. We are making changes to remedy this, beginning today.”

Whether the changes are enough to allow Microsoft to avoid new antitrust action in Europe remains to be seen. Smith acknowledged that the new policies and principles are “very broad but not necessarily exhaustive,” and said the company will announce “further steps in the months ahead.”

Microsoft Cloud revenue reached $23.4 billion, up 32% year-over-year, in its most recent quarterly report.

Microsoft is second to Amazon Web Services but rising in overall cloud market share.

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