Why Microsoft Is Adopting European Cloud Principles

The President and Vice Chair of Microsoft recently announced the company's commitment to adopting European cloud principles at an event in Brussels and in a post on the company's EU policy blog. Discover five principles by which the company plans to support solution providers in the European Union and find out why Microsoft is changing its licensing practices to preserve a competitive environment for technological innovation in Europe.

What Are the European Cloud Principles?

Brad Smith, the President and Vice Chair of Microsoft, identified five principles to direct the company's approach to cloud computing in Europe. These principles express the following best practices:

1. Microsoft will ensure its public service meets needs and serves values in Europe.
2. Microsoft technology provides a platform for the success of service providers.
3. The company will partner with and support European providers.
4. Microsoft will ensure offerings meet the sovereign needs of European governments.
5. The company will adapt to and support European technology regulations.

These five principles will guide every aspect of Microsoft's operations in Europe, where the company has announced a flagship Solution Provider program. European service providers can join the partnership program to host and run Microsoft products on their infrastructure for customers, including software that was previously only licensed for on-premises desktops and servers.

Smith clarified that the new guiding principles for European operations are broad steps but not exhaustive measures. Microsoft presents these principles as the basis for further discussion and negotiation along these lines and the Fair Software Licensing Principles established by the CIGREF network and the Cloud Infrastructure Services Providers in Europe (CISPE).

Why Is Microsoft Adopting European Standards?

Microsoft has adopted these principles in response to feedback from European customers, service providers and regulators. In terms of global revenues for cloud services, the company currently trails Amazon and is closely followed by Google. These standards acknowledge and attempt to address a decline in revenues of smaller service providers to preserve what Smith calls a "healthy competitive environment" in this technology market.

Since 2020, Microsoft has completed or is in the process of constructing a total of 17 data center regions in Europe and has made investments in excess of $12 billion in the region. Smith explains that these investments were not made to replicate and attempt to replace smaller providers but to give the tech giant the ability to support these enterprises through partnerships.

How Do European Standards Impact International Users?

Microsoft has set forth these standards based on the business environment in the European technology sector. This region has unique regulations, such as the General Data Protection Regulation, which went into effect in 2018. The GDPR has affected the handling of cookies and other online data tracking around the world. While this regulation and the recent standards set forth by Microsoft do not apply outside of Europe, these standards indicate the approach that the company is taking to compete with the leading global provider.

By preserving its competitive edge, Microsoft remains a viable competitor to Amazon Web Services. Microsoft currently holds just over 20% of the market share, while Amazon has captured around 33% of global revenue for cloud services. Other large providers such as Google, Alibaba and IBM (Kyndryl) also pose a threat to regional providers. By partnering with these regional providers, Microsoft enables smaller enterprises to stay competitive and offer in-demand services.

How Will Microsoft Implement the European Principles?

Microsoft plans to encourage a significant number of software hosting companies based throughout Europe and in the United Kingdom to join the new Solution Provider program. These providers will be able to directly offer customers Windows and Office, excluding Windows 11 and M365 Apps for Business and Enterprise, as part of complete hosted desktop solutions built, sold and hosted on their own infrastructure.

Microsoft's European Principles enable providers to offer complete, end-to-end solutions to their current and potential customers. The Solution Provider program can accommodate both unified hosting solutions that include product licenses and bring-your-own-license scenarios. Microsoft is revising licensing terms and mobility rights for providers and customers while expanding the benefits and terms for hosted solutions under its Software Assurance program.

What Are the Benefits of the European Cloud Principles?

The direct beneficiaries of Microsoft's new approach to licensing and service provision in Europe include service providers and any businesses that pursue Office 365 onboarding. The principles address the pain points expressed by providers by calling for expanding the range of products that are available to customers at fixed pricing for longer terms. Administrators and users can choose the most functional and cost-effective regional services authorized to license Microsoft services.

Through these principles, Smith establishes the company's commitment to building a public cloud that takes a "deep and forward-looking" approach to meeting the "economic, security and cultural needs" of European enterprises and consumers. These benefits extend from the advantages that a competitive provider market offers to businesses and individuals to meeting the sovereign needs of governments.

The principles Microsoft has set forth support the ability of Cloudficient to help enterprises based in Europe migrate to the cloud. We are changing the way that businesses stay at the forefront of technology with our unmatched next-generation migration technology. Our consistent focus on creating products that match client needs enables us to provide affordable services that are scalable, fast and seamless.

With unmatched next generation migration technology, Cloudficient is revolutionizing the way businesses retire legacy systems and transform their organization into the cloud. Our business constantly remains focused on client needs and creating product offerings that match them. We provide affordable services that are scalable, fast and seamless.  

If you would like to learn more about how to bring Cloudficiency to your migration project, visit our website, or contact us.