back to article Microsoft: So what if it costs 4X as much to run Windows Server in AWS, Alibaba, and Google?

For AWS and Google to urge the UK competition regulator to "intervene and constrain the price" that Microsoft charges them to license its software in their clouds is both "extraordinary and unprecedented." Or so says Microsoft in a response to the Competition and Markets Authority (CMA), Britain's anti-trust police which …

  1. Tom7

    It's honestly hard to see this going well for Microsoft. One of the cloud vendors also controls a major operating system that customers need to run particular workloads, and they offer wildly different pricing for running it on their own cloud compared to other clouds. It's pretty much the definition of anti-competitive pricing.

    Trying to dress it up comparing to running the same workload on-prem doesn't really cut it.

    1. DrkShadow

      > One of the cloud vendors also controls a major operating system that customers need to run particular workloads, and they offer wildly different pricing for running it on their own cloud compared to other clouds.

      This is one of those times when I feel: how aren't they justified in doing this?

      They made the OS. They keep it up, they license it out, they use it, they improve it, they so-on - all without the assistance of anyone outside of Microsoft.

      Then they're being told: they can't bundle it, like a cable TV provider bundles channels. They can't optimize it for the systems that they're running it on. They can't do anything with it, unless someone else is doing it, too, in the same way, for the same cost. How does this make sense?

      I really feel like all of this "anti-trust" is starting to over-step its bounds. Microsoft isn't undercutting the hardware pricing if you use their OS on their cloud. They're bundling - and giving you the OS/SQL licensing for free/cheap. Like getting HBO for "free" when you pay for Disney. It's not comparable to giving you free DataDog when you use Kubernetes in Azure cloud. Basically: they're not doing something that is unsustainable for them, like when Amazon was selling diapers at below-cost to shut out a competitor. Microsoft can license their own software this way, and keep doing it, and continue doing it, and it's just their business. Why is that a problem? Let Amazon et. al make their own GUI-based OS and *compete*, right? What Microsoft is doing *is* competition, and is actual and valid competition.

      Even so, I'm not these market-watchdogs, I'm not the trade groups, and no one is listening to a commentator on The Reg, so I guess we'll see. I don't like MS, I actively avoid using their software, I wish they would just go away, but I do feel that they are *not* acting anti-competitively.

      1. John Robson Silver badge

        They can optimise Azure as much as they like - what they shouldn't be allowed to do is use their regrettable dominance in one area of business to "compete" in another area... Feel free to discount your cloud prices knowing that some percentage of them will be pulling MS licenses, but those licenses should not be punitive for choosing to use a different computer than the one MS want you to (pay to) use.

        1. LybsterRoy Silver badge

          "punitive " Interesting choice of language. How about Microsoft must not give their customers a discount for going with Microsoft? Would you allow them the ability to offer a lower price than their competitors, if so, by how much? Possibly Microsoft should be forced to charge their customers more so Google & Amazon can compete.

          1. John Robson Silver badge

            It's the licensing costs of Windows we're talking about - nothing else.

            If MS want to discount their cloud provision pricing that's different from them charging customers more for running windows simply because it's on a computer they don't control.

            1. Andrew Scott Bronze badge

              do they charge people more for running it on a mac?

              1. EnviableOne

                thats another issue, Apple dont let you run it on a mac

          2. Ian Johnston Silver badge

            That's been done. Year's ago BT were forced to double the cost of calls from their payphones so that other operators could compete with them. Not exactly a consumer-focussed decision.

      2. Dinanziame Silver badge

        Then they're being told: they can't bundle it, like a cable TV provider bundles channels. They can't optimize it for the systems that they're running it on. They can't do anything with it, unless someone else is doing it, too, in the same way, for the same cost. How does this make sense?

        Because they have a dominant or quasi-monopoly position. Which means that by using that position as leverage, they could threaten users into accepting massively disadvantageous conditions and suppress their competitors. This is about as if the unique internet provider in your area would bundle their service with a bag of dog shit that you don't want, but that you are forced to buy every month if you want internet.

        1. DrkShadow

          The reading is: Microsoft can't offer a lower price than any other cloud provider. If they do, it's anti-competitive.

          ?

          What can they do?

          I can get basically free phone service through my ISP if I "bundle" them, and it's basically the only provider. Or at least, that has been the case where I used to live - there's one cable internet ISP and your other choice was dial-up.

          1. IGotOut Silver badge

            You're misreading it.

            Let's use BT / Openreach as a UK example.

            BT as it was, owned most of the telecoms infrastructure that the UK depended on.

            So we'll call this the Windows part, as people need these to get the job done.

            Now anyone can run broadband on top of this.

            Let's call this the Azure part, as there is plenty of competition and people can charge what they want for this service.

            A customer with BT broadband will pay £30 per month, as BT discounts its underlying phone line part because your using BT broadband

            BT charge the competition (the azure bit) £80 per month just to use BT"s phone lines to provide their broadband service to the end customer.

            Now see the problem?

            1. DrkShadow

              You've got it backward.

              The infrastricture is the infrastructure -- azure is the telecoms infrastructure. It's literally 1 to 1.

              Windows is the "thing on top". You can use it, but you don't need to. Microsoft gives you a "discount" for using their Windows, because you're paying for their infrastructure. Or, hey, you can totally buy your own separate Windows license and use your own computers or others' computers or whatever. Others companies can't provide the same discount because, well, Windows isn't theirs. I mean they can, but they'd be selling at a loss. (In fact *that* would be anti-competitive against other cloud providers, or colo providers, even.) (Google *does* provide Google Docs, though. They don't license that to MS, at all, either.)

              See how you're telling a company that they can't price their offerings less than another? Microsoft isn't being *anti-competitive* because they are not selling at a loss to undercut competition. They can maintain this price forever -- they're not doing it to try and wear down competition, at harm to themself, so that they can then raise prices once there's none left (like Amazon did with diapers).

              Honestly I think each of us probably just fundamentally disagrees with the other, and there's not going to be a resolution by "explaining it better". The legal fight will have to be fought, and the courts will have to weigh in.

              1. John Robson Silver badge

                Meh -Windows could easily be considered the infra here, because it's the base of what some customers "need".

                The hardware that supports it is the changeable bit...

                1. sabroni Silver badge

                  re: because it's the base of what some customers "need".

                  The fact you put that in quotes makes it clear you understand that customers choose to use MS. It isn't a "need", there is nothing forcing them to use MS for this stuff and judging by the amount of node developer jobs around atm there are plenty of people making an alternative choice.

                  You are letting your hate of MS get in the way of logic. I don't see why 'cos Amazon are a much bigger bunch of cunts that MS have ever been. I don't see MS bigwigs throwing their support behind the rise of facsim like Bezos either....

                  1. Peter-Waterman1

                    Re: re: because it's the base of what some customers "need".

                    The argument you put forward is don’t use Windows. In reality, an old, but critical application running on .Net must run on windows. There are millions of these applications out there and trying to make them run on Linux requires investment and time, both of which companies don’t have for these applications.

                    Your argument is flawed sir.

              2. Dinanziame Silver badge

                Basically, Microsoft offering a rebate on Windows to customers who use Azure is similar to them selling Azure at a loss, which as you say would be anti-competitive. If your product has a dominant position in one market, it is not allowed to offer a discount on a bundle of that product with another product in a different market, because that means you are selling the other product at a loss.

          2. captain veg Silver badge

            Wrong

            The entire premise of "cloud computing" is that it doesn't matter who owns the processors or where they reside.

            I own a licence, and I can run that software wherever I like. Can't I?

            Well, can't I?

            -A.

      3. Tom 38

        Would you be OK with Ford charging a huge list price for parts, and then discounting the cost of servicing at Ford garages?

        1. sabroni Silver badge

          Would you say that was illegal?

          1. VicMortimer Silver badge

            If it isn't already, it definitely should be.

  2. abend0c4 Silver badge

    Extraordinary and unprecedented

    I think the practice of regulators wanting dominant vendors to unbundle their products goes back a long way - and in the case of computers to the 1969 antitrust case against IBM.

    And although that case was ultimately dismissed (after about 13 grinding years), it did result in the unbundling of software and arguably IBM was never the same force again. I can see why Microsoft might not want to acknowledge that precedent, but there it is none the less.

  3. John Hawkins

    They do have a point

    Much as I dislike Microsoft's business methods and software, isn't this an effect of companies and organisations locking themselves into the Microsoft ecosystem rather than anything Microsoft are to blame for? Companies might not have had a lot of choice of course if they using software that requires Microsoft somewhere in the stack, but ultimately it's their decision and they own the consequences.

    Not that I've ever seen 'Microsoft software' as a bullet point on any project risk assessment, but I expect I'm not the only one who regards Microsoft as a potential risk.

    1. John Robson Silver badge

      Re: They do have a point

      No - it's entirely MS decision to charge multiple times as much for the same software on different cloud platforms, to the sole benefit of their own cloud platform.

      If MS charged the same licensing on Azure as they charged on other cloud products there would be no case to answer, even if that price was extortionate - it would at least be a level playing field.

    2. Tom7

      Re: They do have a point

      "You want to move your workload from your server room to the cloud? Do it on our cloud and we'll give you a big discount on Windows licenses..."

      Seems pretty open and shut to me.

      1. LybsterRoy Silver badge

        Re: They do have a point

        I upvoted you but whilst I agree that its open & shut you forgot to say what its open & shut on

      2. DrkShadow

        Re: They do have a point

        Have you heard the one where Googoyle will give you 100k in cloud credit if you're a startup and build on their cloud?

        Get you and trap you.. after 100k spend, it's hard to migrate, and you're probably using infrastructure that isn't even available at any other provider.

        ---

        Kind of like what Axon did to cop-houses all over: "Hey, free body cams! Come and get 'em! We'll give you a free two-years of storage, too. Nyuk, nyuk." Now it's all I see cops wearing.

        ---

        Along similar lines, you're migrating from your server room, windows licenses in tow, to a cloud, and MS says "Hey, want to use the latest version of Windows? No extra charge!" Now you're stuck on Windows, just like Axon. Yuck.

        Oh, wait... right, your intent.

        You're taking what everyone does and labelling it illegal. It's bad, it's horrible, but it's not *illegal*. All the down-mods here are people who *don't like* what's happening, but the down-modded posts aren't incorrect - just explaining the facts of how and why these things are happening, and why they can't be (successfully) prosecuted for it. Keep in mind, I'm stating the facts, not that I agree with what these people are doing.

  4. Guy de Loimbard Silver badge
    Facepalm

    riding roughshod over Microsoft's intellectual property rights

    How exactly is IP being riding over roughshod?

    MS want to drive people to Azure so they can make even more money.

    It's not hard to see it for what it is.

    The challenge you now have is that the organisations are so large internationally, that they don't really care about any Anti Trust CMA type actions as they can just pay the "Fine" or spend years arguing it in courts.

    1. Anonymous Coward
      Anonymous Coward

      Re: riding roughshod over Microsoft's intellectual property rights

      Also a certain irony in that AWS literally invented cloud and Azure came later (with pretty much an exact copy but somehow IP was respected)

      1. Anonymous Coward
        Anonymous Coward

        Re: pretty much an exact copy

        This is why you can't rely on developers to develop front ends.

        Functionally you could say Azure is a copy of AWS but using Azure is a fuck sight easier than navigating your way around AWS. AWS was originally Amazon's infrastructure that they eventually started to license out. Azure was designed to be used by consumers.

        Much like git is a fucking shit show because it was designed wihtout any thought of the users, AWS is a confusing mess with loads of similar but different services, all with shit names.

        Maybe sort that out instead of bitching about licensing costs?

  5. Paul Crawford Silver badge
    Facepalm

    Seriously, in the current climate you would be nuts to put your IT in the hands of another nation.

  6. NewModelArmy

    Taking the Piss a Bit.

    Is this only an issue in the UK or Europe as opposed to in the US ?

    It is irony or hypocrisy that Amazon and Google are complaining about Microsofts practices, when Amazon and Google (and the US administration) are baulking at the UK taxing of their services in the UK.

    Fuck the lot of them. They are all bastards.

  7. Doctor Syntax Silver badge

    "This is an extraordinary and unprecedented intervention"

    Maybe it's a response to an extraordinary and unprecedented situation.

  8. PCScreenOnly

    Buy / License the OS

    It should be one cost (OK, there is the core vs CPU), but once I have that, it should not matter where it is run and that should not impact the cost.

    What next.

    W11 running on

    CoPilot PC = 50% discount

    Dell = 1.5x

    Lenovo / HP = 2x

    Other = 4 x

    1. LybsterRoy Silver badge

      Re: Buy / License the OS

      OK, maybe as well all discounts for anything should be removed eg the "free" postage if you spend more than £x with us

    2. Chz

      Re: Buy / License the OS

      You're going to hear from Oracle's patent lawyers any moment now....

    3. ITMA Silver badge
      Devil

      Re: Buy / License the OS

      Don't give the buggers at Microsoft ideas! FFS!

  9. Anonymous Coward
    Anonymous Coward

    hard to choose any of the bastards to cheer

    best case is they all fuck each other over

    1. Felonmarmer Silver badge

      Heads they win, tails we lose.

      Problem is which ever one of the bastards loses, the people paying for it will be the customers - both the loser's customers and then the winner's customers when they take advantage to raise the prices.

  10. martinusher Silver badge

    Regulating Utilities

    Back in the Good Old Days the idea that unregulated monopolies should have a stranglehold on the essentials of life was seen as contrary to the interests of society so the idea grew of a regulated monopoly that was given a guaranteed RoI in exchange for managed -- predictable -- pricing. This idea was deemed old-fashioned and inefficient by corporate PR departments who, using the notion of competition and the usual Econ 101 arguments, sold the notion of deregulation, substituting toothless authorities (easily purchasable as well) for regulation and giving them free rein to screw the public for anything they could get out of them.

    Communication -- phones -- were a type of utility but data was never regulated and is now showing the result of consolidation and monopoly. Sure, there's a semblance of competition but its an illusion. This is especially annoying for me since readily available PCs and the early Internet held the promise of true competition.

    1. Benegesserict Cumbersomberbatch Silver badge

      Re: Regulating Utilities

      Unless you have a government that invests in a publically owned not-for-profit data infrastructure. Private companies are welcome to use it as a delivery platform, or build and run their own infrastructure in parallel.

    2. LybsterRoy Silver badge

      Re: Regulating Utilities

      Go back a bit further and the governments sold monopolies or managed them eg salt

  11. LybsterRoy Silver badge

    As a bit of a swerve we keep getting told in these comment sections that there are Linux FOSS alternatives to Windows software so surely the competitive aspect would be to persuade Gogle & Amazon cloud users switch to Linux - problem solved <G>

    Or they can just keep on paying.

  12. kmorwath

    Bezos is getting what he's asking for...

    Isn't he who is forcing the Washington Post to publish only opinions about "personal freedom" and "free markets"? Well, in a "fully free, unregulated market" - the way Bezos & C mean - Microsoft is free to charge them as much as they like for its products. Of course Bezos is free to develop his own OS and charge as much as it likes for it.

    Or course in a market where anti-trust worked and Lina Khan was still the head of FTC that would not happen - but Amazon and AWS would not be happy either, I guess...

  13. Henry Wertz 1 Gold badge

    Monopolist

    I am amused how Microsoft, a convicted monopolist, provides a word-for-word description of monopolistic, anti-competitive behavior (using their monopoly in Windows and associated server software to undercut on price in order to expand into other markets) as their defense.

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