Microsoft is questioning the motives behind the new Open Cloud Coalition (OCC), which they label as an “astroturf group” allegedly created by Google. This coalition launched on October 29, claiming to promote transparency and competition in the public cloud space for enterprise IT customers.
The OCC has ten founding members that include various cloud service providers, both global and regional. They aim to work alongside competition authorities in the UK and Europe to assist with cloud market investigations focused on anti-competitive behavior. Nicky Stewart, the coalition’s senior adviser, shared that the OCC has been in development for years. Before this, Stewart was the commercial director at UKCloud, a provider that eventually went into liquidation last October after enjoying a decade of success with public sector contracts.
UKCloud was celebrated as a key player in the UK tech scene, particularly after the SME-friendly G-Cloud procurement framework spurred its growth, peaking at £8.1 million in public sector cloud spending in early 2016. However, by 2018, user engagement and profits began to decline, attributed to increased competition from heavyweights like AWS and Microsoft, both of which established UK datacentres in late 2016. This change prompted UKCloud’s leadership to express concerns about the impact of these larger providers on the local cloud ecosystem.
Stewart noted that conversations leading to the OCC emerged during this period of struggle, highlighting a keen need for a collective voice for smaller players. As market pressures shifted, she found renewed motivation to engage with various companies feeling sidelined by the dominance of larger hyperscalers.
The OCC’s launch aligns with increased scrutiny faced by AWS and Microsoft from regulators in the UK and Europe. Authorities are investigating complaints about pricing practices and the difficulty of switching cloud services, especially regarding Microsoft’s licensing strategies, which reportedly impose higher costs for running their software on competitors’ clouds. The UK’s Competition and Markets Authority (CMA) is looking into these dynamics after evidence surfaced suggesting anti-competitive behavior.
Stewart emphasized that many companies are now feeling emboldened to step forward, hence the formation of the coalition. “It’s time to throw another voice in the pot,” she stated.
However, Microsoft claims the OCC has a hidden agenda. Rima Alaily, the corporate vice-president at Microsoft, asserted that the coalition’s real purpose is to mislead the public and undermine Microsoft in front of regulators. Alaily accused Google of manipulating this initiative to mask its involvement while recruiting European providers to serve as front members.
In response to these accusations, Stewart insisted that the OCC operates with a governance model emphasizing equality among its members, ensuring all voices contribute to shaping the cloud landscape in Europe.
Microsoft’s perspective paints Google as deflecting attention from its own regulatory challenges while trying to gain an advantage over competitors. The company claims that Google is focusing on discrediting them instead of addressing its own licensing issues. Google, on the other hand, has been vocal about its concerns regarding Microsoft’s cloud strategies, arguing that they create negative impacts on competition and innovation.
The tension between these tech giants is intensified by ongoing regulatory inquiries, including Google’s recent anti-trust complaint against Microsoft filed with the European Commission. The environment around cloud service competition is contentious, with various stakeholders, including trade bodies, also raising their concerns about Microsoft’s practices.