Cloud Infrastructure Services Providers in Europe (CISPE) has issued its third European Cloud Competition Observatory (ECCO) report, praising Microsoft’s licensing concessions while accusing Broadcom of worsening anti-competitive practices.

The European cloud vendor forum has 38 members, according to its website. Amazon Web Services used to be on its board, but the cloud giant exited after the trade association changed the rules for admission to block non-European cloud vendors with annual revenues exceeding €10 billion.

This is the third ECCO report on Broadcom. The first was published in February 2025, and the second came in May 2025, when the majority of CISPE members had entered into new licensing agreements. At the time, it was noted [PDF] that “these agreements were often signed under significant pressure, influenced by a lack of alternatives, abrupt contract terminations, and financial incentives such as rebates for longer-term commitments.”

The situation has not improved since May. On July 24, CISPE filed an action challenging the European Commission’s decision on July 12, 2023, to approve Broadcom’s acquisition of VMware.

The latest report criticises the “unilateral market distorting program changes” and “significant new forms of unfair licensing behaviour being imposed by Broadcom on European cloud providers and their customers.”

Broadcom’s acquisition of VMware and the subsequent price hikes haven’t gone down well with all customers, to the point that many have been considering alternatives. Thierry Carrez, general manager of the foundation behind one such alternative, OpenStack said: “Broadcom’s handling of VMware is a good example of the risk of trusting your infrastructure software fate to a single vendor. Those companies can be bought, can change direction, can change licensing terms anytime they want.”

“Broadcom continues to tighten the screws on Europe’s cloud infrastructure sector,” said CISPE. “A lack of action from EU competition authorities to check the worsening anti-competitive behaviours of Broadcom has led CISPE to challenge the European Commission’s initial approval of the acquisition of VMware by Broadcom.”

The org also fired a warning shot at SAP and Citrix over lock-in and abuse of dominance. The latter, CISPE noted, “is potentially following a similar route to Broadcom in unilateral and dramatic changes to licensing terms.”

Still, Microsoft got a pat on the back, even though, a few short months ago, it earned CISPE’s ire for failing to deliver a special version of Azure for EU cloud providers, a condition set by the group for dropping an antitrust complaint. In July, CISPE wrung a concession from Microsoft on lower licensing fees, but a complaint about the technical tie-in between Entra ID and Microsoft 365 remains. As such, the report notes “there is still work to do.”

“Similarly, other hyperscalers were not covered under the agreement with Microsoft.”

“It doesn’t come as a huge surprise after Microsoft joined CISPE earlier this year,” Frank Karlitschek, CEO and founder, Nextcloud, said of Redmond’s positive portrayal. “We need industry associations that pursue benefits for the wider market and ensure a level playing field.”

Nicky Stewart, senior advisor to the Open Cloud Coalition said: “Unfair software licensing practices continue to distort Europe’s cloud ecosystem – restricting customer choice, locking in users, and protecting entrenched monopolies at the expense of innovation.

“The ECCO process is no replacement for formal antitrust enforcement. Without real authority, it cannot deliver accountability. Europe’s cloud market urgently needs decisive regulatory action to restore fair competition.”

The ECCO group was set up in 2024 to monitor cloud licensing. It came about following a deal with Microsoft to avoid a formal European Commission probe over alleged anti-competitive behaviour regarding the cost of running Microsoft’s software outside its datacenters.

The Cloud Infrastructure Service Providers in Europe (CISPE) on Thursday filed an action for annulment in a bid to overturn the decision by the European Commission approving Broadcom’s acquisition of VMware.

CISPE spokesperson Ben Maynard said that the appeal, which is now before the European General Court, “argues that the Commission did not properly test the licensing remedies offered by Broadcom and under-estimated the risk the deal poses to European cloud infrastructure providers and their customers. CISPE believes the clearance would entrench VMware’s licensing gatekeeper position and limit choice and innovation in Europe’s cloud market.”

CISPE stated in a release announcing the appeal that since the acquisition was finalised by the Commission in July 2023, “Broadcom has unilaterally terminated existing contracts, often with only weeks’ notice, and imposed onerous new licensing conditions. These include drastic cost increases (sometimes exceeding tenfold) and mandatory multi-year commitments for access to essential VMware software.”

It went on to say that Broadcom has “further escalated the situation by announcing new restrictive licensing terms that may exclude smaller cloud providers, including many CISPE members. These providers could now be barred from purchasing and reselling VMware-based cloud services — critical tools for delivering secure, flexible, and European cloud solutions.”

Maynard said that appeals of this kind typically take 18–24 months, and complex cases can stretch closer to three years. During that time, the Commission’s original decision remains in force, but, he said, “it would be annulled if CISPE prevails.”

A consortium of European cloud organisations has drawn a line under its long-running dispute with Microsoft after striking a deal it says delivers “landmark licensing reform” for its members.

Cloud Infrastructure Providers in Europe (CISPE) said the deal means European cloud providers will be able to offer Microsoft on a pay as you go basis that is comparable to Azure, and offer “bring your own license” support.

It frees up the organisation to fight other battles, including tackling the mayhem Broadcom’s licensing changes on VMware have wreaked through the industry.

CISPE first filed a complaint with the European Commission over Microsoft’s licensing practices back in 2022. Last year, CISPE and Microsoft reached a Memorandum of Understanding to address the complaint.

That deal included an agreement to release “an enhanced version of Azure Stack HCI” for European Cloud providers, and the creation of an independent European Cloud Observatory to monitor progress. CISPE agree to withdraw its complaint.

But things took a rocky turn back in February, with CISPE accusing Microsoft of simply pushing an existing Azure product at its members. Microsoft in turn claimed CISPE had misunderstood the Memorandum of Understanding and demanding out of scope additions.

However, understanding appears to have broken out again, with this week’s agreement.

CISPE said its members will gain access to “Pay-As-You-Go licensing models including Windows Server and SQL Server at competitive pricing that is comparable to Azure.”

CISPE members will be able to host pay as you go workloads, without sharing customer details with Microsoft.

It also flagged that its members will be able to access Microsoft 365 Local, announced last month, “if made generally available in Microsoft’s Cloud Solution Program (CSP).

Microsoft did not concede on every CISPE demand. It will not offer Windows 10/11 VDI multi-session on European owned multi-tenant infrastructure. And it will not remove technical tying between Entra ID/Azure Active Directory and Microsoft 365.

CISPE director of communications Ben Maynard told us it had “negotiated hard with Microsoft…you can’t get everything.”

But he said PAYG and BYOL were major wins for the organisation, it had achieved the vast majority of its goals, and it was prepared to draw a line under the dispute.

Now that Microsoft is out of the way, CISPE can turn to its members other problems, he said. And the biggest of these is Broadcom. “I suspect we’ll continue to look in detail at Broadcom,” Maynard said.

Broadcom’s takeover of VMware and subsequent licensing changes have sent shockwaves through suppliers and customers alike.

Maynard confirmed that it would consider a complaint to the European Commission about Broadcom’s changes.

Lars Johnson, General Manager of Business Planning at Microsoft, said in a statement, “By working closely with CISPE and our European partner community, we strive to innovate our products, business models, and strengthen our opportunities together.”

The CISPE/Microsoft detente was not universally welcomed.

Mark Boost, CEO at UK-based cloud firm CIVO said it appeared the concessions appeared to only apply to CISPE members, “with no clarity on whether other cloud providers across Europe will benefit.”

He added, “From Microsoft to Broadcom, we’re seeing a pattern of behaviour where licensing practices consistently undermine competition and restrict market access.”

In the absence of EU action, Boost said, “The UK’s CMA investigation next month has a vital opportunity to set a new precedent, one where competition isn’t optional and cloud users aren’t trapped by the very infrastructure they depend on.”

The North America-based Coalition for Fair Software Licensing, said Microsoft’s stalling had bought it more time to lock in customers.

“This is more smoke and mirrors from Microsoft: offer weak concessions in an attempt to avoid regulatory scrutiny and disingenuously pretend these actions promote European competition,” it said.

Microsoft has tabled a fresh set of commercial terms for an association of cloud providers in Europe that earlier filed a complaint with antitrust authorities in the trading bloc over allegations of anti-competitive licensing practices.

The Cloud Infrastructure Service Providers of Europe, aka CISPE, is a trade body that acts on behalf of 30 plus independent traders in the region, and which also counts AWS – and latterly Microsoft – among its membership. It first documented its frustration with the Windows-maker’s market moves in November 2022.

Its complaint centred on Microsoft allegedly charging service providers more to run its software – including Windows Server, Exchange, and SharePoint – on clouds outside of Azure, although other issues were also raised over the terms Microsoft offers.

A threat of legal action was quelled a year ago this week on the understanding that Microsoft would build and promote a new version of Azure Local, formally known as Azure Stack HCI, for European hosters. It was to include features previously only available to Azure customers. This was to include multi-session virtual desktop infrastructure based on Windows 11, free extended security updates and pay-as-you-go licensing for SQL Server.

Yet Microsoft failed to develop that in the allotted time-frame and so CISPE and Microsoft went back to the drawing board. Now the US corporation has returned with a fresh offer, CISPE has now confirmed.

“CISPE confirms that it has received a proposal from Microsoft within the deadline demanded by the memorandum of understanding signed in July 2024. It is reviewing Microsoft’s proposal and will communicate its decision in the coming weeks,” the trade group told us.

This agreement will be financial, not technically based. Sources say they they have heard that Microsoft will no longer require service providers to send their customer lists to Microsoft – a bone of contention for some – and providers will benefit from a reduction in Service Provider License Agreement fees. Microsoft had bumped up SPLA prices by ten percent in January, including for CISPE members, something the group complained about.

“CISPE members thought the original settlement with Microsoft exempted them from SPLA increases,” a source said. “Unclear how much of a reduction this is, or if CISPE members will face additional fee increases in the future.”

A contractual solution was originally sought by CISPE before the promise of a custom-built Azure Local solution was floated.

“If the contractual solution doesn’t offer the same functionality as Azure Local, bravo Microsoft for promising one thing so the lawsuit goes away but running out the clock and delivering something else. If it offers the same, then it confirms Microsoft’s restrictive licensing practices are contractual, not technical, and specifically discriminatory against Azure’s main competitors.”

Those main competitors are AWS and Google. AWS was previously on the board at CISPE but took a backseat after it was outvoted by other board members to let Microsoft join the group following their initial settlement agreement.

Google had tried to convince CISPE not to settle its complaint with Microsoft and to join the association, though that didn’t work out in Google’s favour. The Alphabet arm separately complained to the EU about the cost of running Microsoft software in its infrastructure. This harks back to changed Microsoft made in 2019, when it classified AWS, Google, and Alibaba Cloud as listed providers, meaning it was more expensive to run certain operating systems and applications on their infrastructure than Azure.

The UK’s Competition and Markets Authority, as well as the FCC in the US, are also paying close attention to the issue.

A Microsoft spokesperson said: “We are committed to ensuring a successful relationship with the European cloud community and a strong, durable and collaborative partnership with CISPE.”