The rivalry between Microsoft and Google is heating up again, with Microsoft accusing Google of orchestrating “shadow campaigns” aimed at undermining its cloud business. Just hours before Google was set to announce a new Open Cloud Coalition, Microsoft’s deputy general counsel, Rima Alaily, published a sharp blog post, claiming that Google is using this coalition to “discredit Microsoft with competition authorities and policymakers” while masking its involvement by enlisting European cloud providers as the public face.
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This coalition emerged after Google failed to prevent a settlement between Microsoft and the Cloud Infrastructure Services Providers in Europe (CISPE). Earlier this year, CISPE withdrew a 2022 complaint about Microsoft’s Azure licensing practices after Microsoft agreed to let European cloud providers host its apps and services on local infrastructure. Microsoft asserts that Google tried to incentivize CISPE members with millions in cash and credits to reject the settlement, which Google views as promoting unfair business practices.
Google’s main concern is Microsoft’s alleged tactics that make it costlier for customers to run Windows Server on non-Microsoft clouds, effectively pushing them to Azure. Microsoft, however, contends that customers using Windows Server licenses on their own servers shouldn’t expect discounts if they transfer to a competitor’s cloud.
This latest clash underscores Google’s ambition to shape cloud regulations in its favor, especially as it faces more than 20 antitrust investigations in other sectors. Google’s cloud division remains a distant third behind Amazon and Microsoft, and regulatory wins could help it narrow this gap.
This is just one front in a long-standing feud between the tech giants. Tensions have been brewing since they ended a legal truce in 2021. That same year, Microsoft president Brad Smith criticized Google’s lack of transparency over the SolarWinds breach and voiced support for Australian laws requiring Google to pay publishers. In response, Google accused Microsoft of undermining open web principles to hinder a rival.
Their disputes go back even further, from Microsoft’s struggles to support Google apps on Windows Phone to browser wars in which Google deployed tactics against Microsoft’s Internet Explorer and original Edge browser.
While both companies briefly collaborated on Chromium-based browsers, the cloud battle won’t see similar cooperation. Microsoft’s cloud business is crucial to its AI ambitions and generated $24.1 billion in the last quarter. After investing over $13 billion in OpenAI, Microsoft CEO Satya Nadella aims to challenge Google’s dominance in search and cloud.
With AI-driven strategies shaping the future of cloud services, this rivalry is intensifying, and the competition between Microsoft and Google is only beginning to escalate.
