The relationships between technology companies are often intriguing. These firms can be both competitors and collaborators at the same time. For example, they might work together on a project while also suing each other for millions of dollars or accusing each other of wrongdoing. Most recently, Google accused Microsoft of anti-competitive practices in the cloud computing market. Google sent a letter to the authorities alleging that Microsoft is using its dominant position to push customers towards its own cloud services. Here are the details…

Google Accuses Microsoft of Monopolistic Practices in Cloud Computing

In a letter to the US Federal Trade Commission, Google alleges that Microsoft is using its dominant position in the enterprise software market to push customers towards its Azure cloud computing platform. Specifically, Google takes issue with the integration of Windows Server and Office products into Azure. It argues that this integration makes it almost impossible for customers to switch to other cloud computing platforms, thereby creating an ecosystem of dependency.

Google also points to Microsoft’s practice of charging additional fees to third-party cloud providers for running its software. This policy, enacted by Microsoft in 2019, has resulted in what Google deems an anti-competitive environment in the cloud services sector. Google’s accusations are in line with the concerns of other industry observers. Corey Quinn, a renowned cloud economist, has noted a worrisome trend in the industry towards making it more difficult for customers to switch cloud providers. He has described this trend as “anti-competitive” and “increasingly Herculean.”

Microsoft made the following statement on the subject: We have made changes to our cloud licensing terms to address licensing concerns and provide more opportunity for cloud providers. Worldwide, more than 100 cloud providers have already taken advantage of these changes. And as the latest independent data shows, competition between cloud hyperscalers remains healthy. In the last quarter of 2022 Microsoft and Google made small gains on AWS, which continues to remain the market leader by a significant margin.

The FTC is currently investigating Google’s allegations against Microsoft. The outcome of this investigation could have a significant impact on the future of cloud competition. If the FTC finds that Microsoft is engaging in anti-competitive practices, it could order the company to change its behavior. This could open up the cloud computing market to more competition and give customers more choice.

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Oracle, the American commercial software giant, released its financial report for the fourth quarter of the 2023 fiscal year, showcasing robust growth. The company’s stock price soared to a record high at the close of trading and continued to rise by 3.5% in after-hours trading. In the midst of an ongoing tech recession in a lot of parts of the world, this is a major achievement.

Oracle’s Cloud Computing business had the biggest growth numbers

According to the financial report, Oracle’s total revenue for the quarter reached $13.8 billion, marking a 17% year-on-year increase. This surpassed analysts’ average forecast of $13.7 billion, demonstrating Oracle’s ability to surpass expectations. The net income, excluding special income, stood at $1.67 per share, outperforming analysts’ projection of $1.58 per share. Oracle’s cloud computing business specifically experienced impressive growth, with fourth-quarter revenue reaching $4.4 billion, a 54% increase compared to the previous year. The cloud infrastructure segment contributed $1.4 billion in revenue, growing by 17%, while cloud software sales rose by 45% to $3 billion.

Oracle CEO Safra Catz expressed confidence in the company’s future, stating that they anticipate that the company will surpass the current growth rate of the previous fiscal year in the upcoming year. Oracle has strategically expanded its cloud computing infrastructure to compete with industry leaders like Amazon and Microsoft. While the growth rates of these companies have slowed down, Oracle’s cloud computing business has thrived. The increasing demand for generative artificial intelligence in the market has significantly boosted Oracle’s cloud computing business. As evidence, generative AI startup Cohere recently secured $270 million in funding, with Oracle being one of the investors.

Following the release of the financial report, Barclays Bank analyst Raimo Lenschow predicted that Oracle’s stock price would continue to rise. The stock closed at a record high of $116.43 per share, representing a 42% increase since the beginning of the year.

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Honor, the company which separated from Huawei last year into an independent brand, has today announced the expansion of its strategic partnership with Microsoft. Both the companies will now work together to develop ground-breaking AI and end devices and create forward-looking technology strategies.

The Chinese company says that the goal is to ultimately support Honor’s “1+8+N” strategy worldwide. Apart from this, the Chinese brand has announced Honor MagicBook V 14 as one of the world’s first laptops to come pre-installed with Windows 11 operating system.

Honor had introduced its “1+8+N” all-scenario strategy to develop products by focusing on AI and smartphones as the core of the platform, while developing other connected products such as notebooks, smart screens, tablets, wearables, TW Stereo headphones, and routers.

The company will integrate Microsoft’s cloud computing and AI technology into its product and services such as its YOYO intelligent assistant, collaboration tools, AI travel assistant, utilities, and translation services.

Microsoft was among the first group of suppliers that cooperated with Honor after the company became fully independent. Honor has been using Windows 10 as its official global operating system for its computers.

The Honor MagicBook V 14 will be officially launched at the Honor Smart Life Product Launch event scheduled on 26th September. The company has also said that it is capable of maximizing the potential of Windows 11 with its advanced capabilities in software and hardware integration.

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As Huawei Technologies struggles under the impacts of the US sanctions, the company’s founder Ren Zhengfei said that the smartphone maker is now looking towards cloud services as its primary focus, over its smartphone and 5G operations.

According to an SCMP report, the senior executive of the Chinese tech giant had made the announcement in an internal speech back in November 2020. The founder had said that the company must build up its strength in cloud services and that the brand needed to also make a “breakthrough” in the field. The official added that “It is impossible for us to simply follow the same path as Alibaba and Amazon … They have access to unlimited money in the US stock market.”

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“Our enterprise business needs to scale back its battlefront … If our strategy is too broad, we will lose our combat strength.” Companies like Amazon are tech conglomerates with businesses spanning e-commerce, video streaming, and even cloud computing among various other businesses as well. Unlike these firms, Huawei has mostly focused on its telecom equipment services and its popular smartphone business.

As per Ren, the company should learn from companies like Amazon and Microsoft, both of which are major names in the global cloud services field. These brands focus on infrastructure as a service (IaaS) and platform as a service (PaaS). For those unaware, customers of these companies pay a fee to utilize their computing resources such as networking and data storage. At the moment, Huawei is already a leading cloud service provider in China, alongside Alibaba and Tencent. Although, its presence in the global market is still scarce, despite there currently being a surge in demand for could services.

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The United States has put several restrictions and sanctions on the Chinese giant Huawei, effectively banning the company from doing business with any of the American companies or the companies using American technologies.

While Huawei has been severely impacted because of these sanctions, American companies are also worried about potential losses. However, it seems that the deeds of the U.S. will benefit another emerging global superpower.

As per the SCMP report, Huawei founder Ren Zhengfei has said that the company has increased its investment in Russia after the United States put Huawei on the Entity List last year. He added that along with increased Russian investment, it expanded the Russian scientist team, and increased the salary of Russian scientists.

The company has become the leading smartphone brand globally, dethroning Samsung. However, it will be impossible for the company to keep the lead position given the recent setbacks. The new restrictions have made it impossible for Huawei to manufacturer its own Kirin chipsets and procure chipsets from the likes of Qualcomm.

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However, US-based chip suppliers, including Qualcomm, have been trying to get approval to resume sales to Huawei. On the other hand, Taiwanese chip designer MediaTek has applied for a license to continue doing business with Huawei.

But, the company can still source U.S. chips for the cloud computing business, and thus, the company has now shifted its focus towards this. Huawei’s cloud computing sells computing power and storage solutions to companies, along with access to artificial intelligence.

As per the reports, Huawei is putting the cloud computing business in line with the smartphones and telecom equipment business. On top of that, it is said that the Chinese government will increasingly support the company through public cloud contracts.

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The United States recently tightened sanctions against Huawei and its subsidiaries, banning the company from getting its hands on chipsets for smartphones or any of the other hardware products from the company.

However, a new report from FT claims that despite the sanctions, the Chinese giant still has access to U.S. chipsets for the cloud business, and thus, the company will now be shifting its focus towards that.

For those who are unaware, Huawei has a cloud computing business that sells computing power and storage solutions to companies. It also gives access to artificial intelligence and the report adds that this division is growing rapidly.

Huawei is putting the cloud computing business in line with the smartphones and telecom equipment business. On top of that, it is said that the Chinese government will increasingly support the company through public cloud contracts.

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A few months ago, the Trump administration tightened restrictions on Huawei and its subsidiaries, banning the company from procuring chipsets that are made in the U.S. or use American technologies. With this, TSMC, the contract manufacturer for Huawei, stopped taking new orders and will completely stop the business from 15th September.

The Chinese giant is all set to launch its Mate40 flagship smartphone series in the coming days and along with it, the company will also launch the Kirin 9000 SoC, which is said to be the last flagship chipset from the brand.

However, it is being reported that Huawei is planning on manufacturing its own chipsets. It is said that the Chinese tech giant will be announcing its plan on creating its own semiconductor chips without requiring any US equipment or components.

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