Microsoft getting nervous about Europe’s tech independence • The Register

Microsoft is responding to mounting “geopolitical and trade volatility” between the US administration and governments in Europe by pledging privacy safeguards for customers worried about using American hyperscalers, and vowing to fight the US government in court to protect Euro customers’ data if needed.

Under Trump 2.0, some Europeans fear that storing their data in the bit barns of Microsoft, Google and AWS is no longer safe, a concern voiced to The Register in late February by Bert Hubert, a part time technical advisor to the Dutch Electoral Council.

Dutch Parliamentarians have since passed eight motions that urge the government to abandon US-made technology for local alternatives. European techies and lobbyists are pressing the European Commission President Ursula von der Leyen and Executive Vice-President for Tech Sovereignty Henna Virkkunen, to create a sovereign infrastructure.

Microsoft President Brad Smith acknowledges this, and the importance of the region for his employer in a blog post today, saying “our economic reliance on Europe has always run deep.

“We recognize that our business is critically dependent on sustaining the trust of customers, countries, and governments across Europe. We respect European values, comply with European laws, and actively defend Europe’s cybersecurity. Our support for Europe has always been – and always will be – steadfast.

“In a time of geopolitical volatility, we are committed to providing digital stability. That is why today Microsoft is announcing five digital commitments to Europe. These start with an expansion of our cloud and AI infrastructure in Europe, aimed at enabling every country to fully use these technologies to strengthen their economic competitiveness. And they include a promise to uphold Europe’s digital resilience regardless of geopolitical and trade volatility.”

Microsoft was “pleased,” he says, that the Trump administration and the European Union bloc had agreed to “suspend further tariff escalation” as officials “negotiate a reciprocal trade agreement” to “resolve tariff issues and reduce non-tariff barriers.”

The direction of travel by the US government has created nervousness among some European customers. Trump appears to treat his allies like his historic enemies and relationships are unravelling. Microsoft generates around a quarter of its revenues in Europe and so has a vested financial interest in overcoming any unease from customers in the region.

With this in mind, Microsoft has a five-point plan to ameliorate growing alarm starting with confirmation today to “increase our European datacenter capacity by 40 percent over the next two years,” Smith says in his post.

“We are expanding datacenter operations in 16 European countries. When combined with our recent construction, the plans we’re announcing today will more than double our European datacenter capacity between 2023 and 2027. It will result in cloud operations in more than 200 datacenters across the continent.”

“This includes,” in its public cloud bit barns, “the Microsoft Cloud for Sovereignty, a package of technologies and configurations to help governments and other customers run on Azure in our public cloud datacenters with greater control over data location, encryption, and administrative access.”

This multi-year initiative was completed in March.

Techies in Europe – who obviously have a vested interest in unsettling Microsoft stronghold on the market as AWS, Microsoft, and Google have upwards of a 70 percent share of the public cloud sector in the region – previously highlighted the potential dangers of US legislation.

Frank Karlitschek, CEO of Nextcloud, told us in March, “The Cloud Act grants US authorities access to cloud data hosted by US companies. It does not matter if that data is located in the US, Europe, or anywhere else.”

Not everyone shares those concerns, although some do, and this is sparking conversations about business risk.

Mark Boost, CEO at UK cloud provider Civo, told us today: “In the last few weeks, cloud users’ interest in data sovereignty has surged. Almost overnight, it has shifted from nice-to-have to a strategic necessity.”

He claimed the tariff debacle had forced many businesses to “reconsider their relationships with large US cloud providers. Organisations across the board, especially in regulated industries, are more aware than ever about how their data is used, transferred, and stored. Regaining control over that process is vital to remaining compliant and secure in a global tech economy that’s constantly shifting.”

“While the CLOUD Act remains in force, enterprises and governments simply cannot trust US hyperscalers to keep their data fully private, regardless of the physical location of their infrastructure.”

Doubling down, Smith at Microsoft says: “Microsoft is committed to helping Europe navigate the uncertain geopolitical and trade environment and better manage risk by strengthening the continent’s digital resilience.

“We also are listening closely to the views of European governments and leaders. We recognize that European countries, like nations everywhere, need to have rock-solid confidence in the digital infrastructure on which they rely.”

With this in mind, he says Microsoft’s European datacenter ops will be “overseen by a European board of directors that consists exclusively of European nationals and operates under European law.”

He adds:

Smith says Microsoft is no stranger to pursuing litigation to “protect the rights of our customers and other stakeholders” and points to four lawsuits filed against the US Executive Branch when President Obama was in office and a Supreme Court ruling during Trump’s first run as President to uphold the rights of staff that are immigrants.

“When necessary, we’re prepared to go to court,” he says. “We are confident of our legal rights to ensure continuous operation of our datacenters in Europe. And we are prepared to back this confidence with our contractual commitments to European governments.”

To reinforce this claim, Smith says Microsoft will also “designate and rely” upon European partners “with contingency arrangements for operational continuity in the unlikely event Microsoft were ever required by a court to suspend services. We are already enabling our partners in France and Germany to do this for the Bleu and Delos datacenters, and we will pursue arrangements for our public cloud datacenters in Europe.

“We will store backup copies of our code in a secure repository in Switzerland, and we will provide our European partners with the legal rights needed to access and use this code if needed for this purpose.”

Smith is also talking up efforts to protect the privacy of European data as Microsoft, he says, lets customers choose where their data is stored and processed, how it is encrypted and secured and when Microsoft can access it.

With regard to cybersecurity, Smith says it will appoint a Deputy CISO for Europe in Microsoft Cybersecurity Governance Council, build on the Secure Future initiative and dedicate more resource to comply with the Cyber Resilience Act.

“Security is the foundation of trust. To sustain that trust, we will engage an independent auditor to verify and validate our commitments to Europe.”

The final part of Microsoft’s five-point plan may make some readers spill their coffee, assuming they are reading this with their morning brew in US East Coast or at lunchtime in Europe. Microsoft is going to “strengthen Europe’s economic competitiveness, including for open source.”

Smith didn’t launch much new here, saying Microsoft will “introduce new enhancements” to AI Access Principles.” The principles have, he claims, ensured the Azure AI platform is open to a variety of business models — both open source and proprietary.” Microsoft hosts 1,800 AI models. And he recounts how Microsoft last year eliminated egress fees, albeit under pressure from UK watchdog the Competition and Markets Authority. Some onlookers, however, feel this was more of a marketing move than actual substance, as egress fees only matter to a small portion of customers.

Corey Quinn, chief cloud economist at The Duckbill Group, said in March last year when Microsoft ditched egress fees: “It’s marketing [that] makes new customers feel better. Wildly expensive egress mostly hurts ongoing usage; nobody stays locked in because of egress.”

Microsoft this month celebrated its 50th anniversary, and the tenor of today’s blog encapsulates the existential threat that Smith’s employer faces in Europe. The longer Trump’s unpredictable policies unsettle customers on the European side of the pond, the more action will be needed.

When profits are under threat, shareholders start to get twitchy. ®

Keep your files stored safely and securely with the SanDisk 2TB Extreme Portable SSD. With over 69,505 ratings and an impressive 4.6 out of 5 stars, this product has been purchased over 8K+ times in the past month. At only $129.99, this Amazon’s Choice product is a must-have for secure file storage.

Help keep private content private with the included password protection featuring 256-bit AES hardware encryption. Order now for just $129.99 on Amazon!

Help Power Techcratic’s Future – Scan To Support

If Techcratic’s content and insights have helped you, consider giving back by supporting the platform with crypto. Every contribution makes a difference, whether it’s for high-quality content, server maintenance, or future updates. Techcratic is constantly evolving, and your support helps drive that progress.

As a solo operator who wears all the hats, creating content, managing the tech, and running the site, your support allows me to stay focused on delivering valuable resources. Your support keeps everything running smoothly and enables me to continue creating the content you love. I’m deeply grateful for your support, it truly means the world to me! Thank you!