Competition in the IaaS (infrastructure as a service) and PaaS (platform as a service) markets is getting fiercer all the time, but now Microsoft has come up with an additional differentiator besides cost and performance to lure customers to its Azure service: Protection from patent troll lawsuits.
Microsoft president and chief counsel Brad Smith described the intent and benefits of the new Azure IP Advantage program in a blog post:
We want software developers to be able to focus on coding, and businesses and enterprises to be able to respond to the changing needs of their customers with agility without worrying about lawsuits.
It’s a goal that we believe deserves more attention than it has received to date. On the one hand, the cloud-based economic opportunity is enormous.
But at the same time, it’s important to address the growing risk of intellectual property lawsuits in the cloud. According to Boston Consulting Group, there has been a 22 percent rise in cloud-based IP lawsuits over the last five years in the United States. And non-practicing entities (NPEs) have increased their acquisition of cloud-related patents by 35 percent over the same period.
Azure IP Advantage will go beyond Microsoft's existing indemnification coverage, adding coverage for "any open source technology that powers Microsoft Azure services, such as Hadoop," Smith wrote.
Microsoft will also give Azure customers access to 10,000 of its patents for assistance in battling patent suits that involve services they're running on Azure. Moreover, if Microsoft ever sells patents to "non-practicing entities"—the polite name for patent trolls—customers will be protected against any future litigation through a "springing license."
To gain access to Microsoft patents, customers must have at least $1,000 in Azure spend per month over the past three months; have not filed a patent suit against other Azure customers during the past two years; and provide evidence of relevant litigation occurring beyond Feb. 8. Springing license protection requires Azure spend of at least $1,000 per month over the past three months.
Microsoft has provided a detailed FAQ that goes into the finer details of the program, which is available globally except in China.
The Bottom Line
Microsoft insists the patents it's making available are of significant value and not just a pile of intellectual detritus thrown together for show. Constellation will take Microsoft's position at face value for now.
Redmond says Azure IP Advantage's benefits go further than any competitor, a claim that is predictable and subject to testing. But the gauntlet has been thrown down, and will likely demand responses from the likes of Amazon Web Services and IBM, both of which have ample patent portfolios of their own. Better IP protection across multiple clouds is good for customers.
In addition, the price point required for eligibility in the program is remarkably modest, making it addressable to the vast majority of Azure customers. Microsoft's competitors will have to respond in kind.
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