Microsoft (NASDAQ:MSFT) has been hit with a complaint from a Spanish startup group regarding its cloud practices, according to a Reuters exclusive report. This follows a similar complaint in the European Union (EU) by a trade group. Microsoft ranks second in cloud computing behind Amazon but is rapidly gaining ground with innovative AI features from OpenAI.
Details of the Complaint
The Spanish Startup Association, representing over 700 startups, has accused Microsoft of anti-competitive behavior. They claim that the tech giant leveraged its dominance in the operating system (OS) and productivity software market to promote its Azure cloud services, thus creating barriers that hinder fair competition.
Furthermore, the association has alleged that Microsoft’s practices restrict data portability and competition for software licenses. As a result, they have urged the Spanish competition watchdog to investigate the complaint and implement measures to ensure a competitive market.
Microsoft’s Cloud Services – A Key Component of its Revenues
Microsoft’s cloud services are increasingly becoming an important component of its revenues. In the Fiscal third quarter, the company’s sales increased by 17% year-over-year to $61.9 billion, beating analysts’ expectations of $60.8 billion.
Microsoft’s Intelligent Cloud division, including Azure, made up $26.7 billion of its revenues, which is more than 40% of its total revenues in the Fiscal third quarter. Moreover, MSFT’s Azure sales grew by 31% year-over-year in the third quarter.
Is Microsoft a Buy or Sell Stock?
Analysts remain bullish about MSFT stock, with a Strong Buy consensus rating based on 31 Buys and one Hold and Sell each. Over the past year, MSFT has increased by more than 30%, and the average MSFT price target of $489.56 implies an upside potential of 18.4% from current levels.
